Friday, October 30, 2009

Oil Falls the Most in a Month as U.S. Consumer Spending Drops


Crude oil fell the most in a month after U.S. consumer spending dropped for the first time since April, increasing skepticism that the economy will strengthen. Oil decreased as much as 3.8 percent and equities declined after the Commerce Department said purchases slipped 0.5 percent in September in the world’s biggest energy consuming country. Futures climbed the most in two weeks yesterday after a government report that the U.S. grew in the third quarter.

“People are still antsy that this will be a tepid recovery,” said Chip Hodge, who oversees a $9 billion natural- resource bond portfolio as senior managing director at MFC Global Investment Management in Boston. “Given where the economy is, $80 oil doesn’t make a hell of a lot of sense.” Crude oil for December delivery fell $2.83, or 3.5 percent, to $77.04 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Prices are down 4.3 percent this week, the first decline this month. Futures are set to gain 9.1 percent in October, the biggest monthly increase since a 30 percent rally in May.....Read the entire article.

5 ETFs That You Need to Look at Right Now


The five ETFs that we are referring to are going to play a major role in the future and you need to know about them today.

In this short video we show you the overriding trend and potential for each of these markets in the future.

Just click here to watch the video and as always our videos are free to watch and there is no need for registration.

Thursday, October 29, 2009

Crude Oil Climbs the Most in a Month After U.S. Economy Expands


Crude oil rose the most in a month after the U.S. economy grew in the third quarter for the first time in more than a year, spurring optimism that fuel demand will increase. Oil climbed as much as 3.9 percent after the Commerce Department said that the world’s largest energy consuming country expanded at a 3.5 percent annual pace from July through September. The economy was forecast to strengthen at a 3.2 percent annual pace, according to a Bloomberg News survey.

“This confirms that the recession has ended and now the only question is what the pace of the recovery will be,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis. “It would appear that this would lead to increased demand.” Crude oil for December delivery rose $2.71, or 3.5 percent, to $80.17 a barrel at 1:21 p.m. on the New York Mercantile Exchange. Futures are up 80 percent this year after climbing to a one year high of $82 a barrel on Oct. 21. Prices are heading for the biggest gain since Sept. 30.....Read the entire article.

Here's the Lessons You Get With Our 10 FREE Trading Lessons


The Crude Oil Trader and the great staff at INO .Com have teamed up to bring you a great email series of trading lessons that are invaluable no matter what your trading skills are. What are you waiting for, get your 10 FREE trading lessons!

Here are the lessons that users get in their inbox:

(1) The importance of psychology in price movement

(2) How to spot mega trends

(3) Understanding of technical price objectives

(4) How to picture price objectives

(5) How to trade with moving averages

(6) How to use point and figure trading techniques

(7) How to use the RSI indicator

(8) How to correctly use stochastics in your trading

(9) How to use the ADX indicator to capture trends

(10) How to capitalize on natural market cycles.

Plus, you will you will learn all about fibonacci retracements,
MACD, Bollinger Bands and much more.

Just Click Here to get your 10 FREE trading lessons and please feel free to leave us a comment and let us know what you think of the lessons.

Wednesday, October 28, 2009

Commodities & Stocks Ready to Bounce or Rally?

Commodities and stocks almost look ready for a rally or at least a relief bounce. The market is down over 5% and the normal pullback this year has been 4%. Using technical analysis and inter-market analysis we can see that the market is reaching extreme lows and this usually means we are only a couple days away from a rally.

I work with several market technicians as we all analyze the market a different way and share our work with each other to gain maximum insight on the broad market moves. We analyze momentum cycles, magnetic cycles, volatility levels, support & resistance levels, volume analysis and inter-market analysis.

Each of us has found a formula which works for our individual style of trading. And by combining our work we have found that we can collectively produce some very exciting trading signals for the broad market. We focus on leveraged index funds in order to take advantage of our insights. While nothing in trading is ever perfect, the analysis for timing the broad market is very exciting.

Here are some quick charts on where the market is trading.

US Dollar – Daily Dollar Price Chart
This chart is a no brainer. The trend is down and trading at resistance. If the US dollar reverses back down we will see stocks and commodities move higher.


VIX – Daily Volatility Index
Again, overall the trend is down and trading at resistance. As the saying goes “When the VIX is high its time to buy”. Just to be clear, the VIX is low compared to the previous highs set back in 2008 which was around the 80 level. But, if we want to keep things simple for the current trend then the VIX is high for our current market condition. The VIX moves in the opposite direction of the equities market.


DIA – Dow Jones Industrial Average ETF Fund
Here is the Dow Jones index fund and it clearly shows that when investors are selling out of their positions and getting scared of a market collapse, volume rockets higher. When we see the price pullback to possible support levels and volume increases that is a time when we should be looking to scale into a long position for a bounce, such as now.


XLE – Energy Sector ETF
You can see that the energy sector is very close to a support level and volume is high. With the US dollar about to reverse back down it will help boost this sector as it is tied in with commodity prices which rise with a falling dollar. I expect we will see a price gap lower and fill this area before moving higher.


GLD – Gold ETF Fund & Silver
This chart has not changed much from last weeks report. We are getting the drop as expected this week. We could see the gap fill from early October before gold stabilizes.

Silver is in the same situation. Gold and silver move in tandem so we are waiting for a bottom before looking for a low risk entry point.


