Monday, May 31, 2010

Crude Oil Rises on Outlook U.S. Economic Recovery Will Boost Fuel Demand

Crude oil rose above $75 a barrel in New York on speculation that economic growth in the U.S., the world’s biggest energy consumer, will sustain a global recovery in fuel demand. Oil climbed after Federal Reserve Bank of Chicago President Charles Evans said yesterday the U.S. economic recovery will continue amid uncertainties prompted by Europe’s debt crisis. About 28 million people were expected to be on road trips in the U.S. during the three-day Memorial Day weekend, a jump of 5.8 percent from a year earlier and the first increase since 2005, according to AAA, the country’s biggest motoring organization.

“There is more of an optimistic feel toward the economy starting to creep in, particularly in the U.S.,” said Jonathan Barratt, managing director at Commodity Broking Services Pty in Sydney. “People are starting to buy up, or looking to buy, because some of these commodities are cheap. Summer drive time is always a key.”

Crude oil for July delivery gained as much as $1.20, or 1.6 percent, to $75.17 a barrel, in electronic trading on the New York Mercantile Exchange. It was at $74.44 at 11:29 a.m. Sydney time. The contract declined 58 cents, or 0.8 percent, to settle at $73.97 on May 28. Futures dropped 13.6 percent in May, the biggest monthly drop since December 2008. Floor trading was closed Monday for the Memorial Day holiday in the U.S. and electronic trades will be booked with today’s for settlement purposes.....Read the entire article.

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Sunday, May 30, 2010

Trend Trading Gold, Silver, Crude Oil and the SP500

Last week looked and felt like a pivotal week for both stocks and commodities. The past two weeks have had investors and traders in a panic as they try to find safe investments for their money. After watching and reviewing the panic selling in the market it looks as though the majority decided to sell everything and be in cash for the time being. This is bullish for the stock market.

I will admit it has been tougher to trade recently because of increased risk levels due to the large 2-4% sell offs and rallies happening within minutes… While this is amazing for disciplined and experienced traders who are able to pull the trigger getting in and out with quick profit in the matter of minutes, this same price action can blow up trading accounts of those who do not have a trading strategy, money management and the discipline to take profits and cut losses very quickly. The speed of the rallies and sell offs is the matter of being up or down thousand of dollars in the matter of 5-10 minutes… That is one of the reasons I have stepped back from being aggressive and into more of an observation mode playing with small amounts of money and focusing on the larger trends at.

My #1 goal is to make subscribers money with the least amount of risk and watching the market swing 2-4% in minutes makes it extremely difficult to get everyone in and out positions with a profit before the market changes directions. As much as I love trading, some times the best position is to have small ones or be in cash.

GLD – Gold ETF Trading

Here is my weekly updated chart of gold as it works its way through the correction from last year. The daily chart looks to be forming a larger Cup & Handle pattern which is extremely bullish. If this pattern does a text book move then we could see GLD reach $140 and spot gold would reach the $1400 area.

That being said this pattern still has to complete the handle portion which could easily last another 4 weeks, so I am not in a panic to add more to our position.


SLV – Silver ETF Trading

Silver is in much of the same situation. Because of the added volatility in silver the charts do not look quite the same but they are similar in many ways… Silver is used a lot for industrial purposes and because the economy which is very weak still (though it is getting better) we are not seeing silver demand rise much. If silver can break this large resistance level then we could see silver surge to $25 (25%) this year.


USO – Oil Fund Trading

USO (Oil) has held up really well in the past 12 months but the recent sell off has seriously damaged the bullish outlook I had not long ago. While it is oversold and looks to have started a bounce last week the chart is pointing to lower prices over the longer term… This USO fund does have contago which makes this fund under perform the actual price of oil. The current prices of oil are still trading at a key support level and could post nice bounce if not trigger a new rally. The problem with following some ETF’s which have contago is that you do not see the real price action of the commodity. But that is were I come in as I track the underlying commodity and relate it to ETFs for you.


SPY – SP500 ETF Trading

The Stock Market (SP500) sure has been a roller coaster. The chart below shows you what happened in January for the last correction and where we stand currently in comparison. If a setup is obvious in the financial market there is a very high chance it will not work out as planned and by knowing this it allows us to be cautious and take profits at key short term support and resistance levels.


Trend Trading Conclusion:

In short, I feel gold and silver will drift around to digest the recent move up and to form the handle portion. Oil looks to have put in a short term bottom and if we get a small pullback in the coming days to test the intraday chart breakout level and touch the support trend line we could look to take a position.

We tend to see the most price appreciation during the final stages of a trend and we could have seen that on the US Dollar over the past 6 weeks. It looks as though the dollar could have put in a double top. If the dollar rolls over it would help boost precious metals, oil and stocks… But we will not know it’s a top until there is a clear trend reversal which in any case will be weeks before that type of price action can unfold.

As for the SP500, we have seen the same level of selling as we did in Feb-March 2009. High volume panic selling has ruled the market since late April. There are equal arguments for saying the market has bottomed with all the panic selling and that we should start another large rally lasting 8-12 months or one could argue this is capitulation volume signaling massive distribution of shares and now every rally/bounce will be sold… Personally I am torn between the two… but lean more towards higher prices with a multi month grind up at slow rate…

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Natural Gas Weekly Technical Outlook


Natural gas's rebound last week suggests that consolidation from 3.81 is still in progress. Further rise might be seen initially this week but we'd expect strong resistance at 4.494 to limit up side. Below 4.154 minor support will indicate that recovery from 3.986 is completed and will flip intraday bias back to the downside for 3.81/884 support zone. Decisive break there will confirm down trend resumption and should target 3.0 psychological level next.

In the bigger picture, medium term rebound from 2.409 has completed at 6.108 and the three wave corrective structure of the rebound argues that it's merely a correction, or part of the consolidation in the larger down trend. Current fall from 6.108 might extend further for a retest on 2.409 low next after sustaining below 61.8% retracement of 2.409 to 6.108 at 3.822. However, note that decisive break of 38.2% retracement of 5.68 to 3.81 at 4.524 will argue that whole fall from 6.108 has completed and will turn outlook bullish for a possible test on 6.108 high.

