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The market traded sideways yesterday as analysts and investors struggled to find any direction. There were two factors holding the market steady yesterday, firstly bullish positive macroeconomic news and secondly bearish fundamental news.

On opening, the U.S. market was waiting for the only macroeconomic indicator of the day, the U.S. pending home sales data. May’s data showed a dramatic plunge in home sales after the contract deadline for special tax credits came to an end. However contrary to this, new home sales in June rebounded 23.6%, this was completely unexpected and provided buoyancy for the market and even some potential slight upside following gains in equities.

Despite this positive directional indicator, fundamentals kept a roof on any gains. Over 25% of daily crude production facilities in the U.S. Regulated Gulf Region remained closed yesterday, however over 50% of drilling operations have been bought back online after Tropical Storm Bonnie dispersed without causing any damage.

Overall WTI settled unchanged from close yesterday @ $78.98 per bbl.

This morning oil remained fairly steady upon opening, as the market soaked up the latest Reuters forecast for the impending stock reports. It is expected that WTI crude inventories fell 1.8 Million barrels, while supplies of refined fuels (Distillates & Gasoline) probably rose. While this indicates bullish sentiment for crude, again this is extremely bearish for refined fuels and goes against cyclical demand patterns as this time of year represents peak consumption.

Although this has had an impact on sentiment and is in the back of everyone’s minds for now crude appears to be tracking equities and currency movements. Stocks and U.S. Index Futures have rallied as earnings have improved from German car producer Daimler AG and UBS AG. The Stoxx Europe 600 Index has climbed 0.5% and futures on the S&P 500 index gained 0.4%. However BP has announced a second quarter net loss of $17.2 billion compared with a profit of $4.39 billion in the year earlier period, and has capped gains on equities markets.

According to Bloomberg bullish signals are increasing in the equities markets after the S&P 500 lost 13% in May and June, the biggest loss since March 2009. Forecasts for the fastest S&P 500 income growth since 1988 are helping overcome any negative sentiment currently still present. However according to technical analysis indicators the market is stuck in a narrow trading range as WTI is still above its short term and 34 day M/A’s @ $78.39 & $77.75 per bbl. For any increase we would need to see a close above $79.97/$80.00 per bbl, however a close below $78.39 and then $77.75 could be seen as quite negative.

Today’s key events due out later are the ICSC Goldman Store Sales, Redbook, S&P Case Schiller HPI, Consumer Confidence Index & State Street Investor Confidence Index.