NYMEX Crude Futures : (CL1K)
A new closing high has the bears dumbfounded, but there is still risk of a snap reversal, unless of course something new and bad occurs in the Middle East.
• Friday’s strong close above the US$ 106 resistance and indeed a new closing high for the year means NYMEX Crude for May delivery could just about hit our target given last week at 109-100. If it does so on with no fresh bad news flow, it’ll be a shorting candidate
• However betting against fresh chaos in the Middle East and North Africa has been like shorting the S&P. A losing trade.
• On a very short term basis use 107.60 as first support, then 106.75, which if taken out will likely see a swift correction to 105 or so.
• Volatility could be extreme if 105 fails quickly in the week, and will likely result in a pullback to 101 if not a tad below the ton.