Friday, December 17, 2010

European Summits and IEA Reports Not Enough to Fool Commodity Traders

Commodity traders, especially crude oil traders, good be the smartest and least naive people on the planet. It sure didn't take long for them to realize that the IEA could possibly be turning itself into the new OPEC. Remember the old days when OPEC could issue a statement and send markets reeling. Those days appear to be here for the IEA as traders recognized the over "exaggeration" of international demand issued by the IEA this week.

Enbridge pipeline shut down, end of year tax strategies, European Summits, just to name a few, were not enough to take traders eyes off the world oil glut and the real trouble looming in the Euro. Giving the U.S. dollar new strength chasing investors out of the weak dollar/commodities trade.

Commodity traders also showed a lack of confidence in the news coming out of the Brussels Summit. Most traders think their statements just don't offer enough details to give investors any real promise of a concrete plan to shore up the Euro as the down grades just keep coming.

End of week trading is here and it always give an insight into what traders can stomach holding over the weekend. And I am thinking that is not a lot. Here is your trading numbers for Friday......

Crude oil was lower overnight and trading below the 10 day moving average crossing at 88.32. Stochastics and the RSI are bearish hinting that a short term top might be in or is near. Closes below the 20 day moving average crossing at 86.47 are needed to confirm that a short term top has been posted. If January renews the rally off November's low, May's high crossing at 93.29 is the next upside target. First resistance is last Tuesday's high crossing at 90.76. Second resistance is May's high crossing at 93.29. First support is Wednesday's low crossing at 86.83. Second support is the 20 day moving average crossing at 86.47. Crude oil pivot point for Friday morning is 87.99.

Natural gas was lower overnight as it extends the decline off last week's high. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term. If January extends the decline off last week's high, November's low crossing at 3.853 is the next downside target. Closes above the 20 day moving average crossing at 4.329 would confirm that a short term low has been posted. First resistance is the 20 day moving average crossing at 4.329. Second resistance is last Thursday's high crossing at 4.637. First support is the overnight low crossing at 3.987. Second support is November's low crossing at 3.853. Natural gas pivot point for Friday morning is 4.100.

Gold was lower overnight as it extends Thursday's decline below the reaction low crossing at 1372.10 confirming that a short term top has been posted. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term. If March extends this month's decline, the reaction low crossing at 1352.00 is the next downside target. Closes above the 10 day moving average crossing at 1391.60 would confirm that a short term top has been posted. First resistance is the 10 day moving average crossing at 1391.60. Second resistance is last Tuesday's high crossing at 1432.50. First support is Thursday's low crossing at 1361.60. Second support is the reaction low crossing at 1352.00. Gold pivot point for Friday morning is 1373.30.

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