In the longer term picture, while the bounce from 2.409 was strong, it's been limited below 55 months EMA (now at 6.047) and reversed. The failure to sustain above 55 weeks EMA (now at 4.679) also argue that 2.409 might not be the bottom yet. We'll stay bearish as long as this year's high of 6.108 holds and favor a new low below 2.409 going forward.....Nymex Natural Gas Continuous Contract 4 Hours Chart.

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Saturday, May 29, 2010

Here Are 20 Signs That China Is Cornering The Global Oil Market

In response to the BP's Deepwater Horizon disaster, President Obama has launched a 6 month moratorium on new deepwater exploration contracts and other oil drilling restrictions.

But China isn't stopping. Just this month, state-owned Chinese companies have signed contracts worth over $50 billion in Canada, Brazil, Argentina, Iraq, Venezuela, and Nigeria.

Most deal include an export clause, locking down energy supplies for the growing Chinese economy. If America's demand ever increases, these deals would present a serious problem.

And Beijing has no qualms about offshore drilling.

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Crude Oil Weekly Technical Outlook

Crude oil's rebound extended further to as high as 75.72 last week. Though, there is no change in the view that such rebound is a correction in the larger decline. While some more rise might be seen, upside should be limited by 61.8% retracement of 87.15 to 64.23 at 78.39 and bring fall resumption. Below 71.23 minor support will indicate that rebound from 64.23 is finished and will flip intraday bias back to the downside for retesting this low first.

In the bigger picture, prior break of 68.59/69.50 support zone affirms our view that whole medium term rebound from 33.2 has completed at 87.15 already, just ahead of 50% retracement of 147.27 to 33.2 at 90.24. Further decline should be seen to 50% retracement of 33.2 to 87.15 at 60.18 at least. Also, as rebound from 33.2 is viewed as as a correction to the whole correction that started at 2008 at 147.27, we'd anticipate a break of 33.2 low in the longer term. On the upside, break of resistance at 78 level is needed to be indicate that fall from 87.15 is completed. Otherwise, we'll stay bearish.

In the long term picture, current development suggests that rebound from 33.2 is finished at 87.15, inside 76.77/90.24 fibo resistance zone as expected. Our view is that fall fro 87.15 would develop into the third falling leg of the whole correction from 147.27 and hence, we'd anticipate an eventual break of 33.2 low in the long term as such correction extends.....Nymex Crude Oil Continuous Contract 4 Hours Chart.

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Phil Flynn: The Manic Month Of May

Sell in May and go away? That would have worked in the petroleum markets so far. Of course if you looked at a chart of the markets you might be sick to see how much money you may have given back. The bulls started the lusty month of May lusting for new highs which they got on light holiday volume as the lead month oil contract broke out to a high of approximately 8715 on May, 3, 2010. Those lofty highs were only fleeting as Greece debt fears engulfed the global market place crushing the optimism of April into the fear factor of May as oil came crashing down to what was a flash crash low of approximately 6424 on that fateful May 20,2010.This manic month of May has been gripped by fear and loathing as to the state of euro zone debt.

The market feared that the PIIGS (Portugal, Ireland, Italy, Greece and Spain) would bring down the global economy. We even had a mini “flash crash” as protestors surrounded the Greek Parliament. Oil fortunes both good and bad have been dictated by sovereign debt fears but also because of a back drop of a massive over supply.Yet oil has staged an impressive comeback. Rumors that the Chinese were going to reduce their holdings of European debt and euro currencies were denied and that seemed to ease the markets' concern. The denial sparked a massive across the board commodity and global stock rally. We also had end of the month short covering as many traders headed....Read the entire article.

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Where is Crude Oil and Gold Headed Next Week?

CNBC's Sharon Epperson discusses the day's activity in the commodities markets, and looks ahead to where oil and gas are likely headed next week.




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Friday, May 28, 2010

Crude Oil, Natural Gas, Gold and Dollar Commentary For Friday Evening

Crude oil closed lower due to profit taking on Friday as it consolidated some of Thursday's rally. The low range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are turning bullish signaling that sideways to higher prices are possible near term. Closes above the 20 day moving average crossing at 76.51 are needed to confirm that a short term low has been posted. If July renews this month's decline, last July's low crossing at 66.11 is the next downside target. First resistance is today's high crossing at 75.72. Second resistance is the 20 day moving average crossing at 76.51. First support is the 10 day moving average crossing at 71.83. Second support is Tuesday's low crossing at 67.15.

Natural gas closed higher on Friday as it extended Thursday's breakout above the 10 day moving average crossing at 4.247. The high range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI have turned bullish signaling that sideways to higher prices are possible near term. If July extends this week's rally, this month's high crossing at 4.587 is the next upside target. If July renews the decline off this month's high, this month's low crossing at 3.971 is the next downside target. First resistance is today's high crossing at 4.399. Second resistance is this month's high crossing at 4.587. First support is Tuesday's low crossing at 4.036. Second support is this month's low crossing at 3.971.

The U.S. Dollar closed higher due to short covering on Friday and the high range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are diverging but are neutral to bullish signaling that sideways to higher prices are possible near term. If June renews this year's rally, the 87% retracement level of 2009's decline on the weekly continuation chart crossing at 87.79 is the next upside target. Closes below the 20 day moving average crossing at 85.51 are needed to confirm that a short term top has been posted. First resistance is last Wednesday's high crossing at 87.63. Second resistance is weekly resistance crossing at 87.79. First support is the 20 day moving average crossing at 85.51. Second support is last Friday's low crossing at 85.33.

Gold closed slightly higher on Friday as it consolidates above the 10 day moving average crossing at 1202.90. The high range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI have turned bullish signaling that sideways to higher prices are possible near term. If June extends this week's rally, this month's high crossing at 1249.70 is the next upside target. First resistance is Thursday's high crossing at 1218.50. Second resistance is this month's high crossing at 1249.70. First support is last Friday's low crossing at 1166.00. Second support is the reaction low crossing at 1156.20.

