Friday, August 30, 2013

The Energy Report: Micro-Cap Oil Stocks that Hit the Jackpot

The Energy Report: With oil prices firming up over the past couple of months and the spread between West Texas Intermediate (WTI) and Brent Crude narrowing, what are your price expectations for the remainder of 2013 and into next year?

Phil Juskowicz: While I don't spend a lot of time predicting commodity prices, I personally see relatively stable short-term oil prices. Intermediate or long-term prices may weaken, assuming no supply disruptions arise from political upheavals, while gas prices may strengthen based on supply/demand fundamentals. We've seen continued oil supply growth and the short term market seems to be pretty range bound, having developed a good base around the $100 per barrel ($100/bbl) level.

TER: Where do you see some of the best investment opportunities in the oil and gas business?


PJ: Micro-cap exploration and production (EP) stocks have severely underperformed the SP Small Cap EP Index since the second half of 2011 (H2/11). However, the definition of "small cap" depends on who you're talking to. The Small Cap EP Index consists of companies around the billion-dollar range like Approach Resources Inc. (AREX:NASDAQ) and Northern Oil Gas Inc. (NOG:NYSE). Casimir has a micro-cap EP index, which is comprised of companies with market caps up to $500 million ($500M) with some names under $100M. That index level started to diverge in H2/11. Both of these groups consist of relatively equal gas/oil weightings, so the performance should not, in our opinion, be attributed to the relative strength of oil prices over gas that commenced around that time. As a result, we believe that there are attractive investment opportunities in the micro-cap EP universe.

Casimir Micro-Cap EP Index (White) vs. SP Small-Cap EP Index (Yellow)
idex

Casimir Micro-Cap EP Index composed of: AMZG, ANFC, CAK, CPE, CXPO, EGY, EEG, ENRJ, ENSV, FEEC, FXEN, GMET, GNE, HDY, HNR, IFNY, IVAN, LEI, MCEP, MILL, MPET, MPO, OEDV, PHX, PNRG, PSTR, RDMP, SARA, SSN, STTX, TAT, TENG, TGC, TPLM, USEG, WRES, ZAZA
Source: Bloomberg; Casimir Capital

TER: How do you choose the companies in your coverage list?

PJ: We look for small companies that have largely flown "under the radar screen" and are underfollowed. The companies we cover have strong management teams and operate in premier areas with good assets that have substantial cash flow potential.

TER: Do you cover any service companies?

PJ: Enservco Corp. (OTCBB:ENSV) is on our "watch list". The company is the only nationwide provider of hot oiling, well acidizing and frack heating services generally used to coax oil out of the ground, for example to counter paraffin buildups. Enservco experienced healthy margins in Q2/13 despite it typically being a seasonally weak time for heating services. The company continues having to turn customers away in some areas while it builds out its fleet. Management, in our opinion, has a track record of building successful companies and its regional staff has strong relationships with EPs. The company is also expanding into other basins and successfully tapping into new revenue sources.

TER: Why aren't competitors seeing the opportunity here and moving in to get a piece of the action?

PJ: There are regional pockets of mom and pop shops that will do some of these services, but, a nationwide company like a Noble Energy Inc. (NBL:NYSE) might turn to Enservco because it already has a reliable relationship with Enservco's staff in different areas. Enservco's services account for a very low percentage of total well drilling and completion costs (it might cost around $100,000 to service a $7M well) so customers are not as likely to conduct competitive bidding processes. Instead, they choose to use a company with which the frontline managers already have existing relationships.

TER: So it has developed a national reputation, which is its competitive strength.

PJ: And it's building out the capacity as we speak. Enservco is expanding its already large presence in the Marcellus Formation. In its Q2/13 conference call, management said they were starting to see the Utica play out a little bit. The Utica underlies the Marcellus in a lot of areas and Enservco gets some economics of scale there. [See map] Furthermore, management has been getting the word out more and also may be contemplating a reverse stock split and listing on another exchange.

Marcellus
Source: Marcellus Coalition

TER: What EP names on your coverage list look interesting?

PJ: We like Miller Energy Resources (MILL:NYSE; MILL:NASDAQ), which, in late 2009, captured former Pacific Energy Resources Ltd. assets out of bankruptcy that were valued at $500M for an outstanding $4.5M. Miller's entire enterprise value, meanwhile, is just $240M. Moreover, its infrastructure assets were valued by third parties on behalf of its lender at $190M. What makes these assets most attractive is the fact that recent well results indicate that original estimates by Forest Oil (which sold the properties to Pacific in 2007) may in fact be correct, which would mean that these Alaskan assets could contain 100200 million barrels (MMbbl) of recoverable oil reserves. Proved oil reserves presently stand at 8.61 MMbbl.

TER: How was Miller able to buy $500M worth of assets for less than 1% of their value? Even in bankruptcy, you'd think that there'd be buyers willing to pay more than that.

PJ: David Hall, a Miller Energy executive who had worked on the assets even before Pacific bought them from Forest Oil in 2007, was following the Alaskan bankruptcy proceedings. He got in touch with the CEO of Miller, Scott Boruff, and told him about these assets that were becoming available.

TER: Why does Miller believe that the original estimates of recoverable oil reserves may, in fact, be correct?

PJ: The thesis is that Forest Oil used the wrong completion techniques, which is why well performances had dropped off. The completion techniques Forest Oil used were in fact different from techniques used for other assets on the McArthur Trend. David Hall believed that workovers on existing wells, for example, replacing some electric submersible pumps and making changes to completion techniques on new wells, could improve production. Low and behold, that's exactly what's happened.
In addition, Miller just started doing sidetracks of some of these old wells. It posted a 21-day production test of its RU-2A well several weeks ago at 1,314 barrels per day, which would indicate that that the oil's there and it's recoverable. Management has been doing a good job of utilizing preferred equity to have substantial capital expenditure programs without diluting the common shareholders. To top it off, it has about 600,000 undeveloped acres that it's just starting exploration on as well.
TER: What other names look interesting?