Commodity & Stocks Trading Conclusion:
To keep things short and to the point, I am seeing momentum cycle lows as of today, magnetic wave lows today, and most commodities and indexes trading at support. These observations, coupled with the US dollar at a possible resistance level and market volatility spiking to an extreme high, lead me think a bounce is in the cards.

The market has had an amazing rally so far this year and I feel that we will have a solid year end rally going into Christmas. That being said, the recent sharp correction could form an ABC retrace pattern which means we get a bounce in the next week or so, then one more multi day sell off which will scare even more bulls out of the market. I am going to be scaling out of this oversold play quickly to lock in some gains while allowing a smaller position to ride for larger gains.

Just click here to receive free weekly trading reports from The Gold and Oil Guy.





Crude Oil Tumbles After Unexpected Increase in Gasoline Supply


Crude oil fell more than $2 a barrel after a government report showed an unexpected increase in U.S. gasoline stockpiles and crude supplies rose to a two month high. Gasoline inventories climbed 1.62 million barrels last week, the Energy Department said. A 1 million barrel decline was forecast, according to a Bloomberg News survey. Crude oil inventories rose as imports advanced the first time in five weeks. Oil also dropped as the dollar gained against the euro.

“The gasoline number was a big surprise and makes people less optimistic about the economy and demand,” said Sean Brodrick, natural resource analyst with Weiss Research in Jupiter, Florida. “You are also seeing strength in the dollar, further weakening the oil market.” Crude oil for December delivery fell $2.14, or 2.7 percent, to $77.41 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Futures touched $77.23, the lowest since Oct. 16. Prices have gained 74 percent from the end of 2008 and reached a one-year.....Read the entire article.

Has the Gold Market Topped Out?


That is the big question on many traders’ minds as gold fell from a high around $1,070 to the lows seen on Tuesday.

In our new video that was shot at noon on Tuesday 10/27, we go into detail on what we think is going to happen to this market. We think you will see a refreshing view of the gold market and also the strategies that we’re employing to take advantage of the next big move in gold.

Just Click Here to Watch the Video and as always our videos are free to watch and there is no registration requirement.

Please take a moment to leave a comment and let us know where you think Gold is headed.

Tuesday, October 27, 2009

New Video: Has the S&P Index Topped Out for the Year?


From Adam Hewison at The MarketClub......

There is compelling evidence that we may have seen a top in the S&P index. In my new short video, I show you the evidence that I have found which may point to the fact that we are going to see a correction in this index.

While the S&P index needs to put in more work to create a major top, there are early signs that this may be happening. I think when you watch this video you will come to the same conclusion as I did in regards to this market.

As always our videos are free to view and require no registration. Please feel free to leave a comment to let us know what you are thinking about the potential top in the SP 500.

Just click here to watch Has the S&P Index Topped Out for the Year?

What are you waiting for, Get your 10 FREE trading lessons!

Bottoming U.S. Dollar Threatens Crude Oil Rally


Crude oil was slightly higher due to short covering overnight as it consolidates some of Monday's decline. Stochastics and the RSI are overbought and are turning bearish hinting that a short term top might be in or is near.

Closes below the 20 day moving average crossing at 75.48 would confirm that a short term top has been posted. If December extends this month's rally, weekly resistance crossing at 84.83 is the next upside target.

Tuesday's pivot point, our line in the sand is 79.39

First resistance is last Wednesday's high crossing at 82.00
Second resistance is weekly resistance crossing at 84.83

First support is Monday's low crossing at 77.97
Second support is the 20 day moving average crossing at 75.48

Get 10 Trading Lessons FREE

Natural gas was slightly higher due to short covering overnight as it consolidates some of Monday's decline. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term. Monday's close below the reaction low crossing at 5.280 confirms that a short term top has been posted.

If December extends the decline off last week's high, the 62% retracement level of the September-October rally crossing at 4.970 is the next downside target. Closes above the 20 day moving average crossing at 5.581 would confirm that a short term low has been posted.

First resistance is Monday's gap crossing at 5.473
Second resistance is the 20 day moving average crossing at 5.581

First support is the overnight low crossing at 5.173
Second support is the 62% retracement level at 4.970

Jump Start Your Trading, Get Market Club Today

The U.S. Dollar was lower due to profit taking overnight as it consolidates some of Monday's rally. Stochastics and the RSI are turning bullish hinting that a short term low might be in or is near.

Closes above the 20 day moving average crossing at 76.16 are needed to confirm that a short term low has been posted. If December renews this year's decline, monthly support crossing at 73.39 is the next downside target.

First resistance is the 20 day moving average crossing at 76.16
Second resistance is the reaction high crossing at 76.85

First support is the 10 day moving average crossing at 75.65
Second support is last Wednesday's low crossing at 75.08

Oil Little Changed Around $78 on Forecast U.S. Supplies Grew


Crude oil was little changed around $78 a barrel in New York before a report forecast to show that U.S. crude inventories expanded for a third week. An Energy Department report due tomorrow will probably show that U.S. stockpiles of crude oil rose 1.5 million barrels last week, according to a Bloomberg News survey. Analysts forecast that supplies of gasoline and distillate fuel, a category that includes heating oil and diesel, declined last week.

