Thursday, December 31, 2009

Do I Hear Seven Days? Crude Oil Closes Higher....AGAIN!


Crude oil closed higher for the seventh day in a row on Thursday as it extends the rally off this month's low. Profit taking tempered early gains and the mid range close sets the stage for a steady opening on Monday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term.

If February extends this rally, the reaction high crossing at 80.40 is the next upside target. Closes below the 20 day moving average crossing at 75.47 would confirm that a short term top has been posted.

First resistance is today's high crossing at 80.00
Second resistance is the reaction high crossing 80.40

First support is the 10 day moving average crossing at 76.77
Second support is the 20 day moving average crossing at 75.47

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Natural gas closed sharply lower for the third day in a row on Thursday. The low range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are overbought, diverging and are turning bearish signaling that sideways to lower prices are possible near term.

Closes below the 20 day moving average crossing at 5.465 would confirm that a short term top has been posted. If February extends December's rally, the 87% retracement level of this fall's decline crossing at 6.077 is the next upside target.

First resistance is Tuesday's high crossing at 6.038
Second resistance is the 87% retracement level of this fall's decline crossing at 6.077

First support is today's low crossing at 5.505
Second support is the 20 day moving average crossing at 5.465

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The U.S. Dollar closed lower on Thursday ending a two day short covering bounce. However, the high range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are neutral to bearish hinting that a short term top might be in or is near.

Closes below the 20 day moving average crossing at 77.38 are needed confirm that a short term top has been posted. If March renews the current rally, the 38% retracement level of the 2008-2009 decline crossing at 79.72 is the next upside target.

First resistance is last Tuesday's high crossing at 78.77
Second resistance is the 38% retracement level of the 2008-2009 decline crossing at 79.72

First support is Tuesday's low crossing at 77.67
Second support is the 20 day moving average crossing at 77.38

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Year End Commodity & ETF Trend Trading Signals

Well, here we are with only hours left before the year is over. Virtually every investment is up other than the US dollar. Not much has changed since my last gold market trends report. But I have provided some interesting charts that show us what is possible in the coming weeks for the dollar, gold and natural gas.

US Dollar Trend Analysis – Resistance Levels
The dollar has shown some strength in the past month. It was a no brainer trade for 2009. You were either long gold or short the dollar. The chart below shows the key resistance levels for the $USD. I have a feeling we are going to see the dollar test the 80 -81 levels before rolling over and heading south again.

If this happens then gold and silver will continue to pull back. I am actually hoping the dollar moves higher and gold drops back to test the $1000-1060 level. This would clear the way for gold and the dollar to continue with their longer term trends with increased momentum (dollar collapses, gold goes parabolic).



GLD Gold ETF – Daily Chart
The daily gold swing trading chart is really starting to look attractive for a buy signal. Depending on what the US dollar does in the coming days will set the tone for gold.

We could see gold start to rally starting tomorrow or it will become volatile and start to sell off sharply in the coming days. Right now we have very light volume so any moves/breakouts cannot be taken seriously or with a large position.

If the dollar starts to rally we could see the GLD ETF drop to the $97.50 – $103 level.



Spot Gold Trend Analysis – 18 Day, 1hr Bar Chart
Starting in 2010 I will be providing futures trading analysis and signals so I thought I would provide a chart of the spot gold trend I have been day trading over the holidays.

This may seem like I am going against my #1 trading Rule – Never Trade Against the Trend, but the trend changes depending on time frame and trading style you are using. In short, gold reversed very strong 18 days ago just as we anticipated it would. The selling momentum was so strong it made for excellent gold futures day trading setups which I took advantage of over the past 10 trading days.

The chart below is of the 100 ounce gold GC Feb 10 futures contract which I traded. The chart is shrunk down and does not show my setups, nor does the chart look very sexy, but it clearly shows the direction of the trend and the BIG SELLING VOLUME.

The table shows my recent trades and if you take a close look all of the trades I did were Short Trades. Because the momentum and trend is down on this time frame I only traded perfect short setups (profiting from gold as it loses value).



UNG Natural Gas Trading Fund
UNG appears to be trading at resistance and starting to look like its rolling over. It did move above last weeks high which voids the reversal candle we had Tuesday and Thursday, or else it would have been a short setup for us. I don’t chase a trade, that’s my #2 rule, so I am waiting for a possible bounce here, test of resistance then another reversal back down.



Commodity & ETF Year End Trends
In short, we continue the waiting game for more setups in the coming weeks as volatility and volume creep back into the market. The dollar and gold are currently trading at pivot points and no one knows which way to play them.

Trading futures run virtually 24 hours a day and have provided some excellent trading opportunities that I will be providing in the coming weeks for traders.

Natural Gas is trading at pivot point and looking ready for another move down.

Crude oil and the board market I feel will top out in the next 2-5 days but nothing worth putting any money on at this time.

I would like to thank everyone for their kind words and support over the past 12 months. I wish you all a happy and safe New Years!

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Crude Oil to Record the Strongest Annual Gain in a Decade


Crude oil edged higher to settle at 79.28, up +0.5%, Wednesday as the EIA report showed inventory draw in crude and major oil products. Tension between Iran and the Western world, potential oil exports from OPEC and market optimism after strong macro-economic data also boosted price. The February contract, currently trading at 79.6, is prone to record the third weekly gain. Crude oil price, surging almost +80% in 2009, will probably record the biggest annual increase since 1999. According to the US Energy Department, crude inventory drew -1.54 mmb to 326 mmb in the week ended December 25. Cushing stock also drew -0.19 mmb. For oil products, distillate stockpile dipped -2.06 mmb (consensus: -2.23 mmb) to 159.3 mmb. This an initial sign of moderation in the pace of inventory draw. Gasoline inventory also dropped -0.37 mmb to 216 mmb.