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Hate Politicians, Not Big Oil

John Hofmeister, author of "Why We Hate The Oil Companies", says America's politicians do more to create energy problems than solve them.



As president of Shell Oil, John Hofmeister was known for being a straight shooter, willing to challenge his peers throughout the industry. Now, he’s a man on a mission, the founder of Citizens for Affordable Energy, crisscrossing the country in a grassroots campaign to change the way we look at energy in this country. While pundits proffer false new promises of green energy independence, or flatly deny the existence of a problem, Hofmeister offers an insider’s view of what’s behind the energy companies’ posturing, and how politicians use energy misinformation, disinformation, and lack of information to get and stay elected. He tackles the energy controversy head-on, without regard for political correctness. He also provides a new framework for solving difficult problems, identifying solutions that will lead to a future of comfortable lifestyles, affordable and clean energy, environmental protection, and sustained economic competitiveness.


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What Hurricane Season Forecast Means for Natural Gas ETFs

The numbers are out: an active storm season is predicted for the Atlantic, and natural gas related ETFs are already gearing up and moving on the news. More storms than “normal”, about 16, are anticipated to hit the Atlantic coast of the United States this season. Of these, eight are expected to become hurricanes and about four of them are going to be intense, according to the Tropical Storm Risk.

Alex Morales and Brian K. Sullivan for Bloomerg BusinessWeek reports that the forecast joins a growing number of predictions that the 2010 Atlantic hurricane season, which starts June 1, will be among the most active on record. As the number of hurricanes rises, so do the chances of one striking the oil rich Gulf of Mexico or Florida’s crop areas.

The Gulf is home to about 30% of U.S. oil and 12 % of U.S. natural gas production, the U.S. Energy Department says. It also has seven of the 10 busiest U.S. ports, according to the Army Corps of Engineers. Meanwhile, BP is still trying to cap a leaking offshore oil well that has created a devastating slick that is washing up in Louisiana. Attempts to stop the oil will be hampered if and when a tropical storm or hurricane passes through the Gulf of Mexico.....Let's go to the charts!

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Crude Oil Technical Outlook For Friday Morning

Crude oil rises further to as high as 75.72 so far today. Intraday bias remains on the upside and rebound from 64.24 is in favor to continue to 61.8% retracement of 87.15 to 64.24 at 78.39. On the downside, though, break of 71.23 minor support will indicate that such recovery is completed and will flip bias back to the downside for retesting 64.24 low.

In the bigger picture, prior break of 68.59/69.50 support zone affirms our view that whole medium term rebound from 33.2 has completed at 87.15 already, just ahead of 50% retracement of 147.27 to 33.2 at 90.24. Further decline should be seen to 50% retracement of 33.2 to 87.15 at 60.18 at least. Also, as rebound from 33.2 is viewed as as a correction to the whole correction that started at 2008 at 147.27, we'd anticipate a break of 33.2 low in the longer term. On the upside, decisive break of resistance at 78 level is needed to indicate that fall from 87.15 is completed. Otherwise, we'll stay bearish......Nymex Crude Oil Continuous Contract 4 Hours Chart.

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Thursday, May 27, 2010

Phil Flynn: The Audacity Of Hope

If the economy bounces back and the Chinese hang onto their Euros, can oil bulls find love and happiness in this world of economic turmoil? The audacity of hope once again has crept back into the oil market. A string of strong macroeconomic numbers that blew away market expectations, as well as some strong oil demand numbers, has the marketplace trying to forget all about the fears of a global economic meltdown that has engulfed the market. For today all the subplots have been put aside for the moment as the market now wants to bask in the economic silver linings of the moment.

You know you are going to have a good day when you get a report that shows refinancings are rising and housing sales of new homes surged 14.8%. Add to that a strong durable goods number that gained 2.9 percent in April, the fourth boost in the last five months, and somehow the world is not so scary. Oh sure the Europeans have problems as evidenced by rumors that the Chinese were looking to divest themselves from Euros and it seems that the world's largest oil consumer, the USA, might lead the oil market out of its recent darkness.

That mood was further cemented when the Energy Information Agency released a report that showed some stellar oil demand numbers. Despite the fact that the EIA reported that US commercial crude oil inventories increased by 2.4 million barrels from the previous week, they also reported that the string of increases at the key delivery pinpoint Cushing, Oklahoma actually fell from its record high. Along with that the EIA reported demand numbers that....Read the entire article.

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Dennis Gartman: Is Crude Oil the Only Game in Town?

Gold and Euro is basically little changed for the month, says Dennis Gartman, The Gartman Letter.




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Crude Oil, Natural Gas, Gold and Dollar Commentary For Thursday Evening

Crude oil closed sharply higher on Thursday as European Debt fears ease. Today's rally led to a close above the 10 day moving average crossing at 71.96 signaling that a short term low has likely been posted. The high range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are turning bullish signaling that sideways to higher prices are possible near term. Closes above the 20 day moving average crossing at 77.22 are needed to confirm that a short term low has been posted. If July extends this month's decline, last July's low crossing at 66.11 is the next downside target. First resistance is today's high crossing at 74.68. Second resistance is the 20 day moving average crossing at 77.22. First support is Tuesday's low crossing at 67.15. Second support is last July's low crossing at 66.11.

Natural gas closed higher on Thursday and above the 10 day moving average crossing at 4.254 confirming that a short term low has been posted. The high range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are turning bullish signaling that sideways to higher prices are possible near term. If July extends this week's rally, this month's high crossing at 4.587 is the next upside target. If July renews the decline off this month's high, this month's low crossing at 3.971 is the next downside target. First resistance is Wednesday's high crossing at 4.315. Second resistance is this month's high crossing at 4.587. First support is Tuesday's low crossing at 4.036. Second support is this month's low crossing at 3.971.