“It’s overvalued and it may be time for a correction,” said Carsten Fritsch, an analyst with Commerzbank AG in Frankfurt. “The fundamental picture is bearish. Demand outside China is still weak and global stockpiles are ample.” Crude oil for December delivery was at $78.55 a barrel, down 13 cents, at 8:49 a.m. London time. Yesterday, it dropped 2.3 percent to close at $78.68 a barrel on the New York Mercantile Exchange, the biggest decline since Sept. 24 and the lowest settlement since Oct. 16. Prices have gained 76 percent this year and reached a one- year high of $82 a barrel on Oct. 21......Read the entire article.

Learn To Trade Gold ETF's

Monday, October 26, 2009

Crude Oil and Natural Gas ETF Trading

The past week in gold, silver, oil, natural gas and the broad market wasn’t anything to write home about. We are seeing controlled profit taking which is making the market choppy. Many traders are getting very bearish on the market which is a good thing in my opinion. According to my market internals, sentiment and volume analysis we should get a shake out (sharp dip) which would make traders exit their positions before the market continues higher.

Some trader’s say we are in a bull market, others say we are in a major bear market. Either way the trend is up on the daily and weekly charts and companies are making money. Buying on over sold dips has been very profitable this year. Until I see things drastically change, this is my strategy for the broad market.

Lets take a look......

Crude Oil – USO Exchange Traded Fund
Oil has been making a strong rally after breaking out of is multi month consolidation pattern. We are now looking for some type of pullback or test of breakout for another low risk entry point.


Natural Gas – UNG Exchange Traded Fund
Natural gas is having some trouble breaking out above the multi month resistance trend line. Buying here is a 50/50 bet and I will wait for another entry point before putting our money to work.


Crude Oil and Natural Gas Conclusion:
Overall, the market feels ready for quick snapback to shake traders out of profitable positions. I expect a resumption of the up trend as the market slowly creeps higher at a steady pace digesting each rally with sideways movement.

I know many people are shorting the broad market and that is not something I am willing to do yet. Until I see a drastic change, long positions are my bread and butter. Once the market does reverse, there will be plenty of time to play the short side using the Leveraged ETFs.

Commodities are taking a breather but with our support trend lines nearing I expect some movement this week.

If you would like receive these FREE weekly trading charts from The Gold and Oil Guy, Just Click Here!





Dollar Bounces After Slumping Against Euro, Crude Reverses


U.S. crude futures fell on Monday, reversing direction as the dollar bounced off early lows and as Wall Street slumped after opening higher. Sources also said crude's earlier rise above $81 a barrel, which failed to take out the 2009 peak of $82 from last week, and mild U.S. weather provided pressure on heating oil.

The dollar rallied from 14 month lows versus the euro as riskier assets like commodities and U.S. equities fell. The dollar struggled earlier after an opinion piece in a Chinese newspaper said China should increase its holdings of euros and yen in its foreign reserves. U.S. stocks fell, dragged lower by materials and financial shares, erasing earlier gains.

"Crude is trying to consolidate and it's definitely sensitive to swings in the dollar," said Gene McGillian, analyst at Tradition Energy in Stamford, Connecticut ......Read the entire article.

Crude Oil Falls Below $80 as the Dollar Rebounds Against Euro


Crude oil fell below $80 a barrel as the dollar advanced from a 14 month low against the euro, reducing the appeal of commodities, and U.S. equities declined. Energy and metal futures dropped as much as 1.4 percent after the U.S. currency rebounded. Oil also slipped as the Standard & Poor’s 500 Index slumped on analyst downgrades that dragged banking shares lower.

“The strengthening of the dollar is shifting the landscape under the oil market,” said Tim Evans, an energy analyst with Citi Futures Perspective in New York. Crude oil for December delivery fell $1.55, or 1.9 percent, to $78.95 a barrel at 11:58 a.m. on the New York Mercantile Exchange. Futures have gained 77 percent this year. The dollar climbed 0.3 percent to $1.4957 per euro from $1.5008 on Oct. 23. It traded as low as $1.5063 earlier today, the weakest level since.....Read the entire article.

New Video: An Indicator we Can't Ignore, an Insight Into The CRB Index


In our latest video we look into an important indicator that none of us can ignore. Including our elected officials!

This is an indicator which has been around since 1957 and has accurately forecasted every inflationary and deflationary cycle since.

If you only watch one of our videos today make it this one. Weather you trade stocks, futures or commodities you have to pay close attention to world trade trends, and this is the indicator to track.

Just Click Here to watch our third video on this indicator.

Take a few minutes to watch today's short video and see how you can benefit from this indicator. As always the video is free to watch and there is no need to register.

Here is the most recent video in the series from June 9th My Favorite Indicator Of Inflation....And It's Not Gold!.

Please take a minute to leave a comment to us and our readers know what you think of the video.

Sunday, October 25, 2009

Refining Stocks with Dan Dicker

Expert trader Dan Dicker says to buy stocks of refining companies when they report earnings and then sell the stocks next spring.



Saturday, October 24, 2009

Weekend Update: UNG - US Natural Gas Fund ETF


Considering how UNG has been trading in the past few months, this weeks trading was "relatively" stable. This is evidenced by the width of its Bollinger Bands which are tighter than normal. Additionally, UNG is trading within its Bollinger Bands. This is a normal condition and suggests that the stock is neither overbought nor oversold relative to the recent price action.

UNG's MACD is indicating a weak bearish signal. Although the indicator is above the critical level of 0, which implies that the underlying moving averages are bullish, the MACD has crossed below its 9day moving average or signal line. This suggests that positive momentum has begun to slow.