Decline in inventory levels in recent weeks has been sending a positive signal to investors that the energy market is improving. This is also the major reason for oil's rally these 2 weeks. However, details in fuel demand suggest we should be more cautious. 4 week averaged demand for gasoline was 9.024M bpd, compared with 9.041M bpd the same period in 2009, while the 4-week averaged demand for distillate, at 3.689M bpd , was -8.8% below the same period last year. Since the protest began on December 27 in Tehran, the Iranian government has detained about 1000 people. At the same time, Iran accuses Western countries of spurring the demonstrations. Oil prices usually get supported when turmoil occurs, especially in the Middle East as the region in rich in oil. Iran, the world's second largest oil producer, may threaten to suspend oil exports if the tension escalates.....Read the entire article.

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Crude Oil and Natural Market Commentary For Thursday Morning


Crude oil was higher overnight as it extends the rally off this month's low. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term.

If February extends this rally, the reaction high crossing at 80.40 is the next upside target. Closes below the 20 day moving average crossing at 75.47 are needed to confirm that a short term top has been posted.

Thursday's pivot point, our line in the sand is 79.18

First resistance is the overnight high crossing at 79.98
Second resistance is the reaction high crossing at 80.40

First support is the 10 day moving average crossing at 76.77
Second support is the 20 day moving average crossing at 75.47

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Natural gas was higher due to short covering overnight as it consolidates some of Wednesday's decline but remains below broken support marked by the 10 day moving average crossing at 5.801. Stochastics and the RSI are overbought, diverging and are turning bearish signaling that sideways to lower prices are possible near term.

Closes below the 20 day moving average crossing at 5.475 are needed to confirm that a short term top has been posted. If February resumes this month's rally, the 87% retracement level of the October-December decline crossing at 6.077 is the next upside target.

Natural gas pivot point for Thursday is 5.770

First resistance is Tuesday's high crossing at 6.038
Second resistance is the 87% retracement level of the October-December decline crossing at 6.077

First support is the overnight low crossing at 5.679
Second support is the 20 day moving average crossing at 5.475

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The U.S. Dollar was lower overnight and is trading below initial support marked by the 10 day moving average crossing at 78.20. Stochastics and the RSI have turned bearish hinting that a short term top might be in or is near.

Closes below the 20 day moving average crossing at 77.36 are needed to confirm that a short term top has been posted. If March renews this month's rally, the 38% retracement level of the 2008-2009 decline crossing at 79.72 is the next upside target.

First resistance is last Tuesday's high crossing at 78.77
Second resistance is the 38% retracement level of the 2008-2009 decline crossing at 79.72

First support is Tuesday's low crossing at 77.67
Second support is the 20 day moving average crossing at 77.36

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Wednesday, December 30, 2009

Do I Hear Six Days? Crude Oil Closes Higher Yet Again


Crude oil closed higher for the sixth day in a row on Wednesday as it extends the rally off this month's low. Tighter crude oil inventories were the primary factor behind today's strength in the crude oil market. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are becoming overbought but remain bullish signaling that sideways to higher prices are possible near term.

If February extends this rally, the reaction high crossing at 80.40 is the next upside target. Closes below the 20 day moving average crossing at 75.40 would confirm that a short term top has been posted.

First resistance is today's high crossing at 79.80
Second resistance is the reaction high crossing 80.40

First support is the 10 day moving average crossing at 76.26
Second support is the 20 day moving average crossing at 75.40

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Natural gas closed lower due to profit taking on Wednesday and below the 10 day moving average crossing at 5.774 signaling that a short term top has likely been posted. The low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are overbought but are neutral signaling that sideways to higher prices are possible near term.

If February extends this month's rally, the 87% retracement level of this fall's decline crossing at 6.077 is the next upside target. Closes below the 20 day moving average crossing at 5.416 would confirm that a short term top has been posted.

First resistance is Tuesday's high crossing at 6.038
Second resistance is the 87% retracement level of this fall's decline crossing at 6.077

First support is today's low crossing at 5.695
Second support is the 20 day moving average crossing at 5.416

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The U.S. Dollar closed higher due to short covering on Wednesday as it consolidated some of the decline off last week's high. Profit taking tempered early session gains and the low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are turning neutral to bearish hinting that a short term top might be in or is near.

Closes below the 20 day moving average crossing at 77.22 are needed confirm that a short term top has been posted. If March renews the current rally, the 38% retracement level of the 2008-2009 decline crossing at 79.72 is the next upside target.

First resistance is last Tuesday's high crossing at 78.77
Second resistance is the 38% retracement level of the 2008-2009 decline crossing at 79.72

First support is Tuesday's low crossing at 77.67
Second support is the 20 day moving average crossing at 77.22

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OPEC Has Way Too Much Oil For 2010


According the Energy Information Administration's (EIA) latest energy outlook, while world energy consumption is expected to grow in 2010, it will only be adding 1.1 million barrels of consumption and will remain below its past peak consumption.
This tepid demand growth will butt against production increases for many non OPEC oil producers, which means that OPEC will be under substantial pressure to limit its output, and obviously will.

Yet this will require massive discipline for the member nations given that OPEC's surplus crude oil production capacity will actually rise in 2010, after a huge increase is surplus capacity during 2009. 2010 will see the worst OPEC overcapacity situation since 2002.....Let's go to the charts!.

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Natural Gas Producers Seek Long Term Contracts


In a sign that low natural gas prices are probably here to stay, big U.S. energy companies are pushing to sign long term contracts with electric utilities and other customers. Major producers such as Chesapeake Energy Corp. and Devon Energy Corp. are trying to reach multiyear deals, likely five or 10 years long, that would guarantee them buyers for their gas but would deny them the benefits from any sudden price increases.

For a decade, energy companies have shunned such agreements because they wanted to profit when gas prices soared, as they often did, especially in advance of rising winter demand for gas heat. But huge new gas fields in Texas, Louisiana, Pennsylvania and elsewhere have led to a surge in U.S. natural gas production, glutting the market even as the recession has sapped demand for all forms of energy. Prices have plummeted to less than $6 per million British thermal units, less than half their price in July 2008.....Read the entire article.