The U.S. Dollar closed lower on Thursday and below the 10 day moving average crossing at 86.44 warning bulls to use caution as a double top might be forming. The low range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI are diverging but are bullish signaling that sideways to higher prices are possible near term. If June renews this year's rally, the 87% retracement level of 2009's decline on the weekly continuation chart crossing at 87.79 is the next upside target. Closes below the 20 day moving average crossing at 85.27 are needed to confirm that a short term top has been posted. First resistance is last Wednesday's high crossing at 87.63. Second resistance is weekly resistance crossing at 87.79. First support is last Friday's low crossing at 85.33. Second support is the 20 day moving average crossing at 85.27.

Gold closed lower due to profit taking on Thursday as it consolidates some of this week's rally but remains above the 10 day moving average crossing at 1204.40. The mid range close sets the stage for a steady opening on Friday. Stochastics and the RSI are turning bullish signaling that sideways to higher prices are possible near term. If June extends this week's rally, this month's high crossing at 1249.70 is the next upside target. First resistance is today's high crossing at 1218.50. Second resistance is this month's high crossing at 1249.70. First support is last Friday's low crossing at 1166.00. Second support is the reaction low crossing at 1156.20.

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Crude Oil Jumps More Than $3 as China Reaffirms Support for the Euro

Crude oil surged more than $3 a barrel as equities and the euro rallied after China affirmed its commitment to investing in Europe. Oil climbed 4.3 percent as China denied as “groundless” a report that it’s reviewing euro holdings and the nation’s sovereign wealth fund said it’s maintaining European assets. The euro gained 1.5 percent against the dollar, boosting the appeal of commodities as an alternative to the U.S. currency. “If China were really looking to offload euro denominated debt, that would put downward pressure on the euro, and the euro/dollar rate has been one of the key factors in oil prices,” said Adam Sieminski, chief energy economist at Deutsche Bank AG in Washington.

Crude oil for July delivery rose $3.04 to settle at $74.55 a barrel on the New York Mercantile Exchange, the biggest one day increase since Sept. 30. Futures have climbed 17 percent in the past year. The euro rose to $1.236 at 3:15 p.m. in New York, compared with $1.2178 yesterday. It was the first increase in the euro in four days. The Standard & Poor’s 500 Index gained 2.8 percent to 1,097.55, and the Dow Jones Industrial Average surged 237.53 points, or 2.4 percent, to 10,211.98. “The big news is U.S. macroeconomic data is still solid,” said Jason Schenker, president of Prestige Economics LLC, an Austin, Texas-based energy consultant. “Growth is the story”....Read the entire article.

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New Video: One Year Later, Reality Sets in for the SP 500

It's been just a little over a year since we had our first major buy signal for the S&P 500 at 888.70 on 5/4/09. Since that time, the S&P 500 has climbed approximately 61.8% from the lows that were seen in early March of '09 and the highs that were seen in October of '07.

We take our "Trade Triangle" technology very seriously and this signal today (5/25) at 1044.50 is our first major sell signal since 7/1/08 at 1,272.00 and should not be ignored.

There are a whole host of problems that are coming due around the world that will have negative consequences for the equity markets. The problems in Greece and Europe are well known and are likely to continue for the balance of the year. This is going to have a negative impact on markets in general.

In our new short video we show you exactly what we think is going to happen to the S&P 500 market and just how you can protect yourself if we are correct. As always our "Trade Triangles" will dictate all market action. At the present time all of our "Trade Triangles" are negative and pointing to the downside. This indicates that a very strong trend is in place and it likely to continue.

Many traders, especially younger traders, are unaware of how bear markets work. Bear markets tend to be demoralizing as they do not have any strong and sustained rallies. They tend to erode as more and more traders become unnerved and throw in the towel.

We invite you to take a look at this new video with no registration and no charge.


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The Gold & Silver Precious Metals Correction

It’s been an exciting week for traders as volatility levels are through the roof and the broad market is moving up and down like a yoyo. You cannot take your eyes off the screen if you have a large amount of money invested as you can quickly find yourself with a large profit or loss in the matter of minutes....

Although we have seen stocks jump around the past few days precious metals have held strong with very little volatility. This is because of the economic fears looming for the US and other countries of possible financial collapse. This fear is helping to boost gold and silver prices because they are seen as the safe haven. Also we are seeing money move in the US dollar because the country is still seen as a leader in many ways helping to boost the US dollar.

Below are a couple charts on Gold and Silver ETF’s showing the end of last years rally and the correction in prices which are now looking to setting up for another leg higher.


Gold Futures Price – 60 Minute Day Trading Chart

Gold has been showing some very bullish price action the past week forming several mini bull flags with confirming volume levels. I think we should see gold pop another $5-10 bucks in the very near future if not continue higher for several days.


SLV – Silver ETF Trading Vehicle – Daily Chart

Silver formed much of the same patterns as gold but with much more volatility. Also silver has yet to break the 2009 high which is surprising but with a large part of silver being use for industrial purposes it does make sense as the economy is not as strong as it was thought to be in 2009. Silver carries much more risk when trading because it has more random moves and increased volatility.


Mid-Week Precious Metals Trading Conclusion:

In short, gold and silver are in an uptrend and looking strong. Both are currently trading at short term resistance levels on the daily chart which has caused them to stop moving up today (Wednesday May 26th) but on an intraday basis they look solid and could break though these resistance levels.

That being said buying way up here adds a lot more risk because a good chunk of the move has already been made and if prices do roll over and start heading back down the next support level is several percentage points away for placing a protective stop with the proper amount of wiggle room.

If Trading Gold, Silver and Index Futures and ETFs interest you, check out Chris Vermeulen's trading services at The Gold and Oil Guy.com



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Crude Oil Technical Outlook For Thursday Morning


Crude oil's rebound from 64.24 extends further today and intraday bias is on the upside for stronger rise, possibly towards 61.8% retracement of 87.15 to 64.24 at 78.39. On the downside, though, break of 67.15 minor support will indicate that such recovery is completed and will flip bias back to the downside for retesting 64.24 low.