On Friday one of our favorite buy/sell indicators, the Parabolic Sar, showed the UNG closing above the trigger point for the Parabolic SAR and is currently registering a bullish signal. The current Significant Point, below which a reversal to the bearish side would occur, is 10.99.

The Stochastic Oscillator is registering a bearish signal as the %K is below the %D. However, UNG is neither overbought nor oversold.

The RSI is currently at 46.56%, just below the critical 50% line which indicates that the stock is neither overbought nor oversold. Keep an eye on the trend of the RSI to see if the internal strength of UNG is improving or weakening.

Smart Scan Chart Analysis of UNG

Our "Smart Scan" technology shows a strong downtrend in place and that downtrend looks to continues negative longer term and for this market to remain weak. If trading this strong Downtrend make sure to use tight money management stops. The triangle Smart Scan is showing indicates the presence of a very strong trend that is being driven by strong forces and insiders.

Based on a pre-defined weighted trend formula for chart analysis, UNG scored -90 on a scale from -100 (strong downtrend) to +100 (strong uptrend):

+10......Last Hour Close Above 5 Hour Moving Average
-15......New 3 Day Low on Thursday
-20......Last Price Below 20 Day Moving Average
-25......New 3 Week Low, Week Ending October 17th
-30......New 3 Month Low in September
-90......Total Score



Just Click Here if you would like to Create a FREE portfolio to receive this type of FREE trend analysis in your inbox.

Friday, October 23, 2009

Crude Oil Closes Lower on Strength in The U.S. Dollar


Crude oil closed lower [80.50] due to profit taking on Friday as it consolidated some of Wednesday's rally. Stochastics and the RSI are overbought and are turning neutral to bearish hinting that a short term top might be in or is near. The low range close sets the stage for a steady to lower opening on Monday.

Closes below the 20 day moving average crossing at 74.28 would confirm that a short term top has been posted. If December extends this month's rally, the 38% retracement level of the 2008-2009 decline crossing at 84.64 is the next upside target.

First resistance is Wednesday's high crossing at 82.00
Second resistance is the 38% retracement level at 84.64

First support is the 10 day moving average crossing at 78.29
Second support is the 20 day moving average crossing at 74.28

Get Your FREE Preview of INO TV

Natural gas closed lower [4.787] on Friday and the low range close sets the stage for a steady to lower opening on Monday. Today's decline turned stochastics and the RSI bearish signaling that sideways to lower prices are possible near term. If December extends this week's decline, the reaction low crossing at 5.280 is the next downside target.

First resistance is Wednesday's high crossing at 5.989
Second resistance is June's high crossing at 6.170

First support is today's low crossing at 5.473
Second support is the reaction low crossing at 5.280

5 Markets & 5 Ways To Improve Your Trading Profits In 2009

The U.S. Dollar closed higher due to short covering on Friday as it consolidated some of this month's decline. The high range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term.

If December extends this year's decline, monthly support crossing at 73.39 is the next downside target. Closes above the 20 day moving average crossing at 76.28 would confirm that a short term low has been posted.

First resistance is the 10 day moving average crossing at 75.68
Second resistance is the 20 day moving average crossing at 76.28

First support is Wednesday's low crossing at 75.09
Second resistance is monthly support crossing at 73.39

Are the U.S. Dollar and Crude Oil Joined at the Hip?


It would certainly appear that way, as continued weakness in the U.S. Dollar has sparked a stampede into the Crude Oil market lately. On Wednesday, the lead month December Crude Oil futures soared to yearly highs, nearly touching the $82.00 price level. This was the highest nearby futures price since October of 2008. Among the many reasons behind Oil's price rise are signs of an economic rebound, especially in Asia, and to a lesser extent in the U.S. and Europe. The recovery is expected to increase the demand for Oil worldwide as industrial demand improves. However, looking at near term supply and demand in the U.S., the high prices do not seemed justified. Oil stocks (excluding the SPR) are up 10 % from year ago levels. Gasoline supplies are up 7.5% and Distillate Fuel Oil up 33.2% as of October 16th, according to the Energy Information Administration (EIA). Not only are U.S. Oil inventories higher than last year, but poor refining margins have caused refiners to curtail production.

Wednesday's EIA energy stocks report showed refinery utilization stood at 81.1% last week. This compares to 84.8% in 2008 and the 3 year average of 86.03 during the same time period. So if refiners (who are actual users of Oil) are curtailing their Crude purchases, then who is buying and why? Large speculative traders are holding sizeable net long positions in Crude Oil, Gasoline, and Heating Oil according to the Commitment of Traders report. As of October 13th, large non-commercial traders were net long 151,631 Crude Oil contracts, 40,644 Gasoline contracts, and 35,271 Heating Oil contracts. This was up a cumulative 28,930 contracts for the week and shows that new buying was taking place as prices rose.....Read the entire article and charts.

Crude Oil Futures May Decline on Ample Stockpiles, Survey Shows


Crude oil futures may fall next week on speculation that U.S. inventories are sufficient to meet weakening demand. Eighteen of 36 analysts, or 50 percent, said oil will drop through Oct. 30. Twelve respondents, or 33 percent, forecast that the market will rise and six said prices will be little changed. Last week, analysts were split over whether prices would rise or fall.