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Crude Oil Set for Biggest Annual Gain in Decade Amid Iran Political Unrest


Crude oil was little changed, heading for its biggest annual gain in a decade, on forecasts that U.S. stockpiles are narrowing while unrest in Iran sows concerns supply will be disrupted. U.S. crude inventories likely fell by 1.85 million barrels last week, according to analysts surveyed by Bloomberg News before an Energy Department report due today at 10:30 a.m. in Washington. Iran, holder of the world’s second largest crude reserves, detained about 1,000 people after the biggest anti- government demonstrations in six months.

“Stocks are showing the market is getting towards a more balanced situation, though it will take time,” said Alexandra Kogelnig, a consultant with JBC Energy GmbH in Vienna. “Tensions in Iran are always a factor even if there is nothing immediately happening, as if something major happens it will affect exports.” Crude oil for February delivery was at $78.73 a barrel, 14 cents lower in electronic trading on the New York Mercantile Exchange, as of 12:57 p.m. London time. It earlier rose as much as 32 cents, or 0.4 percent, to $79.19 a barrel. Futures are set for a 77 percent gain this year, the biggest since 1999. Prices have tripled in the past decade.....Read the entire article.

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Crude Oil and Natural Gas Technical Outlook For Wednesday Morning


Nymex Crude Oil (CL)

Upside momentum in crude oil remains unconvincing with 4 hours MACD staying below signal line. Bias remains neutral for the moment and some more sideway consolidation could be seen. But still, downside should be contained by 76.19 support and bring another towards 82.0 resistance. However, a break of 76.19 will argue that rebound from 68.59 has completed and deeper fall should then be seen to 71.21 support first.

In the bigger picture, the strong rebound from put crude oil back above 55 days EMA and dampens the bearish view that it has topped out at 33.2. We'll stay neutral for the moment with focus on 82.0 resistance. Break there will indicate that whole medium term rise from 33.2 is still in progress. Nevertheless, focus will remain on reversal signal as we'd expect such rise to conclude inside 76.77/90.24 fibo resistance zone.....Nymex Crude Oil Continuous Contract 4 Hours Chart.

Nymex Natural Gas (NG)

Natural gas retreats again after rising to 6.035 and continues to lose upside moment. Intraday bias is turned neutral for the moment. Considering bearish divergence conditions in 4 hours MACD, a short term top might be in place at 6.035 already. Break of 5.76 will bring deeper pull back towards 5.29 resistance turned support. On the upside, though, above 6.035 will indicate that recent rise is still in progress for 38.2% retracement of 13.694 to 2.409 at 6.72.

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 and might have completed at 2.409 already. Rise from 2.409 is still in progress and should target 38.2% retracement of 13.694 to 2.409 at 6.72 and beyond. On the downside, break of 4.157 support is needed to indicate that medium term rise from 2.409 has completed. Otherwise, outlook is neutral at worst even in case of deep pullback.....Nymex Natural Gas Continuous Contract 4 Hours Chart.

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Crude Oil Bulls Maintain The Advantage Despite Profit Taking


Crude oil was slightly lower due to light profit taking overnight as it consolidates some of its recent gains. Stochastics and the RSI are overbought but remain bullish signaling that sideways to higher prices are possible near term.

If February extends this rally, the reaction high crossing at 80.40 is the next upside target. Closes below the 20 day moving average crossing at 75.38 are needed to confirm that a short term top has been posted.

Wednesday's pivot point, our line in the sand is 78.76

First resistance is Tuesday's high crossing at 79.39
Second resistance is the reaction high crossing at 80.40

First support is the 10 day moving average crossing at 76.20
Second support is the 20 day moving average crossing at 75.38

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Natural gas was slightly lower due to light profit taking overnight as it consolidates some of Monday's rally. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term.

If February extends this month's rally, the 87% retracement level of the October-December decline crossing at 6.077 is the next upside target. Closes below the 20 day moving average crossing at 5.423 would confirm that a short term top has been posted.

Natural gas pivot point for Wednesday is 5.900

First resistance is Tuesday's high crossing at 6.038
Second resistance is the 87% retracement level of the October-December decline crossing at 6.077

First support is the 10 day moving average crossing at 5.787
Second support is the 20 day moving average crossing at 5.423

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The U.S. Dollar was higher overnight as it consolidates above initial support marked by the 10 day moving average crossing at 78.15. However, stochastics and the RSI are turning neutral to bearish hinting that a short term top might be in or is near.

Closes below the 20 day moving average crossing at 77.22 are needed to confirm that a short term top has been posted. If March renews this month's rally, the 38% retracement level of the 2008-2009 decline crossing at 79.72 is the next upside target.

First resistance is last Tuesday's high crossing at 78.77
Second resistance is the 38% retracement level of the 2008-2009 decline crossing at 79.72

First support is Tuesday's low crossing at 77.67
Second support is the 20 day moving average crossing at 77.22

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Tuesday, December 29, 2009

Phil Flynn: New Year Traditions


Energy disputes between the Ukraine and Russia are becoming as much of a New Year’s tradition as the Waterford ball falling in Times Square. Once again as the new year approaches, we have another dispute between Russia and the Ukraine that may or may not be settled and rising tensions in and around Iran may cause more caution from sellers as we get ready to celebrate another holiday.

Sometimes the price gets ahead of the fundamentals. Other times the fundamentals catch up to the price. Last week in a holiday shortened trading week, oil got too excited about cold weather and a flawed weekly inventory report as the marketplace lacked the type of perspective it has when there is more volume. Yet yesterday I feared that the market might not be taking seriously enough the threats that were evolving in Europe and Iran. Of course if you assume that last week went too high and now we are holding gains it looks like once again the market had it right in the first place. It seems that rising geo-political heat is in part helping justify the extended rise.....Read the entire article.

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Precious Metals Market Commentary For Tuesday Evening


Gold closed lower on Tuesday ending a three day short covering rally off last week's low. The low range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI have turned bullish hinting that a short term low might be in or is near.

Closes above the 20 day moving average crossing at 1133.20 are needed to confirm that a short term low has been posted. If February renews this month's decline, the 38% retracement level of this year's rally crossing at 1032.60 is the next downside target.

