Two trades to watch: WTI oil, S&P500

Oil retakes $80, inventory data in focus. S&P 500 tests 100 sma with banks earnings due.

Oil retakes $80, inventory data  in focus

After a brief pause in the run higher yesterday, oil prices are pushing northwards thanks to a bigger than expected draw in API US crude stockpiles.

The API institute saw crude stock piles rise by 5.2 million barrels but gasoline inventories fell by 4.6 million barrels. Expectations had been for crude stockpiles to rise 0.7 million barrels and gasoline stockpiles to drop by 0.1 million barrels. EIA data is due later.

Prices are also being supported by comments from the EIA that crude oil production in the US will decline in 2021 by more than expected.

The supply side of the market remains tight after OPEC decided to stick to its output plan agreed in July, hiking output by just 400k bpd. Yesterday OPEC trimmed its oil demand forecast for 2021, although they noted that surging natural gas could boost oil demand as end users switch.

Learn more about trading oil

Where next for WTI oil?

WTI trades back over $80 and remains firmly within the ascending channel. The RSI has toppled into overbought territory so there could be some consolidation or a move lower on the cards.

On the upside immediate resistance can be seen at 81.94 the recent seven year high touched earlier in the week.

On the downside watch for a move below 79.10 the weekly low to negate the near term uptrend.

Oil chart

S&P 500 tests 100 sma with banks earnings in focus

US indices closed mixed on Wednesday following higher than forecast CPI data and FOMC minutes which indicated that the Fed will announce the taper of bond purchases mid November to mid December.

Looking ahead earnings are due from the banks including Wells Fargo, Morgan Stanley, Citigroup and could drive sentiment.

Initial jobless claims will also be in focus with expectations of a decline to 319k, from 326k.

S&P 500 trading guide

Where next for the S&P 500?

The S&P 500 has been trending lower since early September hitting a nadir of 4270 at the start of the month. The S&P is extending its rebound from 4270, the 2.5 month low and is attempting to retake the 100 sma and falling trendline resistance at 4375.

A  move over this level exposes the 50 sma at 4440, above here buyers could gain traction to wards 4500 the round number and mid-September high.

Failure to retake the 100 sma & falling trendline could see the price target 4300 the September 17 low ahead of 4270 low.


S&P 500 chart



How to trade with

Follow these easy steps to start trading with today:

  1. Open a account, or log-in if you’re already a customer.
  2. Search for the market you want to trade in our award-winning platform.
  3. Choose your position and size, and your stop and limit levels.
  4. Place the trade.


Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account