In the bigger picture, prior break of 68.59/69.50 support zone affirms our view that whole medium term rebound from 33.2 has completed at 87.15 already, just ahead of 50% retracement of 147.27 to 33.2 at 90.24. Further decline should be seen to 50% retracement of 33.2 to 87.15 at 60.18 at least. Also, as rebound from 33.2 is viewed as as a correction to the whole correction that started at 2008 at 147.27, we'd anticipate a break of 33.2 low in the longer term. On the upside, decisive break of resistance at 78 level is needed to be indicate that fall from 87.15 is completed. Otherwise, we'll stay bearish.....Nymex Crude Oil Continuous Contract 4 Hours Chart.

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Wednesday, May 26, 2010

Crude Oil, Natural Gas and U.S Dollar Commentary For Wednesday Evening

Crude oil closed higher due to short covering on Wednesday as it consolidated some of this month's decline. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term. If July extends this month's decline, last July's low crossing at 66.11 is the next downside target. Closes above the 20 day moving average crossing at 77.86 are needed to confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 72.41. Second resistance is the 20 day moving average crossing at 77.86. First support is Tuesday's low crossing at 67.15. Second support is last July's low crossing at 66.11.

Natural gas closed higher due to short covering on Wednesday as it consolidated some of last week's decline. The low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices are possible near term. If July extends last week's decline, this month's low crossing at 3.971 is the next downside target. Closes above the 10 day moving average crossing at 4.267 would temper the near term bearish outlook. First resistance is the 10 day moving average crossing at 4.267. Second resistance is this month's high crossing at 4.587. First support is Tuesday's low crossing at 4.036. Second support is this month's low crossing at 3.971.

The U.S. Dollar closed higher on Wednesday as it extended this week's rally. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are diverging but turning bullish again signaling that sideways to higher prices are possible near term. If June renews this year's rally, the 87% retracement level of 2009's decline on the weekly continuation chart crossing at 87.79 is the next upside target. Closes below the 20 day moving average crossing at 85.06 are needed to confirm that a short term top has been posted. First resistance is last Wednesday's high crossing at 87.63. Second resistance is weekly resistance crossing at 87.79. First support is last Friday's low crossing at 85.33. Second support is the 20 day moving average crossing at 85.06.

Gold closed higher on Wednesday and above the 10 day moving average crossing at 1206.10 confirming that a short term low has been posted. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are turning neutral to bullish signaling that sideways to higher prices are possible near term. If June extends today's rally, this month's high crossing at 1249.70 is the next upside target. First resistance is today's high crossing at 1216.90. Second resistance is this month's high crossing at 1249.70. First support is last Friday's low crossing at 1166.00. Second support is the reaction low crossing at 1156.20.

New Video: We are Back in the Gold Market!

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MarketClub: We are Back in the Gold Market

From MarketClub's Adam Hewison......

After exiting all long positions at 1217.72 on 5/18, we reinstated long positions seven days later on 5/25 at 1196.57.

As many of you know who watch my videos, we use our weekly "Trade Triangles" for trend direction and our daily "Trade Triangles" for timing entry and exit points. It was those daily "Trade Triangles" that flashed a buy signal on 5/25.

Given the chaotic state of the world and all the cross currents that are running in the banking system, we would not be surprised to see gold once again climb up and challenge the $1,250 level. All of our "Trade Triangles" are green and 100% to the upside. This indicates that a strong trend is once again in place for the gold market.

The video is available for viewing now and there is no charge or registration requirement.

Gold traders are always a very vocal segment of the trading population and so we encourage you to let your voice be heard on our Trader's Blog.

Watch....We are Back in the Gold Market

All the best,
Adam Hewison
President, INO.com
Co-creator, MarketClub



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New Video: The Return of the Greek Drachma ... it's Coming


The reality is, the world is in a whole mess of debt and it's all coming due at the same time.

Make no mistake about it, the situation in Europe is dire. The problems with Greece are well known. The problems in Spain are growing, and the problems in Ireland and Portugal are about to rear their ugly heads.

We are not going to rhapsodize about the problems in Europe, they are well known and are manifesting themselves in the price action of the world markets, however, in this short video on the euro we want to show you how monthly charts and our "Trade Triangles" tell the story and show the trend very clearly. We also show you a simple method that you can use in your everyday trading to estimate how far a move can go.

My hope is that this new video will highlight some of the reasons why we believe we could be seeing some strong opportunities in this market.

Just click here to watch the video and as always it is available for viewing now and there is no charge or registration requirement. Please feel free to leave a comment and let us know what your thoughts are on the video and the future of the Euro.


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Crude Oil Daily Technical Outlook Wednesday Morning

Yesterday's recovery suggests that consolidation from 64.24 is still in progress and intraday bias is turned neutral. While further rise cannot be ruled out, we'd expect strong resistance at 38.2% retracement of 87.15 to 64.24 at 72.99 to limit upside and bring fall resumption finally. Break of 64.24 should target 60 psychological level next, which is close to 50% retracement of 33.2 to 87.15 at 60.18.

In the bigger picture, the break of 68.59/69.50 support zone affirms our view that whole medium term rebound from 33.2 has completed at 87.15 already, just ahead of 50% retracement of 147.27 to 33.2 at 90.24. Further decline should be seen to 50% retracement of 33.2 to 87.15 at 60.18 at least. Also, as rebound from 33.2 is viewed as as a correction to the whole correction that started at 2008 at 147.27, we'd anticipate a break of 33.2 low in the longer term. On the upside, break of resistance at 78 level is needed to be indicate that fall from 87.15 is completed. Otherwise, we'll stay bearish.....Nymex Crude Oil Continuous Contract 4 Hours Chart.

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Oil Rises After Industry Report Shows U.S. Gasoline Supply Drop

Crude oil rose in New York after an industry-funded report showed a drop in U.S. gasoline stockpiles, renewing optimism of increasing fuel demand in the world’s largest crude consumer. Oil pared part of yesterday’s 2.1 percent decline after the American Petroleum Institute said gasoline supplies fell 3.19 million barrels last week. Crude has dropped 20 percent since reaching $87.15 a barrel on May 3, the highest intraday price in more than a year. U.S. equities erased losses in the final minutes of trading, with the Dow Jones Industrial Average closing 0.2 percent lower after plunging 292 points.