First resistance is Monday's high crossing at 1114.50
Second resistance is the 20 day moving average crossing at 1133.20

First support is last Tuesday's low crossing at 1075.20
Second support is the 38% retracement level of this year's rally crossing at 1032.60

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Silver closed sharply lower on Tuesday ending a three day correction off last week's low. Today's decline was attributed to book squaring ahead of year's end and a slight rebound in the Dollar. Additional pressure came from strength in the equity markets. The low range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI have turned bullish hinting that a short term low might be in or is near.

Closes above the 20 day moving average crossing at 17.709 are needed to confirm that a short term low has been posted. If March renews this month's decline, the reaction low crossing at 16.155 is the next downside target.

First resistance is the 20 day moving average crossing at 17.709
Second resistance is this month's high crossing at 19.500

First support is last Tuesday's low crossing at 16.780
Second support is the reaction low crossing at 16.155

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Copper posted an inside day with a lower close due to profit taking on Tuesday as it consolidated recent gains. The low range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term.

If March extends the late December rally, the 87% retracement level of the 2008 decline crossing at 347.94 is the next upside target. Closes below the 20 day moving average crossing at 319.52 are needed to confirm that a short term top has been posted.

First resistance is Monday's high crossing at 334.40
Second resistance is the 87% retracement level of the 2008 decline crossing at 347.94

First support is the 20 day moving average crossing at 319.52
Second support is the reaction low crossing at 308.15

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Natural Gas Profits: One Minute Trade

All natural gas stocks are not traded equally - time to take money off the table of Piedmont Natural gas - PNY



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Can You Say FIVE Days in a Row! Crude Oil Closes Higher Again


Crude oil closed higher for the fifth day in a row on Tuesday as it extends the rally off this month's low. Profit taking tempered early session gains and the mid range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term.

If February extends this rally, the reaction high crossing at 80.40 is the next upside target. Closes below the 20 day moving average crossing at 75.43 would confirm that a short term top has been posted.

First resistance is today's high crossing at 79.39
Second resistance is the reaction high crossing 80.40

First support is the 10 day moving average crossing at 75.59
Second support is the 20 day moving average crossing at 75.43

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Natural gas closed lower due to profit taking on Tuesday as it consolidates some of this month's rally. The low range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are overbought but are neutral to bullish signaling that sideways to higher prices are possible near term.

If February extends this month's rally, the 87% retracement level of this fall's decline crossing at 6.077 is the next upside target. Closes below the 20 day moving average crossing at 5.374 would temper the near term friendly outlook in the market.

First resistance is today's high crossing at 6.038
Second resistance is the 87% retracement level of this fall's decline crossing at 6.077

First support is the 10 day moving average crossing at 5.762
Second support is the 20 day moving average crossing at 5.374

Today’s Stock Market Club Trading Triangles

The U.S. Dollar closed higher due to short covering on Tuesday as it consolidated some of the decline off last week's high. The high range close sets the stage for a steady to higher opening on Wednesday.

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 10 day moving average crossing at 78.06 would signal that a short term top has likely been posted.

Closes below the 20 day moving average crossing at 77.05 would confirm that a short term top has been posted. If March renews the current rally, the 38% retracement level of the 2008-2009 decline crossing at 79.72 is the next upside target.

First resistance is last Tuesday's high crossing at 78.77
Second resistance is the 38% retracement level of the 2008-2009 decline crossing at 79.72

First support is the 10 day moving average crossing at 78.06
Second support is the 20 day moving average crossing at 77.05

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Oil Hits Five Week High, Nears $80


Oil prices gained for a fourth straight session, climbing to their highest level in more than five weeks as cold weather swept across the country and the dollar weakened. Crude oil for February delivery rose 72 cents, or nearly 1%, to settle at $78.77 a barrel, the highest since Nov. 18, when prices settled at $79.58 a barrel.

Cooler than normal temperatures have supported rising oil prices, said James Cordier, president of Liberty Trading Group. He added that temperatures in the Northeast have been about five degrees lower than average and are expected to remain that way for the near term.

Prices were also boosted by a softer dollar, which edged lower against its major rivals. Crude oil, like other commodities, is priced in dollars, and a weaker greenback can help support prices.....Read the entire post.

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Oil Fluctuates as Heating Oil Climbs, U.S. Dollar Gains Against Euro


Crude oil fluctuated as heating oil rose to a two-month high on forecasts for cold weather in the U.S. and the dollar strengthened against the euro, reducing the appeal of commodities as an alternative investment. Oil touched a five week high earlier today on the outlook for below normal temperatures for much of the nation next week. Reports signaling that the U.S. economy may be rebounding from the worst recession since World War II bolstered the dollar, pressuring commodities.

“Another arctic blast is supportive,” said Phil Flynn, vice president of research at PFGBest in Chicago. “Still, we’re up a little bit on the dollar, and that’s a reason for people to get out of the upside on crude.” Crude oil for February delivery rose 2 cents to $78.79 a barrel at 12:39 p.m. on the New York Mercantile Exchange. Earlier, it touched $79.39, the highest level since Nov. 23.

Heating demand is expected to be above normal in the Northeast, Southeast and central U.S. for most of the week through Jan. 5, David Salmon, a forecaster at Weather Derivatives in Belton, Missouri, said in a report today.....Read the entire article.

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Crude Oil Technical Outlook For Tuesday


With 4 hours MACD crossed below signal line, an intraday top might be in place and bias is turned neutral for some consolidations. Nevertheless, we'd expect downside to be contained by 76.19 support and bring another rise. Current development indicates that choppy fall from 82.0 has completed at 68.59 already. Rise from there is expected to continue to retest this 82.0 resistance next.

In the bigger picture, the strong rebound from put crude oil back above 55 days EMA and dampens the bearish view that it has topped out at 33.2. We'll stay neutral for the moment with focus on 82.0 resistance. Break there will indicate that whole medium term rise from 33.2 is still in progress. Nevertheless, focus will remain on reversal signal as we'd expect such rise to conclude inside 76.77/90.24 fibo resistance zone.....Nymex Crude Oil Continuous Contract 4 Hours Chart.

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Crude Oil and Natural Gas Market Commentary For Tuesday Morning


Crude oil was slightly lower due to light profit taking overnight as it consolidates some of last week's rally. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term.