PJ: I like Trans Energy Inc. (TENG:OTCBB), which is a pure play in the Marcellus Shale. The company holds about 20,000 net acres in the Marcellus, a substantial portion of which are in the core, liquids-rich part of the play. Operators, including Range Resources Corp. (RRC:NYSE), EQT Corp. (EQT:NYSE) and Gastar Exploration Ltd. (GST:NYSE), continue to increase their return assumptions for acreage adjacent to Trans Energy's. The company's production is set to ramp up as soon as Williams Companies Inc. completes the construction of certain infrastructure. Trans Energy's acreage is in northeast West Virginia, on the southwest Pennsylvania border. There's been a lot of success coming out of that area.

TER: What sort of strategy would you suggest our readers consider?

PJ: I think the micro-cap space, in general, is less correlated to the market's vagaries. Perceived changes in foreign interest rates, for example, have a larger effect on large-cap names. Micro-cap pricing is determined more by company-specific dynamics, such as anticipated future cash flows. Plus, a lot of micro-cap names and EPs in general seem to be more active on hedging, and therefore should be less susceptible to changes in commodity prices. As a result, investors that exercise due diligence should be rewarded for accurate cash flow predictions. If you want to find companies where your hard work can actually pay off, then the micro-cap space is a good place to look.

Micro caps seem to be getting more active in reaching new investors, and some of the management teams have regrouped from previous lives and are starting up very successful new companies. I think Bonanza Creek Energy Inc. (BCEI:NYSE) is a great example of management hailing from one company and getting back together and starting all over again.

TER: Thanks for talking with us today and giving us some interesting input, Phil.

PJ: I appreciate the opportunity.

Philip Juskowicz, CFA is a managing director in the research department at Casimir Capital, a boutique investment bank specializing in the Natural Resource industry. Juskowicz began his career at Standard Poor's in 1998, where he was one of the first analysts to recommend Mitchell Energy, credited with discovering the Barnett Shale. From 2001-2005, He worked with a former geologist in equity research at both First Albany Corp. and Buckingham Research. At Buckingham, Juskowicz was promoted to a senior oilfield service analyst position, leveraging his extensive knowledge of the EP space. From 2006-2010, he was an insider to the oil and gas industry, serving as a credit analyst at WestLB, a German investment bank. In this capacity, Juskowicz was responsible for $500M of loans to energy companies and projects. He earned a Master of Science in finance from the University of Baltimore.

Here is our complete disclosure

Wednesday, August 28, 2013

Precious Metals & Miners Flash Short-Sell Signal

It has been a bumpy ride for precious metal investors over the past couple of years and unfortunately we do not think its over just yet. But we feel fortunate to have our trading partner Chris Vermeulen on our team walking us through this.

Today Chris is telling us that the good news is that the bottom has likely been put in for gold, silver and gold miners BUT the recent rally in these metals and miner looks to be coming to an end. While we could see another pop in price over the next week or so the price, volume and momentum seem to be stalling out.

What does this mean? It means we should expect short term weakness and lower prices over the next month or two.

Here are three charts Chris posted several months. Their forecast were based off simple technical analysis using cycles, Fibonacci and price patterns. As you can see we are not trading at our key pivot level which we expect selling pressure to start to increase and eventually overpower the buyers sending the prices lower.....Click here to see Chris' complete chart work and article.



Wednesdays market summary and a U.S. response. Wait for it, wait for it.

It's no surprise that yesterday's news that the U.S. was going to have a military response to Syria spooked the markets and sent the indices to their biggest loss in some time. Today, it looks like the markets are digested what they went through yesterday.

October crude oil closed higher on Wednesday as it extends this summer's rally. Profit taking tempered early session gains and the low range close sets the stage for a steady to lower opening when Thursday's night session begins. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. If October extends this summer's rally, weekly resistance crossing at 114.83 is the next upside target. Closes below the 20 day moving average crossing at 106.04 would confirm that a short-term top has been posted. First resistance is today's high crossing at 112.24. Second resistance is weekly resistance crossing at 114.83. First support is the 20 day moving average crossing at 106.04. Second support is the reaction low crossing at 103.50.

October Henry natural gas closed higher on Wednesday as it extended this month's rally. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term. If October extends this month's rally, the 38% retracement level of the May-August decline crossing at 3.680 is the next upside target. Closes below the 20 day moving average crossing at 3.421 would confirm that a short term top has been posted. First resistance is today's high crossing at 3.628. Second resistance is the 38% retracement level of the May-August decline crossing at 3.680. First support is the 20-day moving average crossing at 3.421. Second support is August's low crossing at 3.154.

October gold closed lower due to profit taking on Wednesday as it consolidated some of the rally off June's low. The low range close sets the stage for a steady to lower opening when Thursday's night session begins trading. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term. If October extends the aforementioned rally, May's high crossing at 1489.00 is the next upside target. Closes below the 20 day moving average crossing at 1346.80 would confirm that a short term top has been posted. First resistance is today's high crossing at 1432.90. Second resistance is May's high crossing at 1489.00. First support is the 10 day moving average crossing at 1383.50. Second resistance is the 20 day moving average crossing at 1346.80.

The September Dollar closed higher on Wednesday. The high range close sets the stage for a steady to higher opening when Thursday's night session begins trading. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near term. Closes above the reaction high crossing at 81.99 are needed to confirm that a short term low has been posted. If September renews the decline off July's high, June's low crossing at 80.61 is the next downside target. First resistance is the reaction high crossing at 81.99. Second resistance is August's high crossing at 82.61. First support is last Tuesday's low crossing at 80.77. Second support is June's low crossing at 80.61.

And last but not least.....September coffee closed higher on Wednesday as it consolidated some of this summer's decline. The high range close set 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 September renews this month's decline, monthly support crossing at 10.21 is the next downside target. Closes above the 20 day moving average crossing at 118.11 would confirm that a low has been posted.