“There is significant downside risk for crude oil,” said Tim Evans, an energy analyst with Citi Futures Perspective in New York. “Inventories remain high and demand is still weak.” Crude oil stockpiles rose 1.31 million barrels to 339.1 million last week, the U.S. Energy Department said in a report Oct. 21. The gain left inventories 9.4 percent above the five year average for the period. Supplies of distillate fuel, a category that includes heating oil and diesel, were 30 percent higher than average, the department said.....Read the entire article.

Oil Trades Slightly Lower Overnight on Short Covering in The U.S. Dollar


Crude oil was steady to slightly lower overnight as it consolidates some of Wednesday's rally. Stochastics and the RSI are overbought but are neutral signaling that sideways to higher prices are possible near term.

If December extends this month's rally, weekly resistance crossing at 84.83 is the next upside target. Closes below the 20 day moving average crossing at 74.33 would confirm that a short term top has been posted.

Friday's pivot point, our line in the sand is 80.88

First resistance is Wednesday's high crossing at 82.00
Second resistance is weekly resistance crossing at 84.83

First support is the 10 day moving average crossing at 78.39
Second support is the 20 day moving average crossing at 74.33

What are you waiting for....Here is 10 FREE Trading Lessons!

Natural gas was higher due to short covering overnight as it consolidates some of Thursday's decline. Stochastics and the RSI are diverging and are turning bearish hinting that a short term top might be in or is near. Closes below the reaction low crossing at 5.280 are needed to confirm that a short term top has been posted.

If December extends this rally, June's high crossing at 6.170 then the 25% retracement level of the 2008-2009 decline crossing at 6.450 are the next upside targets.

First resistance is Wednesday's high crossing at 5.989.
Second resistance is June's high crossing at 6.170.

First support is Thursday's low crossing at 5.580
Second support is last Thursday's low crossing at 5.280

How To Find Winning Trades In Any Market

The U.S. Dollar was higher due to short covering overnight as it consolidates some of Wednesday's decline. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term.

If December extends this year's decline, monthly support crossing at 73.39 is the next downside target. Closes above the 20 day moving average crossing at 76.27 are needed to confirm that a short term low has been posted.

First resistance is the 10 day moving average crossing at 75.66
Second resistance is the 20 day moving average crossing at 76.27

First support is Wednesday's low crossing at 75.08
Second support is monthly support crossing at 73.39

Crude Oil and Natural Gas Daily Technical Outlook


Nymex Crude Oil (CL)

Crude oil turns sideway after reaching 82 level and met 100% projection of 58.32 to 75 from 65.05 at 81.72. Upside momentum is diminishing a bit but after all, further rise is still expected with 77.61 remains intact. Sustained trading above 81.72 will pave the way to next medium term fibonacci level at 50% retracement of 147.27 to 33.2 at 90.24, which is close to 90 psychological level. On the downside, though, below 77.61 will indicate that a short term top is likely in place, possibly with bearish divergence conditions in 4 hours MACD and RSI. Deeper decline should then be seen to 75 resistance turned support and below.

In the bigger picture, the strong break of 75.0 resistance confirms that medium term rebound from 33.2 has resumed and further rally should be seen. Note that crude oil is now in an important resistance zone of 76.77/90.24 (38.2% and 50% retracement of 147.27 to 33.2). As we're expecting rise from 33.2 to conclude in this zone, we'll look for sign of loss of momentum in the current rise, as well as reversal sign. Nevertheless, note that break of 65.05 is needed to indicate that crude oil has topped out. Otherwise, further rise is still in favor.....here is the charts.

Nymex Natural Gas (NG)

Natural gas' retreat from 5.318 is still in progress and intraday bias remains neutral for the moment. Nevertheless, further rally is still in favor as long as 4.35 support holds and break of 5.318 will target 38.2% retracement of 13.64 to 2.409 at 6.7 next. However, considering bearish divergence conditions in 4 hours MACD, break of 4.35 will indicate that a short term top is formed and deeper pull back should then be seen instead.

In the bigger picture, medium term fall from 13.69 is treated as part of the long term consolidation pattern that started at 15.78 back in 2005. The whole consolidation might have completed at 2.409 after meeting 100% projection of 15.78 to 4.593 from 13.69 at 2.50. We'll prefer the bullish case as long 55 days EMA (now at 4.119 holds) and expect the current rise from 2.409 to extend further to 61.8% retracement of 13.64 to 2.409 at 9.38 in medium term.....here is the charts.

Thursday, October 22, 2009

Phil Flynn: Economic Smack Down


I am trying to figure out who is getting beat up worse, the refiners or the dollar. The smack down on refiners and the dollar send oil on another bullish adventure as commodity price inflation starts to show its adverse economic effects. Refiners for the second week in a row kept refinery runs at historically low levels causing another large drop in gasoline supply which drove RBOB gasoline futures to a seven week high.

The Energy Information Agency reported that refinery use rates rose 0.2 percentage point to 81.1 well below average for this time of year with finished gasoline production at a paltry 8.46 million barrels a day. According to Bloomberg News that was the second week in a row that production fell below 8.5 million barrels and the lowest production was since the week of February 6. The EIA reported that gas supplies fell 2.3 million barrels in the latest week which followed a 5 million barrel plus drop in supply from the week before. Gasoline supply which were almost 7% above the five year average a few weeks ago are now just 3.3% above the five year average. Refiners might as well be on strike as they cannot continue to produce a product that people are buying less of as input prices like crude go up and the dollar weakens. The EIA reported that gasoline demand 3.3 percent from the prior week to an average 8.95 million barrels a day which was the lowest in four weeks.