If February extends this rally, the reaction high crossing at 80.40 is the next upside target. Closes below the 20 day moving average crossing at 75.42 are needed to confirm that a short term top has been posted.

Monday's pivot point, our line in the sand is 78.55

First resistance is Monday's high crossing at 79.12
Second resistance is the reaction high crossing at 80.40

First support is the 10 day moving average crossing at 75.58
Second support is the 20 day moving average crossing at 75.42

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Natural gas was lower due to light profit taking overnight as it consolidates some of Monday's rally. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term.

If February extends this month's rally, the 87% retracement level of the October-December decline crossing at 6.077 is the next upside target. Closes below the 20 day moving average crossing at 5.380 would confirm that a short term top has been posted.

First resistance is the overnight high crossing at 6.025
Second resistance is the 87% retracement level of the October-December decline crossing at 6.077

Natural gas pivot point for Monday is 5.938

First support is the 10 day moving average crossing at 5.774
Second support is the 20 day moving average crossing at 5.380

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The U.S. Dollar was lower overnight and trading below initial support marked by the 10 day moving average crossing at 78.02. 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 77.03 would confirm that a short term top has been posted. If March renews this month's rally, the 38% retracement level of the 2008-2009 decline crossing at 79.72 is the next upside target.

First resistance is last Tuesday's high crossing at 78.77
Second resistance is the 38% retracement level of the 2008-2009 decline crossing at 79.72

First support is the overnight low crossing at 77.71
Second support is the 20 day moving average crossing at 77.03

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Monday, December 28, 2009

Sharon Epperson: 2010 Oil Outlook

A look at where oil prices will be headed in 2010, with CNBC's Sharon Epperson.




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Crude Oil Closes Higher, Fourth Day in a Row!


Crude oil closed higher for the fourth day in a row on Monday as it extends last week's rally above the 20 day moving average. The high range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term.

If February extends today's rally, the reaction high crossing at 80.40 is the next upside target. Closes below last Tuesday's low crossing at 72.72 would confirm that a short term top has been posted.

First resistance is today's high crossing at 79.12
Second resistance is the reaction high crossing 80.40

First support is the 20 day moving average crossing at 75.41
Second support is the 10 day moving average crossing at 74.89

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Natural gas closed higher on Monday as it extends this month's rally. The high range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are overbought but are neutral to bullish signaling that sideways to higher prices are possible near term.

If February extends this month's rally, the 87% retracement level of this fall's decline crossing at 6.077 is the next upside target. Closes below the 20 day moving average crossing at 5.328 would temper the near term friendly outlook in the market.

First resistance is today's high crossing at 6.011
Second resistance is the 87% retracement level of this fall's decline crossing at 6.077

First support is the 10 day moving average crossing at 5.715
Second support is the 20 day moving average crossing at 5.328

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The U.S. Dollar closed lower due to profit taking on Monday as it consolidated some of this month's rally. The low range close sets the stage for a steady to lower opening on Tuesday. 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 10 day moving average crossing at 77.91 would signal that a short term top has likely been posted. Closes below the 20 day moving average crossing at 76.90 would confirm that a short term top has been posted. If March extends its current rally, the 38% retracement level of the 2008-2009 decline crossing at 79.72 is the next upside target.

First resistance is last Tuesday's high crossing at 78.77
Second resistance is the 38% retracement level of the 2008-2009 decline crossing at 79.72

First support is the 10 day moving average crossing at 77.91
Second support is the 20 day moving average crossing at 76.90

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Phil Flynn: Is This Santa For Real?


Oil prices get swept up in a Santa Claus rally as light volume a strong stock market as well as a surprise drawdown in inventory gives the illusion of strong demand. Ho, Ho, Ho! Yet we may find out that yes, Virginia, indeed this Santa rally, despite my better judgment, may be real if oil closes above $79 a barrel.

Last week the market got a bullish boost on a surprise draw down in oil supply when the Energy Information Agency, an arm of the Department of Energy, reported that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 4.9 million barrels from the previous week. That caught the market by surprise because we also saw a drawdown in the supply of distillates to the tune of 3.1 million barrels. Don’t try to reason that supply is way above normal or that most likely the draws are skewered due to bad weather conditions impacting imports because none of these justifications seem to matter. You just have to believe. You really will have to believe if oil closes above $79 a barrel.

Now some think the rally is for real because of the early blast of winter. Despite the worries over global warming, it is cold weather that is inspiring demand. In other words even though supplies are above the five year average, weather may be colder this winter than the five year average. The EIA on demand said that over last four weeks, total products supplied by refiners came in at an average 18.9 million barrels per day which was down by 1.1 percent compared to last year. For gasoline, over the last four weeks demand averaged 9.0 million barrels per day, up by 0.8 percent from the same period last year. Distillate fuel demand has averaged 3.7 million barrels per day over the last four weeks, down by 3.9 percent from the same period last year despite the fact that it was colder.....Read the entire article.

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Large Part of Crude Rally Was Due to Investment Flow


Commodity prices stay strong in European session as USD retreats against major currencies. The benchmark contract for gold climbs to 1113 and is likely to record a third day of increases. On weekly basis, the yellow metal is anticipated to gain for the first time in 5 weeks.

Base metals stay strong after rallying for 2 weeks. While the LME is still closed, copper futures in Comex and Shanghai Futures Exchange (SFE) advance. Strong industrial production in Japan and labor action in copper mine suggest supply/demand condition to tighten further.

Copper price April delivery on the SFE surged to a 16 month high at RMB 59180 (+2.3%) after Japan's IP report, the contract closed at RMB 5830, up +1.1%, for the day. In Chile, workers at Codelco's Chuquicamata mine decided to go on strike next month as they are discontent with the company's wage offer. The company offered a +3.8% wage increase and benefits worth 14.5 peso to sign a new 3 year contract but this has been rejected by the workers already.....Read the entire article.