Here's the Premier Trader University "Free Training Webinar" Schedule


SDRL - Seadrill announces second quarter 2013 results

Consolidated revenues for SeaDrill in the second quarter of 2013 were US$1,268 million compared to US$1,265 million in the first quarter of 2013. The increase was despite the sale of the tender rig business, which operated for only 30 days in the quarter, resulting in a US$100 million revenue decline from 1Q 2013. Overall improvement in fleet performance more than offset this revenue reduction.

Operating profit for the quarter was US$507 million compared to US$552 million in the preceding quarter. The decrease is driven by gain on sale of the West Janus in the first quarter, offset by lower operating and SG&A expenses during the second quarter.

*      Seadrill reports its best operating results and net income ever and generated second quarter 2013 EBITDA*) of US$665 million

*     Seadrill reports second quarter 2013 net income of US$1,750 million and earnings per share of US$3.68

*     Seadrill increases the ordinary quarterly cash dividend by 3 cents to US$0.91

*     Economic utilization for floaters increased to 94% in Q2 2013 from 92% in Q1 2013

*     Economic utilization for the jack-up fleet in Q2 2013 was 98%, down from 99% in Q1 2013

*     Seadrill secured a three-year contract for the newbuild drillship West Neptune with a total estimated revenue potential of US$662 million

*     Seadrill realized a gain of US$1,256 million from the sale of the tender rig division to SapuraKencana Petroleum for a total consideration of US$2.9 billion

*    Seadrill completed the sale of the tender rig T-15 to Seadrill Partners LLC (SDLP) for a total consideration of US$210 million

*    Seadrill ordered two jack-ups for a total estimated project price of US$230 million per rig, with deliveries in 4Q 2015 and 1Q 2016

*     Seadrill and SapuraKencana joint project secured an eight year contract for three Pipe Laying Support Vessels with a total estimated revenue potential of US$2.7 billion

*     North Atlantic Drilling completes sale and leaseback transaction for the newbuild harsh environment jack-up West Linus for US$600 million


Subsequent events

*     Seadrill appoints Per Wullf as CEO to take over from Fredrik Halvorsen

*     Seadrill orders four ultra-deepwater drillships for an estimated project price below US$600 million per rig, with deliveries scheduled for the second half of 2015

*     Seadrill orders two jack-ups for an estimated project price of US$230 million per rig, with deliveries in the second and third quarters of 2016, respectively

*     Seadrill reaches 50.1% ownership in Sevan Drilling and launches mandatory offer for all outstanding shares which closed on August 22, 2013

*     Seadrill secures a 180 day contract for the newbuild ultra-deepwater drillship West Tellus with a total estimated revenue potential of US$150 million

*     Seadrill secures a 2.5 year contract for the jack-up rig West Freedom with a total estimated revenue potential of US$222 million

*     Seadrill secures a one year contract extension with Talisman in Malaysia for the jack-up rig West Vigilant at US$167,000 per day

*     North Atlantic Drilling is awarded an extension of the current drilling contract, in addition to a new drilling contract for West Navigator, securing employment to December 2014 with a total estimated revenue potential of US$98 million

Click here for complete earnings report and consolidated financial information

Here's a FREE Trend Analysis for SeaDrill....ticker SDRL


Tuesday, August 27, 2013

Volatility in Syria = Volatility in the Markets. Risk off is ON!

The U.S. stock indexes closed solidly lower today on profit taking and amid a “risk-off” day in the world market place The U.S. appears poised to take military action against Syria, possibly within 48 hours, after the Syrian government regime used chemical weapons against its citizens. World stock markets sold off Tuesday on the jitters regarding Syria. There are worries any U.S. military intervention in Syria could escalate into further instability and violence in the already volatile Middle East. Emerging country financial markets and currencies also saw strains Tuesday amid the risk aversion in the market place. The Indian rupee hit another record low versus the U.S. dollar Tuesday.

October Nymex crude oil closed up $3.04 at $108.97 today. Prices closed nearer the session high today and hit a fresh contract high. Syria tensions have pushed oil sharply higher following U.S. Secretary of State Kerry's harsh condemnation of Syria Monday afternoon. Crude oil bulls have the strong overall near term technical advantage. Prices have now seen a bullish upside “breakout” from the choppy and sideways trading range at higher price levels.

December gold futures closed up $26.50 an ounce at $1,419.70 today. Prices closed nearer the session high and hit a nearly three month high today. Safe haven buying was featured, along with fresh technical buying interest. The key “outside markets” were also bullish for the gold market today, as the U.S. dollar index was lower and crude oil prices were sharply higher. The gold market bulls have the near term technical advantage. A two month old uptrend is in place on the daily bar chart.

October natural gas closed up 2.4 cents at $3.577 today. Prices closed near the session high. The nat gas bears still have the overall near term technical advantage. However, the bulls have gained a bit of upside momentum.

The September U.S. dollar index closed down .271 at 81.170 today. Prices closed near the session low. The greenback bears have the overall near term technical advantage. Prices are in a seven week old downtrend on the daily bar chart.

And you just have to know that we can't resist talking about coffee. December coffee closed down 110 points at 116.65 cents today. Prices closed near the session low today as prices hover near the recent contract low. The key “outside markets” were fully bullish for the coffee market today as the U.S. dollar index was lower and crude oil prices were sharply higher. Yet, the coffee market bulls could get no traction, which is another bearish clue for coffee. The coffee bears have the solid overall near term technical advantage.

Don't miss this weeks webinar with Scott Andrews....Just click here to enroll!


Monday, August 26, 2013

Thoughts from the Frontline.....France: On the Edge of the Periphery

By John Mauldin



"The emotional side of me tends to imagine France, like the princess in the fairy stories or the Madonna in the frescoes, as dedicated to an exalted and exceptional destiny. Instinctively I have the feeling that Providence has created her either for complete successes or for exemplary misfortunes. Our country, as it is, surrounded by the others as they are, must aim high and hold itself straight, on pain of mortal danger. In short, to my mind, France cannot be France without greatness.
– Charles de Gaulle, from his memoirs

Recently there have been a spate of horrific train wrecks in the news. Almost inevitably we find out there was human error involved. Almost four years ago I began writing about the coming train wreck that was Europe and specifically Greece. It was clear from the numbers that Greece would have to default, and I thought at the time that Portugal would not be too far behind. Spain and Italy clearly needed massive restructuring. Part of the problem I highlighted was the significant imbalance between exports and imports in all of the above countries.