“The drop in the gasoline inventories has brought optimism back to the market,” said Serene Lim, an energy and commodity strategist with Australia & New Zealand Banking Group Ltd. “Crude prices have been oversold the past two weeks so that is opening up some buying opportunities.” Crude oil for July delivery rose as much as $1.38, or 2 percent, to $70.13 a barrel in electronic trading on the New York Mercantile Exchange, and traded at $69.27 at 2:03 p.m. Singapore time. Yesterday, the contract fell $1.46 to $68.75 after dropping as much as 4.4 percent.

“A drop in gasoline supplies almost always gives the energy markets reason to trade higher,” said Mike Sander, an investment adviser a Sander Capital Advisors in Seattle. “Oil is also up after the Dow Jones rallied in trading at the end of its session. With such a positive reversal, the price of oil received a boost”....Read the entire article.


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Tuesday, May 25, 2010

Video: Crude Oil Continues to Slide on Economic Worries



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Where is Crude Oil and Gold Headed on Wednesday?

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




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Crude Oil, Natural Gas, Gold and Dollar Commentary For Tuesday Evening

Crude oil closed lower on Tuesday as it extended this month's decline. A short covering rally tempered early losses and the mid range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term. If July extends this month's decline, last July's low crossing at 66.11 is the next downside target. Closes above the 20 day moving average crossing at 78.58 are needed to confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 73.30. Second resistance is the 20 day moving average crossing at 78.58. First support is today's low crossing at 67.15. Second support is last July's low crossing at 66.11.

Natural gas closed higher due to short covering on Tuesday as it consolidated some of last week's decline. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term. If July extends last week's decline, this month's low crossing at 3.971 is the next downside target. Closes above the 10 day moving average crossing at 4.291 would temper the near term bearish outlook. First resistance is the 20 day moving average crossing at 4.229. Second resistance is the 10 day moving average crossing at 4.291. First support is today's low crossing at 4.036. Second support is this month's low crossing at 3.971.

The U.S. Dollar closed higher on Tuesday as it extended Monday's rally. However, profit taking tempered early session gains and the low range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near term. Closes below the 20 day moving average crossing at 84.83 are needed to confirm that a short term top has been posted. If June renews this year's rally, the 87% retracement level of 2009's decline on the weekly continuation chart crossing at 87.79 is the next upside target. First resistance is last Wednesday's high crossing at 87.63. Second resistance is weekly resistance crossing at 87.79. First support is last Friday's low crossing at 85.33. Second support is the 20 day moving average crossing at 84.83.

Gold closed higher due to short covering on Tuesday as it consolidated some of last week's decline but remains below the 20 day moving average. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices are possible near term. If June extends last week's decline, the reaction low crossing at 1156.20 is the next downside target. Closes above the 10 day moving average crossing at 1209.10 would temper the near term bearish outlook. First resistance is the 20 day moving average crossing at 1198.40. Second resistance is the 10 day moving average crossing at 1209.10. First support is last Friday's low crossing at 1166.00. Second support is the reaction low crossing at 1156.20.

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Report Says: Canada’s Oil Sands Set to Become Biggest Source of U.S. Oil Imports

The Role of Canadian Oil Sands in U.S. Oil Supply, a report from Cambridge, Mass.-based IHS CERA, says that in a fast-growth scenario, oil sands could represent 36% of oil imports by 2030, or 20% in a more moderate growth scenario, compared with 8% in 2009. Production of 1.35 million barrels per day (mbd) in 2009 could rise to between 3.1 mbd and 5.7 mbd by then. Although production of oil sands has run into environmental opposition, innovation in the technology of oil sand production has been constant and there will be continued progress in cutting greenhouse gas (GHG) emissions and reducing its environmental impact, the report says.

While the total “well to wheels” greenhouse gas emissions from oil sands are some 5 to 15% higher than the average crude oil produced in the U.S., a comparison to the average can be misleading because some domestic crude oil production can actually have higher GHG emissions, the IHS CERA report says. However, continued high growth in oil sands production will require further advances in managing water and land use and the reclamation of tailings the waste material byproduct, the report says.....Read the entire article.

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Crude Oil Daily Technical Outlook For Tuesday Morning

With 4 hours MACD crossed below signal line, crude oil's recovery might be completed already. Intraday bias is flipped back to the downside for 64.24 low first. Break will confirm decline resumption for 60 psychological level next, which is close to 50% retracement of 33.2 to 87.15 at 60.18. On the upside, in case of another recovery, we'd expect strongly resistance at 38.2% retracement of 87.15 to 64.24 at 72.99 to limit upside and bring fall resumption finally.

In the bigger picture, the break of 68.59/69.50 support zone affirms our view that whole medium term rebound from 33.2 has completed at 87.15 already, just ahead of 50% retracement of 147.27 to 33.2 at 90.24. Further decline should be seen to 50% retracement of 33.2 to 87.15 at 60.18 at least. Also, as rebound from 33.2 is viewed as as a correction to the whole correction that started at 2008 at 147.27, we'd anticipate a break of 33.2 low in the longer term. On the upside, break of resistance at 78 level is needed to be indicate that fall from 87.15 is completed. Otherwise, we'll stay bearish.....Your keyword.

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Monday, May 24, 2010

Phil Flynn: The Death Of The Carry Trade

The” Carry Trade” just can’t carry the oil market away like it used to, especially with total petroleum inventories at a 20 year high for the month of May. So much for selling the dollar buying the Euro and every commodity you could get your hands on, the great carry trade unwind continues changing the way we may view all markets from this day forward.The global commodity markets are still trying to adjust to the economic problems in Europe and what may or may not happen in China in terms of economic policy. Not only will these issues adversely impact demand but also how the price of oil fits in terms as a hedge against global economic turmoil. As we have said many times before the increase in the price of oil and its fortunes has mainly been responding to the different phases of this global economic drama or as some have dubbed it “the Great Recession”.