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Tanker Glut Signals 25% Freight Decline as 26 Miles of Ships Meet Demand


A 26 mile long line of idled oil tankers, enough to blockade the English Channel, may signal a 25 percent slump in freight rates next year. The ships will unload 26 percent of the crude and oil products they are storing in six months, adding to vessel supply and pushing rates for supertankers down to an average of $30,000 a day next year, compared with $40,212 now, according to the median estimate in a Bloomberg News survey of 15 analysts, traders and shipbrokers. That’s below what Frontline Ltd., the biggest operator of the ships, says it needs to break even.

Traders booked a record number of ships for storage this year, seeking to profit from longer dated energy futures trading at a premium to contracts for immediate delivery, according to SSY Consultancy & Research Ltd., a unit of the world’s second largest shipbroker. Ships taken out of that trade would return to compete for cargoes just as deliveries from shipyards’ largest ever order book swell the global fleet.

“The tanker market has been defying gravity,” said Martin Stopford, a London based director at Clarkson Plc, the world’s largest shipbroker. Stopford has covered shipping since 1971. More than half of the ships are in European waters, with the rest spread out across Asia, the U.S. and West Africa. Lined up end to end, they would stretch for about 26 miles.....Read the entire article.

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Crude Oil Bulls Maintain The "Holiday Advantage"


Crude oil was higher overnight as it extends last week's rally. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term. If February extends this rally, the reaction high crossing at 80.40 is the next upside target. Closes below the 10 day moving average crossing at 74.85 are needed to confirm that a short term top has been posted.

Monday's pivot point, our line in the sand is 77.50

First resistance is the overnight high crossing at 78.68
Second resistance is the reaction high crossing at 80.40

First support is the 20 day moving average crossing at 75.39
Second support is the 10 day moving average crossing at 74.85
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Natural gas was higher overnight as it consolidates some of last Thursday's decline. Stochastics and the RSI are overbought but are neutral to bullish signaling that sideways to higher prices are possible near term.

If February extends this month's rally, the 87% retracement level of the October-December decline crossing at 6.077 is the next upside target. Closes below the 20 day moving average crossing at 5.322 would confirm that a short term top has been posted.

Natural gas pivot point for Monday is 5.723

First resistance is last Thursday's high crossing at 5.984
Second resistance is the 87% retracement level of the October-December decline crossing at 6.077

First support is the 10 day moving average crossing at 5.704
Second support is the 20 day moving average crossing at 5.322

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The U.S. Dollar 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.

Closes below the 20 day moving average crossing at 76.90 would confirm that a short term top has been posted. If March extends this month's rally, the 38% retracement level of the 2008-2009 decline crossing at 79.72 is the next upside target.

First resistance is last Tuesday's high crossing at 78.77
Second resistance is the 38% retracement level of the 2008-2009 decline crossing at 79.72

First support is the 10 day moving average crossing at 77.90
Second support is the 20 day moving average crossing at 76.90

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Crude Oil and Natural Gas Technical Outlook For Monday Morning


Nymex Crude Oil (CL)

Crude oil's rise from 68.59 extended further to as high as 78.68 so far. The strong break of 61.8% retracement of 82.0 to 68.58 at 76.87 suggests that choppy fall from 82.0 has completed. Intraday bias remains on the upside and further rise could be seen to to retest 82.0. On the downside, below 76.29 minor support will turn intraday bias neutral first. But another rise is now in favor as long as 71.21 support holds.

In the bigger picture, the strong rebound from put crude oil back above 55 days EMA and dampens the bearish view that it has topped out at 33.2. We'll stay neutral for the moment with focus on 82.0 resistance. Break there will indicate that whole medium term rise from 33.2 is still in progress. Nevertheless, focus will remain on reversal signal as we'd expect such rise to conclude inside 76.77/90.24 fibo resistance zone.....Nymex Crude Oil Continuous Contract 4 Hours Chart.

Nymex Natural Gas (NG)

At this point, natural gas is still limited by 5.929 resitance and consolidation from there is possibly still in progress. Another fall might be seen to 38.2% retracement of 4.157 to 5.929 at 5.25. But downside is expected to be contained well above 4.837 support (61.8% retracement of 4.157 to 5.929 at 4.834) and bring rally resumption. Break of 5.929 will target 38.2% retracement of 13.694 to 2.409 at 6.72 next.

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 and might have completed at 2.409 already. Rise from 2.409 should not be completed yet and we would continue to anticipate an upside breakout of the recent range of 4.157/5.138 eventually. Above 5.318 will target 38.2% retracement of 13.694 to 2.409 at 6.72 and beyond. Nevertheless, break of 4.432 support will dampen this bullish case and turn outlook mixed again.....Nymex Natural Gas Continuous Contract 4 Hours Chart.

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Sunday, December 27, 2009

Holiday Gold, Oil and Index Trend Trading

Another holiday trading extravaganza!!!

Last week the market fell into its regular holiday tradition of light volume, as institutions and big traders enjoyed the holidays thus allowing prices to drift higher. We still have one more week of light trading volume before this year and holiday season is officially over.

Trading during low volume times is regularly misinterpreted. Many traders figure they should not be trading this time of the year but from my experience, the last two weeks of the year are amazing for short term swing plays or day trading. The market seems to be much more predictable when the large program traders are not involved.

Also the more speculative plays (small and mid cap stocks) always seem to out perform as buyers bid the prices higher into the light selling volume. This is most likely why we are seeing the NASDAQ and Russell 2000 indexes making some nice gains of late.

Take a look at the charts…

Broad Market & NASDAQ Low Volume Rally



GLD ETF Trading – Daily Chart
Gold prices broke down as expected in early December and are now nearing a possible bottom. The past 3 weeks have provided some very exciting day trades shorting spot gold prices. In the next few weeks I will be starting to provide more spot gold charts and intraday price action for all the international traders and futures traders 

I did not provide the chart of silver as it trades very similar to gold. When the time comes I will provide detailed analysis for entry and exit points for members.



Crude Oil USO Trend Trading
USO fund had a very nice pullback in early December and I pointed out a spec play at $35.50 with targets set at $37, $38 and $40. So far the first two profit taking targets have been reached.

Sorry for all the lines on the chart but sometimes it’s the only way to remember where all the crucial levels are for trading pivot points.