In the Eurozone there was no mechanism by which exchange rates could be used to balance the labor-cost differentials between the peripheral countries and those of the northern tier. And then there's France. I've been writing in this space for some time that France has the potential to become the next Greece. I've spent a good deal of time this past month reviewing the European situation, and I'm more convinced than ever that France is on its way to becoming the most significant economic train wreck in Europe within the next few years.

We shifted focus at the beginning of the year to Japan because of the real crisis that is brewing there. Over the next few months I will begin to refocus on Europe as that train threatens to go off the track again. And true to form, this wreck will be entirely due to human error, coupled with a large dollop of hubris. This week we will take a brief look at the problems developing in Europe and then do a series of in-depth dives between now and the beginning of winter. The coming European crisis will not show up next week but will start playing in a movie theater near you sometime next year. Today's letter will close with a little speculation on how the developing conflict between France and Germany and the rest of its euro neighbors will play out.

France: On the Edge of the Periphery

 

I think I need first to acknowledge that the market clearly doesn't agree with me. The market for French OATS (Obligations Assimilables du Trésor), their longer-term bonds, sees no risk. The following chart is a comparison of interest rates for much of the developed world, which I reproduce for those who are interested in comparative details. Notice that French rates are lower than those of the US, Canada, and the UK. Now I understand that interest rates are a function of monetary policy, inflation expectations, and the demand for money, which are all related to economic growth, but still….



France's neighbors, Italy and Spain, have rates that are roughly double France's. But as we will see, the underlying economics are not that much different for the three countries, and you can make a good case that France’s trajectory may be the worst.

"No: France Is Not Bankrupt" – Really?

 

We will start with a remarkable example of both hubris and economic ignorance published earlier this year in Le Monde. Under the headline "No: France Is Not Bankrupt," Bruno Moschetto, a professor of economics at the University of Paris I and HEC, made the following case. He apparently wrote this with a straight face. If you are not alone, please try not to giggle out loud and annoy people around you. (Hat tip to my good friend Mike Shedlock.)

No, France is not bankrupt .... The claim is untrue economically and financially. France is not and will not bankrupt because it would then be in a state of insolvency.

A state cannot be bankrupt, in its own currency, to foreigners and residents, since the latter would be invited to meet its debt by an immediate increase in taxation.

In abstract, the state is its citizens, and the citizens are the guarantors of obligations of the state. In the final analysis, "The state is us." To be in a state of suspension of payments, a state would have to be indebted in a foreign currency, unable to deal with foreign currency liabilities in that currency….

Ultimately our leaders have all the financial and political means, through the levying of taxes, to be facing our deadlines in euros. And besides, our lenders regularly renew their confidence, and rates have never been lower.

Four things leap to mind as I read this. First, Professor, saying a country is not bankrupt because it would then be insolvent is kind of like saying your daughter cannot be pregnant because she would then have a baby. Just because something is unthinkable doesn't mean it can't happen.

To continue reading this article from Thoughts from the Frontline – a free weekly publication by John Mauldin, renowned financial expert, best-selling author, and Chairman of Mauldin Economics – please click here.

Don't miss this week's webinar "Advanced Study of the Opening Gap in Crude Oil"


Sunday, August 25, 2013

Trading the "Opening Gap" in the Crude Oil Market

A few days ago we posted a compelling video explaining two unique benefits of trading the crude oil market.  If you missed it, here it is again.
 
On Wednesday, August 28th, our trading partners at Master The Gap will share a comprehensive research study for trading the opening gap in oil. 


Learn More Now 

During this 1 hour event, a wide range of time frames and scenarios will be reviewed showing what has worked best over the past 6+ years. Detailed templates will be included that can be used to create your own actionable gap trading blueprints.

Whether you are already trading oil or interested in starting, this special event and research study can help you create a solid trading plan based on what has worked over the past 1500+ trading days. 

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So why not learn how to trade Crude Oil with history on your side?

  


Friday, August 23, 2013

Crude Oil Shakes off the Nasdaq Blues and Ballmer News to Finish Higher

October crude oil closed higher on Friday. The high range close sets the stage for a steady to higher opening when Monday's night session begins. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near term. Closes below the reaction low crossing at 102.22 would confirm that a double top has been posted. Closes above July's high crossing at 108.93 would renew this summer's rally while opening the door for a possible test of weekly resistance crossing at 110.55 later this summer. First resistance is July's high crossing at 108.93. Second resistance is weekly resistance crossing at 110.55. First support is the reaction low crossing at 102.22. Second support is the 38% retracement level of the April-July rally crossing at 100.27.

The September S&P 500 closed higher on Friday as it extended Thursday's key reversal up. The high range close sets the stage for a steady to higher opening when Monday's night session begins trading. 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 1676.40 would confirm that a short term low has been posted. If September resumes the decline off August's high, the 50% retracement level of the June-August rally crossing at 1629.45 is the next downside target. First resistance is the 10 day moving average crossing at 1661.17. Second resistance is the 20 day moving average crossing at 1676.40. First support is Thursday's low crossing at 1631.70. Second support is the 50% retracement level of the June-August rally crossing at 1629.45.

October gold closed higher on Friday renewing the rally off June's low. The high range close sets the stage for a steady to higher opening when Monday's night session begins trading. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term. If October extends the aforementioned rally, June's high crossing at 1424.00 is the next upside target. Closes below the 20 day moving average crossing at 1333.70 would confirm that a short term top has been posted. First resistance is today's high crossing at 1399.40. Second resistance is June's high crossing at 1424.00. First support is the 20 day moving average crossing at 1333.70. Second resistance is the reaction low crossing at 1272.10.