With confidence in Europe being shaken and the dogma of ever increasing China demand is being questioned, the fragility of the oil price becomes so very apparent. The price of oil has got a lot of its bullishness not so much from oil demand but as a hedge against systemic risk. The euro has been the oil bull's best friend, not to mention the currency of “super models” but now it seems its fight for survival may have lost its appeal. The truth is that with the bailout of Greece and the purchases of debt by the ECB the Euro has changed forever anyway.Last week the markets went into crisis mode. The VIX volatility or fear index surged....Read the entire article.

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Crude Oil Falls Below $70 on Concern European Debt Crisis Hasn't Run Its Course

Crude oil declined, falling below $70 a barrel in New York, after the seizure of a Spanish bank fueled concern Europe’s debt crisis may spread. Oil dropped for the first day in three as the euro weakened against the dollar, reducing the investment appeal of commodities. U.S. supplies of crude oil probably rose for the 16th time in 17 weeks amid ample imports, according to analysts surveyed by Bloomberg News before a government report tomorrow.

“Speculators are shifting money from risky to non-risky assets,” said Ken Hasegawa, a commodity derivatives sales manager at Newedge in Tokyo. “From a fundamental point of view, inventories are high so that could push prices further down but crude oil is really going to be driven by the euro issue.” Crude oil fell as much as $1.08, or 1.5 percent, to $69.13 a barrel in electronic trading on the New York Mercantile Exchange. It was at $69.16 at 12:08 p.m. Singapore time. Yesterday, the contract rose 17 cents, or 0.2 percent, to settle at $70.21 a barrel.

Futures rose yesterday on speculation that China may delay economic tightening measures and on signs that U.S. economic growth will accelerate. Europe’s debt crisis has undermined that optimism, pushing the region’s common currency lower. The dollar rose to $1.2299 per euro from $1.2372 yesterday. The euro fell against all of its most traded counterparts after the Bank of Spain said on May 22 it appointed a provisional administrator to run CajaSur, a savings bank crippled by property loan defaults.....Read the entire article.

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How to Trade Market Bottoms for SP500 & Gold

The stock market topped in April which was expected from analyzing stocks and the indexes. Back in April I posted a few reports explaining how to read the charts to spot market tops. Today’s report is about identifying market bottoms. It does not get much more exciting than what we have seen in the past 2 months with the market topping in April and the May 6th mini market crash. This Thursday we saw panic selling which pushed the market below the May 6th low washing the market of weak positions.

For those of you who have been following me closely this year I am sure you have noticed trading has been a little slower than normal. This is due to the fact that the market corrected at the beginning of the year and we went long Feb 5th and again on Feb 25th. Since then the market rallied for 2 months and never provided another low risk entry point. In April the market became choppy and toppy and we eventually took a short position to ride the market down. Now were we are looking at another possible reversal to the upside.

Only a few trades this year which I know frustrates some individuals but if you step back and look at my trading strategy you will learn that we only need to trade a few trades a year to make some solid returns. I don’t know about you but I would rather trade a few times a month and live life between trades… not trade all day every day getting bug eyed in front of the computer.

Ok enough of the boring stuff let’s get into the charts....

SP500 – Stock Market Index Trading ETFs & Futures
The pullback in the broad market was expected but the mini crash on May 6th really through a wrench into things for us technical analysts. We don’t really know the truth about what happened that day… was it just a simple error or was it a planned error for the US government to take a massive short position to move something in their favor quickly to generate MASSIVE gains? It leaves us technicians hanging wondering if that was a shift in trend from up (accumulation) to down (distribution)?

My thoughts are if the crash was truly an error then we will see months if not another year of higher prices… But if it was a planned sell off with banks moving to the sidelines then we are most likely headed into another bear market. Personally it does not matter what happens as big money will be made in either direction. Problem is if we do go into another bear market then the majority of individuals will lose capital as investor’s portfolios get smaller and smaller. That will lead to a lot of depressed people…

In short, I am neutral on the stock market for the intermediate and long term. Once we have a few more months of price action only then will I have a plan for longer term investments. But on the short term time frame the market is screaming at me with extreme sentiment levels lining up on the stock market and gold.

The daily chart of the SPY – SP500 Index shows several important points which help me time market bottoms. We have prices trading at a support zone. Buyers step back into the game here and should provide a decent bounce which started Friday Morning.

Next we have the panic selling spikes from an indicator I created. Generally the day after we see panic in the market like we did on Thursday we will see a big bounce and many times a large rally.

Down at the bottom you can see my custom market cycles which are both starting to bottom. During times like this the market has a natural tendency to move higher.


VIX – Market Volatility Daily Chart
The VIX has an old saying “When the VIX is high its time to buy, When the VIX is low, its time to go”. Simple analysis clearly shows the VIX trading high and at a resistance zone.


Put/Call Ratio – Daily Trading Chart
This chart measures the amount of put and call options traded each day. When it is trading over 1.00 then we know for every 1 call option traded (wanting the market to go up) there is 1 put option traded (wanting the market to go down). Over 1.00 is extreme and when that many people are bearish and using leverage to profit from a drop in price then in my opinion it means everyone has already sold and the selling pressure is about to end.

Actually if you go back in time and review SP500 and this ratio you will notice 2-3 days after this ratio reaches 1.00 or higher the market bounces/bottoms.


NYSE Advance/Decline Line for Equities – Daily Chart
This chart shows us how many stocks are advancing or declining on any given day. When extremes are reached look for a short term bounce or bottom 1-3 days following.


How to Identify Stock Market Bottoms with Simple Analysis:
In short, I feel the market is forming a bottom here. How big of a rally will we get? I don’t know because of the mixed signals from the May 6th EXTREME heavy volume selling session. As usual I focus on trading with the trend, trading the low risk setups and I manage my money/positions scaling in and out of those positions as I see fit.

If you would like to receive Real Time Trading Signals & Trading Education check out Chris Vermeulen's Futures Trading Signals.Com.


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Crude Oil, Natural Gas, Gold and Dollar Commentary For Monday Evening

Crude oil closed slightly higher on Monday as it consolidated some of this month's decline. The mid range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term. If July extends this month's decline, last July's low crossing at 66.11 is the next downside target. Closes above the 20 day moving average crossing at 79.38 are needed to confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 74.43. Second resistance is the 20 day moving average crossing at 79.38. First support is last Thursday's low crossing at 68.85. Second support is last July's low crossing at 66.11.