Natural Gas UNG Trend Trading
Natural gas trades like a bucking bronco. It’s a tough ride if you do not understand market psychology and apply strict money management to your positions.

Last weeks price action closed with a bearish candle after testing resistance twice. We could get a short trade this week depending on what happens from here. Let’s keep our eyes open for a low risk setup.



Market Trends Trading Conclusion
This year has been fantastic for making money, but next year will most likely be much more difficult if we see the market top and head south or trend sideways. The market topping is not an event; rather a process and trend following systems will start having more losing trades than winners as the market momentum shifts from up, to sideways then down.

Don’t get me wrong, I am not saying I think its going to roll over and head south, cause quite frankly no one knows what its going to do from this point forward. This is the reason we are in cash and patiently awaiting new low risk opportunities to place our money. The joy of trading with technical analysis is that you don’t care which direction the markets go because the analysis, if done correctly, allows you to profit in all market conditions using different trading strategies.

The board market, in my opinion, is way overbought due to the holiday rally. But we must remember there is another low volume week as we approach New Years and this could extend the rally more. Smaller trading positions should be used until we enter the New Year and volume steps back into the market.

Gold and silver are in a short term down trend and trading near a resistance level. We could see prices drop quickly or rally from here. So we are letting things unfold before making a commitment.

Oil continues to move higher and last weeks weakening US dollar helped give oil a boost.

Natural gas is trading at resistance and looks ready to head back down. The daily and 30 minute chart did not setup a signal to short Natural Gas, but it was very close.

As usual, I will update on the market and provide daily updates and trades to members.

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Dollar Gains on Speculation U.S. Companies Bringing Back Funds


The dollar gained versus the euro and yen on speculation U.S. companies are bringing back earnings on overseas assets before the end of the year. The greenback strengthened against 13 of its 16 major counterparts on prospects U.S. reports tomorrow will show the world’s largest economy is recovering, backing the case for the Federal Reserve to withdraw emergency stimulus measures. The yen fell for the first time in four days versus the dollar after Japanese Prime Minister Yukio Hatoyama unveiled a record budget of 92.3 trillion yen ($1 trillion).

“There seems to be last minute repatriation by U.S. firms before year end,” said Yuji Saito, head of the foreign exchange group in Tokyo at Societe Generale SA. “This is helping to boost the dollar.” The dollar rose to $1.4372 per euro as of 8:30 a.m. in Tokyo from $1.4411 in New York on Dec. 25. The U.S. currency advanced to 91.55 yen from 91.11 yen. The euro traded at 131.57 yen from 131.64 yen.....Read the entire article.

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Thursday, December 24, 2009

New video: The Natural Gas Trade

Dan Dicker, expert trader, and Chris Jarvis, president and founder of Caprock Risk Management, break down their bullish stance on natural gas and how to play this sector.



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Natural Gas Falls After Stockpiles Decline Less Than Expected


Natural gas futures fell in New York after the U.S. Energy Department released its weekly stockpile report that showed inventories declining less than expected. Natural gas in storage fell 166 billion cubic feet last week to 3.4 trillion cubic feet. Analysts expected a drop of 172 billion cubic feet, according to the median of 21 estimates compiled by Bloomberg. Natural gas for January delivery fell 10.7 cents, or 1.8 percent, to $5.714 per million British thermal units at 10:31 a.m. on the New York Mercantile Exchange. The futures were trading at $5.907 before the report was released at 10:30 a.m.

Gas stockpiles reached a record 3.837 trillion cubic feet in the week ended Nov. 27, according to the department. Inventory declines have averaged about 2 trillion cubic feet in each of the past three winters. A similar drop this season would leave supplies at about 1.8 trillion cubic feet in April, or about 300 billion higher than average for that time of year.....Rad the entire article.

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Crude Oil Bulls Maintain The Advantage Into Short U.S. Session


Crude oil was higher overnight as it extends Tuesday's rally above the 20 day moving average. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term.

If February extends this week's rally, the reaction high crossing at 80.40 is the next upside target. Closes below the 10 day moving average crossing at 74.11 are needed to confirm that a short term top has been posted.

Thursday's pivot point, our line in the sand is 75.97

First resistance is the overnight high crossing at 77.48
Second resistance is the reaction high crossing at 80.40

First support is the 20 day moving average crossing at 75.29
Second support is the 10 day moving average crossing at 74.11

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Natural gas was higher overnight as it extends this week's rally. Stochastics and the RSI are overbought but are neutral to bullish signaling that sideways to higher prices are possible near term.

If February extends this month's rally, the 87% retracement level of the October-December decline crossing at 6.077 is the next upside target. Closes below the 20 day moving average crossing at 5.304 would confirm that a short term top has been posted.

Thursday's pivot point for natural gas is 5.759

First resistance is Monday's high crossing at 5.979
Second resistance is the 87% retracement level of the October-December decline crossing at 6.077

First support is the 10 day moving average crossing at 5.665
Second support is the 20 day moving average crossing at 5.304

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The U.S. Dollar 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.

Closes below the 20 day moving average crossing at 76.76 would confirm that a short term top has been posted. If March extends this month's rally, the 38% retracement level of the 2008-2009 decline crossing at 79.72 is the next upside target.

First resistance is Tuesday's high crossing at 78.77
Second resistance is the 38% retracement level of the 2008-2009 decline crossing at 79.72

First support is the 10 day moving average crossing at 77.78
Second support is the 20 day moving average crossing at 76.76

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Crude Stays Strong Ahead of Holiday But Yet to Confirm Correction is Over


Despite thin trading ahead of long holiday, crude oil price's near term outlook remains strong. Currently trading at 77.2, the February contract is hovering around the highest level in 3 weeks. After plummeting to as low as 68.59 on December 14, the black gold has rebounded steadily as inventory levels from developed economies declined, showing signs of demand recovery. However, we are yet to confirm if crude oil has resumed the rise from 33.2 (January 2009) until price can trade sustainably above 80. On monthly basis, December will be a volatile month but actual gain or loss will be minimal.