September Henry natural gas closed lower due to profit taking on Friday as it consolidates some of this month's rally. The low range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are overbought but remain bullish signaling that sideways to higher prices are possible near term. If September extends this month's rally, the 38% retracement level of the May-August decline crossing at 3.662 is the next upside target. Closes below the 20 day moving average crossing at 3.473 would confirm that a short term top has been posted. First resistance is today's high crossing at 3.562. Second resistance is the 38% retracement level of the May-August decline crossing at 3.662. First support is the 20 day moving average crossing at 3.473. Second support is August's low crossing at 3.129.

Check out the Day Trading History of 16 Major Candlestick Patterns


Thursday, August 22, 2013

NASDAQ Flash Freeze and Digesting the FOMC Minutes

The U.S. stock indexes closed higher today. The Nasdaq was shut down for three hours in the afternoon, and that took some buying interest away from all the indexes. The stock index bulls still have the overall near term technical advantage, but are fading. The market place had some time to digest Wednesday afternoon's FOMC minutes that revealed no clear consensus from FOMC members on when to start to wind down the Fed's monthly bond buying program, also known as quantitative easing.

While the minutes were not all that different from the last minutes of the FOMC that were released several weeks ago, the “take away” the market place garnered from this latest Fed event was that “tapering” of quantitative easing is coming, and likely sooner rather than later. The FOMC minutes reinforced ideas that the long, long road of very easy money from the world's major central banks will reach an end in the coming months. Such was deemed bullish for the U.S. dollar, and bearish for world bond markets and periphery currencies. U.S. 10 year note yields hit a two year high of 2.925% overnight. German and U.K. bond yields also hit multi year highs overnight. Asian currency and financial markets remained strained Thursday.

The Indian rupee and Turkish lira hit new record lows versus the U.S. dollar Thursday. Indian and Indonesian central bank officials have taken steps to stabilize their currencies, but with only very limited success. There are worries about an “Asian contagion” that has in the past roiled markets worldwide. Rising interest rates in the major world economies have put pressure on the periphery currencies. Chinese manufacturing data Thursday showed improvement from the prior month.

The HSBC purchasing managers index rose to 50.1 in August from 47.7 in July. A reading over 50.0 suggests economic growth. China is the world's second- largest economy, but the leading worldwide importer of many key raw commodities. The China data somewhat assuaged the Asian markets, but the concerns of an Asian contagion outweighed the positive China data. Traders and investors have moved the ongoing Egypt unrest to the back burner for the moment, as there are no major, new developments there.

However, any escalation in violence is likely to impact the market place. News reports that Syria has used chemical weapons against its civilians, with hundreds killed, is a matter that will be closely monitored by the market place, and is yet another geopolitical hotspot that could flare up to become a major markets factor.

So why not consider adding this simple set up in the Crude Oil market?


Wednesday, August 21, 2013

"Beating the Market Makers" webinar replay.....Can you be on the same side of the trade?

John has decided to replay Tuesdays wildly popular "Beating the Market Makers" webinar on Thursday August 22nd at 2 p.m.. Our trading partner John Carter of Simpler Options is going to teach you more in one hour, for NO COST, then you could learn in 3 months. John is going to show us in detail how he uses a weekly options trading method that puts you on the same side of a trade as the market makers. A good place to be.

Over 10,000 traders watched the live webinar on Tuesday and John does limit seating so sign up right away before traders fill all of the slots.

Just Click here to Register Now

Here's what he'll be covering...

- How to be on the same side as the Market Maker
- How to protect yourself in a trade
- How to pick the right stock at the right time
- What Wall Street doesn't want you to know about weekly options
- The one simple trick to put the odds in your favor

And much more......

This timely webinar replay will take place on Thursday, August 22nd at 2:00PM Eastern Time.

Click here to register

After you register you will receive reminder emails automatically so you don't miss the webinar. I don't know if they'll be recording this, or if he'll ever share this information again, so don't miss out.

We'll see you in this free training class, then we'll see you in the markets. Will you be trading with us....or against us?

Ray @ The Crude Oil Trader

Market Makers.....Can you be on the same side of the trade?


Andrey Dashkov: Peak Gold

By Andrey Dashkov, Research Analyst


In the mining business, it is said that grade is king. A high-grade project attracts attention and money. High grade drill intercepts can send an exploration company's stock price higher by an order of magnitude. As a project moves to the development stage, the higher the grade, the more robust the projected economics of a project. And for a mine in production, the higher the grade, the more technical sins and price fluctuations it can survive.

It is also said that the "low hanging fruit" of high-grade deposits has all been picked, forcing miners to put lower-grade material into production.

You could call it Peak Gold.....and argue that the peak is already behind us. Let's test that claim and give it some context.

One of the ways to look at grades is to compare today's highest-grade gold mines to those from the past. We pulled grade data from the world's ten highest grade gold mines for the following chart.


As of last year, grades at the richest mines have fallen an average of 20% since 1998. However, except for 2003, when the numbers were influenced by the Natividad gold/silver project (average grade 317.6 g/t Au) and Jerritt Canyon (245.2 g/t Au), the fourteen-year trend is relatively stable and not so steeply declining. The spike in 2003 looks more like an outlier than Peak Gold.

However, these results don't provide much insight into the resource sector as a whole, one reason being that the highest-grade mines have vastly different production profiles.

For example, Natividad—owned by Compañía Minera Natividad y Anexas—produced over 1 million ounces in 2003 from ore grading over 300 g/t gold, while the San Pablo mine owned by DynaResource de Mexico produced only 5,000 ounces of gold from 25 g/t Au ore in the same year.

This made San Pablo one of the world's ten highest-grade operations in 2003, but its impact on global gold supply was minimal. In short, the group is too diverse to draw any solid conclusions.

We then turned to the world's top 10 largest operations, a more representative operation, and tallied their grades since 1998.


The picture here is more telling. Since 1998, gold grades of the world's top ten operations have fallen from 4.6 g/t gold in 1998 to 1.1 g/t gold in 2012.

This does indeed look like Peak Gold, in terms of the easier-to-find, higher-grade production having already peaked, but it's not as concerning as you might think. As gold prices increased from $302 per ounce at the end of 1998 to the latest price of $1,377, both low-grade areas of existing operations and new projects whose grades were previously unprofitable became potential winners.