Add to that another dollar drubbing which helped send oil soaring to another new high. The euro gained strength on speculation that rates in the “zone” could be rising and broke through the $150 level versus the U.S. dollar for the first time in 14 months. Overnight China 8.9% GDP growth was stimulating but is raising questions how long the Chinese government can fuel the growth. Car sales in China were impressive but came on the back of government tax breaks. Fed chairman Ben Bernanke wants the Chinese to spend more but also let the yuan re-adjust so the trade deficit between the US and China can narrow. Early on commodity prices are not that impressed with the Chinese GDP.

Now as oil prices go above $80 OPEC is worried what may happen to demand. Dow Jones is reporting that, “The Organization of Petroleum Exporting Countries will increase its output quota in December, if inventories fall and oil prices and the economy keep recovering", the group's secretary general said Thursday. "If this price continues, if we see the stocks go back to the normal level" and the global economy continues to recover, "I am sure our member countries will take the decision to increase production," Abdalla Salem el-Badri told reporters. He subsequently added another condition to increase output would be "an end to floating storage." OPEC is due to meet next on Dec. 22 in Luanda, Angola. “OPEC is watching what is happening to US refiners and is aware that prices are now at a level that will start a new round of demand destruction and probably will start trying to jawbone the market down. They may be forced to start cheating on production to get prices under control. This would really be a shame because you know how these guys hate to cheat.

The weak dollar is having an impact on everything. How do you protect yourself in a weak dollar environment? Buying precious metals may be one way. If you think that you cannot afford to get in well maybe you are wrong. What if I told you could get into precious metals for as low as $50! Find out how! Just call me at 800-935-6487 or email me. Check me out every day on the Fox Business Network! And if you want a brokerage firm that does things right, you need to be with PFGBest! Whatever you're trading needs we can handle it: cash, grains metals, gold coins, bars and even stocks. If your broker is not doing enough for you call me at 800-935-6487 or email me at pflynn@pfgbest.com. Our platforms are great and the service beyond compare!

Buy December crude at 7427 - stop 7300.
Buy December RBOB at 18000 - stop 17800.
Buy December heating oil at 19500 - stop 19300.
Buy December natural gas at 510 - stop 470.

Phil Flynn @ PFGBEST Research Team
800.462.4691
pflynn@pfgbest.com

Where is Crude Oil Headed on Friday?

CNBC's Sharon Epperson discusses the day's activity in the commodities markets, and looks ahead to where oil is likely headed tomorrow.



Crude Oil Trades Lower as Dollar Bears Fail to Defend $75


Crude oil closed lower due to profit taking on Thursday as it consolidated some of Wednesday's rally. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term. The high range close sets the stage for a steady to higher opening on Friday.

If December extends this month's rally, the 38% retracement level of the 2008-2009 decline crossing at 84.64 is the next upside target. Closes below the 20 day moving average crossing at 73.59 would confirm that a short term top has been posted.

First resistance is Wednesday's high crossing at 82.00
Second resistance is the 38% retracement level at 84.64

First support is the 10 day moving average crossing at 77.50
Second support is the 20 day moving average crossing at 73.59

Get your favorite symbols' FREE Trend Analysis TODAY!

Natural gas closed lower on Thursday and the low range close sets the stage for a steady to lower opening on Friday. Despite today's decline, stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term.

If December extends the rally off September's low, June's high crossing at 6.170 is the next upside target. Closes below the reaction low crossing at 5.280 are needed to confirm that a short term top has been posted.

First resistance is Wednesday's high crossing at 5.989
Second resistance is June's high crossing at 6.170

First support is today's low crossing at 5.580
Second support is the reaction low crossing at 5.280

Today’s Stock Market Club Trading Triangles

The U.S. Dollar closed higher due to short covering on Thursday as it consolidated some of this month's decline. The low range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI are oversold but remain bearish signaling that sideways to lower prices are possible near term.

If December extends this year's decline, monthly support crossing at 73.39 is the next downside target. Closes above the 20 day moving average crossing at 76.36 would confirm that a short term low has been posted.

First resistance is the 10 day moving average crossing at 75.79
Second resistance is the 20 day moving average crossing at 76.36

First support is Wednesday's low crossing at 75.09
Second resistance is monthly support crossing at 73.39

Weekly EIA Natural Gas Storage Report

Working gas in storage was 3,734 Bcf as of Friday, October 16, 2009, according to EIA estimates. This represents a net increase of 18 Bcf from the previous week. Stocks were 397 Bcf higher than last year at this time and 432 Bcf above the 5 year average of 3,302 Bcf. In the East Region, stocks were 114 Bcf above the 5 year average following net injections of 11 Bcf. Stocks in the Producing Region were 252 Bcf above the 5 year average of 935 Bcf after a net injection of 5 Bcf. Stocks in the West Region were 65 Bcf above the 5 year average after a net addition of 2 Bcf. At 3,734 Bcf, total working gas is above the 5 year historical range.



Note: The shaded area indicates the range between the historical minimum and maximum values for the weekly series from 2004 through 2008.

Wednesday, October 21, 2009

Mid Week Oil and Natural Gas Trading Report

Commodities so far this week have not changed much. But I can point out a few things for us to watch Thursday and Friday.