Natural gas closed lower on Monday as it extends last week's decline. The low range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term. If June extends today's decline, this month's low crossing at 3.855 is the next downside target. Closes above the 10 day moving average crossing at 4.212 would temper the near term bearish outlook. First resistance is the 20 day moving average crossing at 4.140. Second resistance is the 10 day moving average crossing at 4.212. First support is today's low crossing at 3.986. Second support is this month's low crossing at 3.855.

The U.S. Dollar closed higher on Monday ending a three-day correction off last week's high. The high range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI have turned bearish signaling that sideways to lower prices are possible near term. Closes below the 20 day moving average crossing at 84.60 are needed to confirm that a short term top has been posted. If June renews this year's rally, the 87% retracement level of 2009's decline on the weekly continuation chart crossing at 87.79 is the next upside target. First resistance is last Wednesday's high crossing at 87.63. Second resistance is weekly resistance crossing at 87.79. First support is last Friday's low crossing at 85.33. Second support is the 20 day moving average crossing at 84.60.

Gold closed higher due to short covering on Monday as it consolidated some of last week's decline but remains below 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 bearish signaling that sideways to lower prices are possible near term. If June extends last week's decline, the reaction low crossing at 1156.20 is the next downside target. Closes above the 10 day moving average crossing at 1211.60 would temper the near term bearish outlook. First resistance is the 20 day moving average crossing at 1196.70. Second resistance is the 10 day moving average crossing at 1211.60. First support is last Friday's low crossing at 1166.00. Second support is the reaction low crossing at 1156.20.

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Crude Oil Daily Technical Outlook For Monday

Intraday bias in crude oil remains neutral and some more consolidations might be seen and rise to 38.2% retracement of 87.15 to 64.24 at 72.99 cannot be ruled out. However, upside should be limited by 61.8% retracement at 78.39 and bring fall resumption. Below 64.24 will target 60 psychological level next, which is close to 50% retracement of 33.2 to 87.15 at 60.18

In the bigger picture, the break of 68.59/69.50 support zone affirms our view that whole medium term rebound from 33.2 has completed at 87.15 already, just ahead of 50% retracement of 147.27 to 33.2 at 90.24. Further decline should be seen to 50% retracement of 33.2 to 87.15 at 60.18 at least. Also, as rebound from 33.2 is viewed as as a correction to the whole correction that started at 2008 at 147.27, we'd anticipate a break of 33.2 low in the longer term. On the upside, break of resistance at 78 level is needed to be indicate that fall from 87.15 is completed. Otherwise, we'll stay bearish.....Nymex Crude Oil Continuous Contract 4 Hours Chart

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Friday, May 21, 2010

Phil Flynn: Oil Fundamentally Speaking

Don’t you hate it when the fundamentals get in the way of a great bullish trade? Yes, you do unless you are bearish. Oil traders and the world continue to get a reality check as global markets are crumbling and teetering on the edge of oblivion. There is great loss of confidence in Europe as the true nature of the ills that still plague the global economy are unmasked. We live in a world of printed money, piles of debt and countries that hide the true nature of their debt.

The fundamentals of supply and diminishing demand has taken over crude oil as opposed to the fundamentals of economic illusions along with global markets that are crashing down.Oil got crushed into expiration, dropping to a low into the $64 a barrel handle before coming back on rumors of euro currency intervention. Yet the Wall Street Journal says that, “the sharp rally in the euro against the Swiss franc in Asian trading Friday was most likely due to large scale covering of short positions and profit taking rather than intervention from the Swiss or other central banks.” Yet many floor traders in Chicago disagreed.....Read the entire article.

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Crude Oil Declines on Concern Debt Crisis to Stall Recovery

Crude oil fell as European governments struggled to contain the region’s debt crisis, raising concern that it will slow the global economic recovery. Futures dropped as much as 2.5 percent as European Union finance ministers plan to meet today in Brussels to discuss sovereign debt. U.S. petroleum inventories climbed to the highest level in at least 20 years for the middle of May.

“The worry is that the European economy is going to drag the global economy into another recession,” Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis, said in an interview. “Because 2008 is so fresh in everybody’s mind, everyone I talk to is just petrified.” Crude oil for July delivery dropped 78 cents, or 1.1 percent, to $70.02 a barrel at 10:35 a.m. on the New York Mercantile Exchange. The July contract has dropped for nine consecutive days, losing 13 percent since May 10. Prices are down 7.2 percent this week.

Oil prices plummeted almost $115 a barrel between July and December 2008. Supplies of oil and all petroleum based fuels jumped to 1.81 billion barrels in the week ended May 14, the highest stockpiles on a seasonal basis in Energy Department data through 1990. High inventories have driven down the profit margin from refining crude into gasoline and heating oil from a 15 month high. The crack spread for July has dropped 14 percent this week, based on Nymex futures prices.....Read the entire article.

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Crude Oil Technical Outlook For Friday Morning

Short term outlook in crude oil remains bearish as long as 71.43 and another fall is still in favor. Sustained trading below 38.2% retracement of 33.2 to 87.15 at 66.54 will target 60 psychological level, which is close to 50% retracement at 60.18. On the upside, though, note that break of 71.43 resistance will indicate that a short term bottom is formed, possibly with convergence condition in 4 hours MACD, and bring stronger rebound.

In the bigger picture, the break of 68.59/69.50 support zone affirms our view that whole medium term rebound from 33.2 has completed at 87.15 already, just ahead of 50% retracement of 147.27 to 33.2 at 90.24. Further decline should be seen to 50% retracement of 33.2 to 87.15 at 60.18 at least. Also, as rebound from 33.2 is viewed as as a correction to the whole correction that started at 2008 at 147.27, we'd anticipate a break of 33.2 low in the longer term. On the upside, break of resistance at 78 level is needed to be indicate that fall fro 87.15 is completed. Otherwise, we'll stay bearish.....Nymex Crude Oil Continuous Contract 4 Hours Chart.

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