Expanding existing operations into lower-grade zones near an existing operation is the cheapest way to increase revenue in a rising gold price environment. So many companies did just that.

Indeed, the largest gold operations—the type we included in the above chart—would be the first ones to drop their gold grades when prices are higher, simply due to the fact that what they lose in grade they can make up in tonnage run through existing processing facilities. Larger size allows lower-grade material to be profitable because of economies of scale. New technologies have helped to make lower-grade deposits economic as well.

So, at least until 2011, the conventional wisdom of "grade is king" was being replaced by "size is king."
However, production costs have been increasing as well—and have continued increasing even as metals prices have retreated in recent years. Rising operating costs and capital misallocations (growth for growth's sake, for example) are at least partly to blame for miners' underperformance this year.

Suddenly, grade seems to be recovering its crown. It remains to be seen whether more high-grade discoveries can actually be made, or whether Peak Gold is actually behind us.

The Takeaway

Truth is, there is no king. Grade and size, although among the most important variables in the mining business, tell only part of the story. Neither higher grades nor monster size prove profitability by themselves—the margin they generate at a given point in time is what matters most. And then what the company does with its income matters, too.

Now that the industry has moved on from a period of reckless expansion, we expect investors to become more demanding of the economic characteristics of new projects coming online. Existing mines that processed low-grade ore in a rising gold price environment are now judged by the flexibility they have to cut costs, increase margins, and persevere through gold price fluctuations.

It's true that high enough grade can trump all other factors in a mining project, but it's the task of a company's management to navigate the changing environment, control operating costs, and oversee the company's growth strategy so that it creates shareholder value.

The resource sector has had a sober awakening, and now we see many companies changing their priorities from expansion to profitability, which depends on many parameters in addition to grade. This is a good thing.
As for Peak Gold, if that does indeed turn out to be behind us, the big, bulk-tonnage low-grade deposits that are falling out of favor today will become prime assets in the future. It'll either be that or go without.

Times may be tough, but the story of the current gold bull cycle isn't done being written. The better companies will survive the downturn and thrive in the next chapter. Identifying these is the ongoing focus of our work.

How about a project that's high grade and big? We recommended a new producer that has such an asset, and it hasn't been this cheap since its IPO. Find out who it is in the August issue of Casey International Speculator. Start your risk-free trial with 100% money-back guarantee here.



Know the Zone & Improve Your Gap Trading

Guest writer today is our trading partner Scott Andrews. If you are not familiar with Scott's work this will be a great primer on "gap trading".

I am a gap trader. Specifically, I 'fade' the opening gap (i.e. go short when the gap is up or long when the gap is down). My first research breakthrough many years ago was in recognizing that gap selection was the “door” to making profits and the “key” to that door was to focus on the location of the opening price.

Using the prior day's direction (up or down) and the open, high, low, and closing prices, I created ten “zones” and each provides tremendous insight into the probability of a gap filling or not. My selection strategy has evolved over the years to include market conditions, patterns and seasonality, but zones remain the foundation of my gap fade selection criteria.

So why do opening zones work? They inherently incorporate :

    *    proven support and resistance levels
    *    short term trend
    *    overnight bias
    *    gap size
    *    trader psychologically


Together these five elements combine to create a wide range of gap fade setups that vary from highly probable to highly risky for any market. Since opening gaps in general have a strong tendency to trade back to the prior day's closing price (65-70%), the name of the game is not trying to catch all of the winners, but rather to avoid most of the losers. And that is what opening zones do very well.

So why do you think gaps in the U-L zone (bottom right of the Gap Zone Map) show such a low historical win rate (48%)? I believe it's because gaps opening in this zone are catching traders positioned to the long side off guard, triggering many sell stops in the process. Plus, such an obvious reversal from the prior day surely attracts new short sellers who want to jump on board the beginning of a new potential trend. I've nicknamed this zone the “BLUD” zone for obvious reasons, plus it's easy to remember: "Below the Low of an Up Day."

Whether you trade the opening gap as a setup or just want to improve the timing of your swing trade entries and exits, you will do a better job, if you pay attention to the opening zone next time. And by the way, gap zones work great for not only the indices, but individual stocks and commodity markets like Corn and Oil too.

Good trading and good gapping!

You may also be interested in watching Scott’s short video on the The Power of Diversification. During this short, compelling video, Scott explains:

    *    Why asset diversification is not enough
    *    7 ways traders can diversify
    *    The right vs. wrong way to diversify
    *    Equity curve example (the power of complementary strategies)

 And much more

Watch This Video Now





Tuesday, August 20, 2013

Market Makers.....Can you be on the same side of the trade?

Tonight, Tuesday August 20th, our trading partner John Carter of Simpler Options is going to teach you more in one hour, for NO COST, then you could learn in 3 months. John is going to show us in detail how he uses a weekly options trading method that puts you on the same side of a trade as the market makers. A good place to be.

As of this morning over 10,000 traders have registered and John does limit seating so sign up right away.

Just Click here to Register Now

Here's what he'll be covering...

- How to be on the same side as the Market Maker
- How to protect yourself in a trade
- How to pick the right stock at the right time
- What Wall Street doesn't want you to know about weekly options
- The one simple trick to put the odds in your favor

And much more......

This timely webinar will take place on Tuesday, August 20th at 8:00PM Eastern Time.

Click here to register

After you register you will receive reminder emails automatically so you don't miss the webinar. I don't know if they'll be recording this, or if he'll ever share this information again, so don't miss out.

We'll see you in this free training class, then we'll see you in the markets. Will you be trading with us....or against us?

Ray @ The Crude Oil Trader

Market Makers.....Can you be on the same side of the trade?