Energy – Oil USO Fund – Energy Stocks XLE Fund
We are seeing a similar pattern in the energy sector. Oil had a nice move higher today while energy stocks sold off. Stocks are starting to fall out of favor.



Natural Gas – UNG Fund
Natural gas is still in a bear market and trading under a major resistance trend line. This commodity could go either way so I am going to wait for the odds to be more on my side before jumping on board with a long or a short trade.



Mid-Week Oil and Nat Gas Conclusion:
The market is starting to look and feel top heavy with many indicators and price action patterns giving cross signals. While the market could continue to rocket higher with new money getting dumped in from average investors because of solid 3rd quarter earnings, we must be cautious by tightening our stops and take some profits off the table. Until we get a short term oversold market condition I am trading very conservatively.

Waiting for a good trade is crucial in trading. If you always want to trade and force positions when the market is choppy you end up with lower probability trades.

To receive Chris Vermeulen's free trading reports just The Gold N Oil Guy.

Record Supplies Have Not Deterred Natural Gas Bulls


The old saying 'every dog has its day' could certainly apply to the Natural Gas futures market as the December futures contract has risen to highs not seen since June, despite a record amount of natural gas in storage. It is still too early to tell to what extent the recent rally may be due to speculative short covering. The most recent Commitment of Traders report shows large non commercial traders were holding a net short position of 64,050 contracts as of October 13th. This was a decline of 1,902 contracts for the week and does not take into account the activity that occurred during the nearly 0.750 point rally since the report was released. Also adding a bit of bullish fuel to the recent rally are predictions that a weak El Nino weather pattern may result in a colder than normal winter.

If true, it may cause utilities Gas usage for heating demand to increase, helping to cut into the current burdensome supplies. Traders are also beginning to anticipate an uptick in industrial demand now that there are signs that the worst of the recession is behind us and an improvement in industrial production may not be far off. However, until we start to see fresh buying entering the market, any major rally attempts could be met with eager sellers, especially with futures trading above cash prices. Traders should monitor government data to gauge the extent of any economic recovery, as Natural Gas futures have been acting as a barometer to economic conditions here in the U.S......read the entire article and charts.

Oil Surges to One Year High on U.S. Gasoline Supply Decline


Crude oil rose above $81 a barrel in New York for the first time in a year and gasoline surged after a U.S. Energy Department report showed a greater than forecast drop in supplies of the motor fuel. Gasoline stockpiles fell 2.21 million barrels, more than twice the median of analyst forecasts, to 206.9 million barrels in the week ended Oct. 16, according to the department’s report. Oil also advanced as U.S. equities increased and the dollar slipped against the euro, bolstering the appeal of commodities.

“The gasoline number has clearly changed the landscape,” said John Kilduff, senior vice president of energy at MF Global in New York. “The industry is seen constraining fuel supply, which is underpinning the market.” Crude oil for December delivery climbed $2.52, or 3.2 percent, to $81.64 a barrel at 12:59 p.m. on the New York Mercantile Exchange. Futures touched $81.73, the highest since Oct. 14, 2008. Prices are up 82 percent this year.

Oil traded at $78.76 a barrel before the release of the report at 10:30 a.m. in Washington. Gasoline for November delivery climbed 5.78 cents, or 2.9 percent, to $2.0455 a gallon in New York. Futures touched $2.0534, the highest since Aug. 31. Prices are up for an eighth day.....Read the entire article.

Is the NASDAQ Now in Thin Air?


Of the three major indexes we track: DOW, NASDAQ and the S&P 500, only the NASDAQ is in thin air.

What do I mean by thin air? So far the NASDAQ is the only index to make it past the 50% Fibonacci retracement levels as measured from the highs seen in 2007 and the lows that were made in March of this year.

Both the Dow and the S&P 500 have rallied strongly from their March lows but have not made it over the 50% retracement level.

Many professional traders - myself included - are looking at the NASDAQ’s Fibonacci retracement as it represents a potentially key turning point for this year’s market.

While not all the pieces are in place to go short or get out of long positions, one of the first clues is being put in place today by the Japanese candlestick charts.

In our new video, we share with you the NASDAQ retracement levels, as well as one of the key components that could lead to a potential reversal to the downside.

Just Click Here to watch the video, and as always our videos are free to watch and there is no need to register.

Please feel free to leave a comment and let our readers know what you think of the video and the direction of the NASDAQ.

Weekly EIA Crude Oil Inventory Report


Summary of Weekly Petroleum Data for the Week Ending October 16, 2009

U.S. crude oil refinery inputs averaged 14.1 million barrels per day during the
week ending October 16, 27 thousand barrels per day under the previous week's
average. Refineries operated at 81.1 percent of their operable capacity last
week. Gasoline production was virtually unchanged last week, averaging 8.5
million barrels per day. Distillate fuel production increased slightly last
week, averaging 3.9 million barrels per day.

U.S. crude oil imports averaged 8.7 million barrels per day last week, down 32
thousand barrels per day from the previous week. Over the last four weeks,
crude oil imports have averaged 9.0 million barrels per day, 310 thousand
barrels per day below the same four week period last year. Total motor gasoline
imports (including both finished gasoline and gasoline blending components)
last week averaged 649 thousand barrels per day. Distillate fuel imports
averaged 120 thousand barrels per day last week.