Natural gas soars for the third consecutive day and has gained +1.4% so far this week. The market sentiment has turned after gas inventory dropped in the past 2 weeks. Later today, the US Energy Department will probably report that gas storage declined -171 bcf to 3395 bcf in the week ended December 18.....Read the entire article.

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Wednesday, December 23, 2009

10 Days of Indexes and Commodities

It’s been a great year as we head into the final few trading sessions. The past several weeks the indexes have not done much of anything which is why we are now in cash.

I feel as though the market is about to change direction abruptly in the coming days or weeks. I feel this way for several reasons:

1. NYSE, Dow Jones, S&P500 are all drifting higher into resistance levels on the 10 day, 60 minute charts. Light volume tends to favor higher price hence the reason for the holiday rally.
2. Broad market momentum waves are topping
3. These same indexes are trading at resistance levels from early 2008
4. Money flow is indicating large institutions have been big sellers over the past 3 weeks.
5. US economy I think is worse than most want to think

So take a look at these 10 day charts which clearly show resistance and support trend lines. Each, if broken will lead to a sharp decline. I used ETF’s as substitutes for the indexes.

Dow Jones – DIA – Top Chart
SPY – S&P500 – Middle Chart
NYSE – Bottom Chart


Stocks have started to decouple for the US dollar in recent days so I am not focusing much on what affect the dollar will have on the above indexes.

That being said, the US dollar (UUP etf fund) is at a pivotal point. It’s either going to bounce off the trend line support level (blue line) and send gold back down to test the previous low, or breakdown through the support trend line. A falling dollar will give gold some power to muscle its way back up to the next short term support level.


Yesterday (Tuesday Dec 22nd) we said gold stocks and silver prices would move higher. I consider gold stocks and silver my leading indicators for the price of gold. Today (Wednesday Dec 23rd) gold stocks and silver shot higher – out performing gold by 7:1 which is very bullish for gold.

Crude oil had a large rally today sending the USO oil fund surging 3.5%, confirming a bounce off our support level 2 weeks ago. It could be warming up for another rally.

Natural gas opened lower but put in a strong session as it trended up all day. This also looks very strong and if prices breakout and follow through next week natural gas could be making a real rally for once.

This is a short trading week with Thursday only a half trading session and Friday being closed for Christmas/Holidays. We will not have any low risk setups this week and because we are sitting in cash, let’s take this time to enjoy our family, friends and pets 

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Where is Crude Oil Headed on Thursday?

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




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Crude Oil Bulls Gain Fresh Near Term Momentum

Crude oil closed up $2.10 at $76.50 a barrel today. Prices closed nearer the session high and hit a fresh two week high today. Crude was supported by a weaker U.S. dollar and firmer U.S. stock index prices today. Bulls today gained fresh upside near term technical momentum.

Natural gas closed up 11.7 cents at $5.889 today. Prices closed near the session high and closed at a fresh two month high close today. Bulls have gained upside near term technical momentum recently. Prices are in a steep three week old uptrend on the daily bar chart.

Heating oil closed up 570 points at $2.0270 today. Prices closed nearer the session high today and scored a fresh two week high. Bulls gained some fresh upside near term technical momentum today. The bulls' next upside price objective is closing prices above solid technical resistance at $2.1000.

Unleaded gasoline (RBOB) closed up 644 points at $1.9770 today. Prices closed nearer the session high today and hit a fresh two week high. Bulls gained some fresh upside technical momentum today. The next upside price objective for the bulls is closing prices above solid technical resistance at $2.0500.

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Oil Inventories Saw Huge Declines Across the Board


The inventory report by the US Energy Department surprised the market as crude inventory fell -4.84 mmb to 327.5 mmb in the week ended December 18. The draw was significantly more than market expectation and represented the third consecutive decline. Although stockpile at Cushing, Oklahoma rose +0.57 mmb, the pace of increase has moderated and should narrow the discount of WTI crude to Brent crude.

Distillate stockpile declined -3.03 mmb, following a -2.95 mmb draw in the prior week. This is the second consecutive weekly fall. The market anticipates further draw in coming weeks as the weather gets abnormally cold. Gasoline inventory dipped -0.88 mmb to 216.3 mmb, offsetting the build in the previous week.

Rally in crude oil price accelerated after the report. The benchmark contract surged to 76.53, the highest in 3 weeks. For oil products, heating oil price jumped to 2.038 while RBOB gasoline also climbed to 1.965.....Here is the charts!

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Crude Oil Bulls Keep The Momentum as They Look to Wednesday Inventory


Crude oil was higher overnight as it consolidates above the 10 day moving average. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term.

Closes above the 20 day moving average crossing at 75.30 are needed to confirm that a short term low has been posted. If January resumes the decline off October's high, the 87% retracement level of this fall's rally crossing at 68.86 is the next downside target.

First resistance is the 20 day moving average crossing at 75.30
Second resistance is last Friday's high crossing at 75.65

First support is the 10 day moving average crossing at 73.44
Second support is last week's low crossing at 70.83

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Natural gas was slightly lower overnight as it consolidates some of Tuesday'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.

Closes below the 20 day moving average crossing at 5.196 would confirm that a short term top has been posted. If January extends this month's rally, the 87% retracement level of the October-December decline crossing at 6.036 is the next upside target.

First resistance is Monday's high crossing at 5.929
Second resistance is the 87% retracement level of the October-December decline crossing at 6.036

First support is the 10 day moving average crossing at 5.541
Second support is the 20 day moving average crossing at 5.196

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The U.S. Dollar was slightly lower due to profit taking overnight as it consolidates some of this month's rally. Stochastics and the RSI are overbought but remain neutral signaling that additional gains are possible near term.

If March extends this month's rally, the 38% retracement level of the 2008-2009 decline crossing at 79.72 is the next upside target. Closes below the 20 day moving average crossing at 76.64 would confirm that a short term top has been posted.

First resistance is Tuesday's high crossing at 78.77
Second resistance is the 38% retracement level of the 2008-2009 decline crossing at 79.72

First support is the 10 day moving average crossing at 77.66
Second support is the 20 day moving average crossing at 76.64

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