Monday, August 19, 2013

Markets Drop for a Fourth Day on Bond Price and Bank Worries

The September S&P 500 closed lower on Monday and below the 38% retracement level of the June-August rally crossing at 1647.42 as it extended this month's decline. The low range close sets the stage for a steady to higher opening when Tuesday's night session begins trading. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term. If September extends the decline off August's high, the 50% retracement level of the June-August rally crossing at 1629.45 is the next downside target. Closes above the 20 day moving average crossing at 1683.59 would confirm that a short term low has been posted. First resistance is the 20 day moving average crossing at 1683.49. Second resistance is August's high crossing at 1705.00. First support is today's low crossing at 1646.00. Second support is the 50% retracement level of the June-August rally crossing at 1629.45.

September crude oil closed lower due to profit taking on Monday. The mid-range close sets the stage for a steady opening when Tuesday's night session begins. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near term. Closes above July's high crossing at 108.93 would renew this summer's rally while opening the door for a possible test of weekly resistance crossing at 110.55 later this summer. Closes below the reaction low crossing at 102.22 would confirm that a short term top has been posted. First resistance is July's high crossing at 108.93. Second resistance is weekly resistance crossing at 110.55. First support is the reaction low crossing at 102.22. Second support is the 38% retracement level of the April-July rally crossing at 100.27.

October gold closed lower due to profit taking on Monday as it consolidated some of the rally off June's low. The low range close sets the stage for a steady to lower opening when Tuesday's night session begins trading. Stochastics and the RSI are overbought but remain bullish signaling that sideways to higher prices are possible near term. If October extends the aforementioned rally, June's high crossing at 1424.00 is the next upside target. Closes below the 20 day moving average crossing at 1323.60 would confirm that a short term top has been posted. First resistance is today's high crossing at 1382.40. Second resistance is June's high crossing at 1424.00. First support is the 20 day moving average crossing at 1323.60. Second resistance is the reaction low crossing at 1272.10.

September Henry natural gas closed higher on Monday and above the 20 day moving average crossing at 3.416 confirming that a short term low has been posted. The high range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. If September extends today's rally, the 38% retracement level of the May-August decline crossing at 3.662 is the next upside target. Closes below the 10 day moving average crossing at 3.327 would confirm that a short term top has been posted. First resistance is today's high crossing at 3.501. Second resistance is the 38% retracement level of the May-August decline crossing at 3.662. First support is the 10 day moving average crossing at 3.327. Second support is August's low crossing at 3.129.

And of course we can't leave out coffee anymore. September coffee closed lower on Monday and the low range close set the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near term. If September renews this month's rally, the reaction high crossing at 126.50 is the next upside target.

Sign up for John Carter's next webinar "Beating the Market Makers" NOW!


Sunday, August 18, 2013

Scott Andrews.....Proof You are Crazy not to Diversify Your Trading

Many commodity traders believe that investors only need to diversify to be successful. But that simply is not true!

No single trading strategy works all the time and diversification can help during the tough stretches by REDUCING your draw downs. Best of all, diversification (done properly) can also ACCELERATE your equity without increasing your overall risk.

Check out this excellent video by our friend Scott Andrews from Master The Gap as he explains the ins and outs of trading diversification. No opt-in required.

The Power of Diversification

During this short, compelling video, Scott explains:

• Why asset diversification is not enough
• 7 ways traders can diversify
• The right vs. wrong way to diversify
• Equity curve example (the power of complementary strategies)
• And much more

Watch This Video Now

Don't worry; there is NO SALES PITCH in this presentation. It's just solid information from a conservative trader that we believe everyone should consider.

If you are interested in adding a new setup and/or market feel free to opt in, then watch your email in the coming days for another free video introducing you to trading the oil market.

Please feel free to leave us a comment and let us know what you think about Scott's video

Proof You are Crazy not to Diversify Your Trading


Friday, August 16, 2013

Be on right side of this market, protect yourself, BE HERE

John Carter of Simpler Options is going to teach you more in this one hour webinar, than you could learn in 3 months. And he's doing it just for you....our readers. Register here asap since John does limit seating.

Here's what he'll be covering...

*     How to be on the same side as the Market Maker
*     How to protect yourself in a trade
*     How to pick the right stock at the right time
*    What Wall Street doesn't want you to know about weekly options
*    The one simple trick to put the odds in your favor

And much more

This timely webinar will take place online but seating is limited due to the high demand.

Click Here to Register

After you register you will receive reminder emails automatically so you don't miss the webinar. I don't know if they'll be recording this, or if he'll ever share this information again, so don't miss out.

See you in this free training class.

Then we'll see you in the markets, as we put John's methods to work,

Ray @ The Crude Oil Trader


Be on right side of this market, protect yourself, BE HERE


Adam weighs in ...... Is Gold Indicating Trouble Ahead?

Is it time to go long gold in a big way? Our trading partner Adam Hewison, President of INO.com and Co-creator of MarketClub, has come out with his call on gold for the near term. Are you trading with him or against him?.....

As another trading week comes to a close, it is worth noting that gold is closing at a nine week high for a Friday. I believe that this is a significant event, and believe that gold has now put in a base to move higher later this year and next year.

It's a little ironic that hedge fund traders, like George Soros, recently divested themselves of their long gold positions, as it now appears that the market has put in a major base and wants to move higher.

Our long term monthly Trade Triangle for gold continues to be in a negative mode. However, this Trade Triangle [click here to get a free trial of Adam's Trade Triangle technology] is slowly beginning to flatten out and I would not be surprised to see it change to green in the not too distant future. In today's report, I will be covering gold and a gold stock that you may want to trade, as it flashed a major buy signal today.

I will also be covering some very interesting stocks that I think have potential on the upside after their recent correction from their highs, as well as my analysis of the major markets and what I am looking for in next week's market.

Have a great trading day and a super weekend,
Adam Hewison
President, INO.com
Co-Creator, MarketClub

P.S.  Click here to check out Adam's INO TV. It's FREE!



John Carter's "Dirty Secrets of Weekly Options".... New Video


Will 1,650 Offer Buying Support for the SP500?

Earlier this week we shared with our readers a great article from our trading partner J.W. Jones where he covered in detail the loomimg correction in the equity markets. Now what? Here's a follow up article that includes the trades J.W. closed this week.......