U.S. commercial crude oil inventories (excluding those in the Strategic
Petroleum Reserve) increased by 1.3 million barrels from the previous week. At
339.1 million barrels, U.S. crude oil inventories are above the upper boundary
of the average range for this time of year. Total motor gasoline inventories
decreased by 2.3 million barrels last week, and are near the upper limit of the
average range. Finished gasoline inventories decreased while blending
components increased last week. Distillate fuel inventories decreased by 0.8
million barrels, and are above the upper boundary of the average range for this
time of year. Propane/propylene inventories decreased by 1.4 million barrels
last week and are at the upper limit of the average range. Total commercial
petroleum inventories decreased by 4.2 million barrels last week, and are above
the upper limit of the average range for this time of year.

Total products supplied over the last four week period has averaged 18.8
million barrels per day, down by 0.1 percent compared to the similar period
last year. Over the last four weeks, motor gasoline demand has averaged about
9.2 million barrels per day, up by 4.2 percent from the same period last year.
Distillate fuel demand has averaged 3.5 million barrels per day over the last
four weeks, down by 12.1 percent from the same period last year. Jet fuel
demand is 3.2 percent lower over the last four weeks compared to the same
four week period last year.

Crude Oil Lower on Profit Taking, Euro Weakness


Crude oil was lower due to profit taking overnight as it consolidates some of this month's rally. Stochastics and the RSI are overbought and are turning bearish hinting that a short term top might be in or is near.

While the Euro was slightly higher overnight day traders are looking at bearish set ups in the Euro with a possibility of trading as low as 148.34 putting additional pressure on crude oil.

If December extends this rally, weekly resistance crossing at 84.83 is the next upside target. Closes below the 20 day moving average crossing at 72.69 would confirm that a short term top has been posted.

Wednesday's pivot point, our line in the sand is 79.12

First resistance is Tuesday's high crossing at 80.40
Second resistance is weekly resistance crossing at 84.83

First support is the 10 day moving average crossing at 76.27
Second support is the 20 day moving average crossing at 72.69

Get Your FREE Preview of INO TV

Natural gas was lower due to profit taking overnight as it consolidates some of the rally off last Thursday's low. Stochastics and the RSI are diverging but remain bullish signaling that sideways to higher prices are possible near term.

If December extends this rally, June's high crossing at 6.170 then the 25% retracement level of the 2008-2009 decline crossing at 6.450 are the next upside targets. Closes below the reaction low crossing at 5.200 are needed to confirm that a short term top has been posted.

Natural gas pivot point for Wednesday is 5.077

First resistance is the overnight high crossing at 5.989
Second resistance is June's high crossing at 6.170

First support is the 20 day moving average crossing at 5.634
Second support is last Thursday's low crossing at 5.280

Learn to Trade Forex in Just 90 Seconds!

The U.S. Dollar was lower overnight as it extends last week's decline. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term.

If December extends this year's decline, monthly support crossing at 73.39 is the next downside target. Closes above the 20 day moving average crossing at 76.47 are needed to confirm that a short term low has been posted.

First resistance is the 10 day moving average crossing at 75.91
Second resistance is the 20 day moving average crossing at 76.47

First support is Monday's low crossing at 75.25
Second support is monthly support crossing at 73.39

Tuesday, October 20, 2009

Oil Falls From a One Year High as Stocks Decline, Dollar Climbs


Crude oil fell from a one year high as U.S. equities dropped and the dollar rebounded, reducing the appeal of commodities as an alternative investment. Oil declined for the first time in nine days as a disappointing report on housing starts overshadowed better than estimated earnings at companies from Apple Inc. to Pfizer Inc. Futures traded above $80 early today as the Dollar Index, which measures the greenback against six major currencies, weakened to its lowest level since August 2008.

“Oil is mainly taking its cue from what’s happening in the financial markets,” said Jim Ritterbusch, president of Ritterbusch & Associates, a Galena, Illinois, consultant. “This shouldn’t be too much of a surprise after the good run we’ve had to the upside.” Crude oil for November delivery fell 81 cents, or 1 percent, to $78.80 a barrel at 10:39 a.m. on the New York Mercantile Exchange. Earlier, prices rose as much as 0.6 percent to $80.05 a barrel, the first time the front-month contract has traded above $80 since Oct. 14, 2008. Futures are heading for the biggest drop since Oct. 7. The November contract expires today. More active December futures declined 84 cents.....Read the entire article.

Monday, October 19, 2009

Bloomberg Analysis: Oil Breaks Resistance, May Climb to $90


Crude oil has breached a key resistance level of $76.28 a barrel, giving it the “capacity” to rise to just under $90 based on Fibonacci retracements, Australia & New Zealand Banking Group Ltd. said. Oil, which is trading near a one year high in New York, is “taking a pause” to consolidate before moving up toward $89.85 a barrel, said Geoff Clear, the Singapore based head of Asian commodities at ANZ.

“We saw a break above $76.28 a barrel, that was the big ‘break up’ level,” Clear said. “We’re in a new range.” Crude prices have surged 83 percent since March 5 while the Dollar Index, which tracks the currency against those of six major U.S. trading partners, has fallen 16 percent since then. The sliding U.S. dollar and a recovery in equity markets prompted investors to buy commodities as an inflation hedge.

Crude may encounter its next resistance level at $83.60, according to Clear. “If we start to get close to the $83.60 level, it’s the next targeted Fibonacci retracement that I can see in the market,” Clear said. “Prices will do a bit of work below $83.60 initially, and then we’ll go on from there”.....Read the entire article.

ShareThis