Thursday, September 22, 2011
Commodities Collapse as Fed Operation Twist Sends Oil to 4 Week Low
So now we shift our focus to the Eurozone. Greece announced a new round of austerity measures. Pensions above 1200 euro will be cut by -20%, pensions paid to those younger than 55 will be trimmed by 40% for the amount exceeding 1000 euro and wages will be reduced for 30,000 state employees. While fiscal consolidation accelerates, protests also intensify. Public services will be suspended for 24 hours in Athens today. Flights to and from the Athens International Airport will also be disrupted as staff walk out for 3 hours proving that getting the Greek public to play along and play nice will prove near impossible.
If crude oil extends this week's decline, August's low crossing at 76.61 is the next downside target. Closes above the 20 day moving average crossing at 87.58 would confirm that a short term low has been posted.
First resistance is the 20 day moving average crossing at 87.58. Second resistance is last Tuesday's high crossing at 90.60. First support is the reaction low crossing at 79.76. Second support is August's low crossing at 76.61. Crude oil pivot point for Thursday morning trading is 86.19.