In my most recent article, I discussed how I was expecting U.S. financial markets to reverse to the downside in the near future. I illustrated the various divergences in a variety of underlying technical indicators which have issued warnings in the past.

Unlike many financial journalists or newsletter operators, I am an option trader first and a writer second. My primary focus is typically to sell option spreads that focus on the passage of time for profitability and/or take advantage of large implied volatility spikes which help to improve my probability of success on each trade taken. Unfortunately in 2013 Mr. Market has not accommodated my style of trading as we have had very low volatility most of the year.

Low volatility levels many times force option traders to take more directional trades which ultimately leads to lower probabilities of success. I still take advantage of stocks that have had implied volatility spikes, but ultimately this market has forced theta sellers to get more aggressive, take more risk, and accept less potential profitability.

I have recently closed several winning positions with members of Options Trading Signals service during the August expiration. Several positions were actually closed Thursday August 15th for gains.

However, what might surprise readers is that several positions that I closed for gains this week and even today were long biased positions. In fact, one of my largest winning trades for the August monthly option expiration cycle was the EWZ Call Debit Spread that was essentially long Brazilian equities.

Here are the detailed results of J.W.'s recent trades


New video....John Carters weekly options method to beat the market makers at their own game!


Thursday, August 15, 2013

What makes THIS different?

They say that those who can't DO...teach. Does THIS prove that phrase wrong? 

In this 7 minute video, John Carter of Simpler Options shows his REAL account balance, his winning AND losing trades that has racked up amazing profits. How did he grow his account? Simple.

Using the methods he teaches in this 7 minute video. See his account and learn his methods. Please feel free to leave a comment and tell us if you can see yourself using these methods to trade commodities, equities or even currencies.

Watch John's "Dirty Secrets of Weekly Options" video now


Three urgent steps to take right now as interest rates begin to explode higher

FIRST, other than for trading purposes, exit all sovereign bond holdings. There is the possibility of one more drop in interest rates, but the long term reality is that bond prices are going to fall.

SECOND, exit the most vulnerable interest sensitive stocks. See our list below of 25 STOCKS TO DUMP RIGHT NOW.

THIRD, beef up your income portfolio with these three rock solid companies my research analysts have found that thrive on rising interest rates."

Just click here to read John Mauldins, Chairman of Mauldin Economics, entire article "Three urgent steps to take right now as interest rates begin to explode higher"



What makes THIS different? In this 7 minute video, John Carter shows his REAL account and trades
 

Crude oil bulls hold their ground as the markets fall around them

September crude oil closed higher on Thursday. The mid range close sets the stage for a steady to higher opening when Friday's night session begins. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. Closes above July's high crossing at 108.93 would renew this summer's rally while opening the door for a possible test of weekly resistance crossing at 110.55 later this summer. Closes below last Thursday's low crossing at 102.22 would confirm that a short term top has been posted. First resistance is July's high crossing at 108.93. Second resistance is weekly resistance crossing at 110.55. First support is last Thursday's low crossing at 102.22. Second support is the 38% retracement level of the April-July rally crossing at 100.27.

John Carter's new video "Dirty Secrets of Weekly Options"

The September S&P 500 closed sharply lower on Thursday as it extends this month's decline. The low range close sets the stage for a steady to lower opening when Friday's night session begins trading. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term. If September extends the decline off last week's high, the 38% retracement level of the June-August rally crossing at 1647.42 is the next downside target. Closes above the 10 day moving average crossing at 1688.79 would confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 1688.79. Second resistance is this month's high crossing at 1705.00. First support is today's low crossing at 1656.00. Second support is the 38% retracement level of the June-August rally crossing at 1647.42.

Get our Advanced Crude Oil Study – 15 Minute Range

September Henry natural gas closed higher on Thursday as it extends the rally off last week's low. The high range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are bullish signaling that a short term low might be in or is near. Closes above the 20 day moving average crossing at 3.448 would confirm that a short term low has been posted. If September renews this year's decline, psychological support crossing at 3.000 is the next downside target. First resistance is the 20 day moving average crossing at 3.448. Second resistance is the 25% retracement level of the May-August decline crossing at 3.478. First support is last Thursday's low crossing at 3.129. Second support is psychological support crossing at 3.000.

Here's Statistical Edge Floor Traders use to Beat the Market

October gold closed sharply higher on Thursday renewing the rally off June's low. The high range close sets the stage for a steady to higher opening when Friday's night session begins trading. Stochastics and the RSI are diverging but remain bullish signaling that sideways to higher prices are possible near term. If October extends the aforementioned rally, June's high crossing at 1424.00 is the next upside target. Closes below the 10 day moving average crossing at 1315.40 would confirm that a short term top has been posted. First resistance is today's high crossing at 1369.20. Second resistance is June's high crossing at 1424.00. First support is the 10 day moving average crossing at 1315.40. Second resistance is last Wednesday's low crossing at 1272.10.

John Carter releases DVD version of "Spread Trading Strategies for any size Account"....Click Here to get your copy!


Wednesday, August 14, 2013

Crude oil bulls maintain a "weak" technical adavantage

September Nymex crude oil closed up $0.04 at $106.87 today. Prices closed nearer the session high today. Bulls have the overall near term technical advantage mostly due to supply disruptions in Libya and escalating violence in Egypt..

September natural gas closed up 5.7 cents at $3.342 today. Prices closed near mid range today on more short covering. Prices last week hit a 13 1/2 month low. The natural gas bears still have the solid near term technical advantage, but may now be exhausted following the recent selling pressure. Prices are in a steep three month old downtrend on the daily bar chart.

"How to beat the Market Makers at their OWN GAME"

December gold futures closed up $12.00 an ounce at $1,332.50 today. Prices closed nearer the session high and saw more short covering and bargain hunting. Gold bears still have the overall near term technical advantage.

The September U.S. dollar index closed down .060 at 81.775 today. Prices closed near mid range in quieter trading today. The bears still have the overall near term technical advantage. Prices are in a five week old downtrend on the daily bar chart.

Can't forget our favorite trade for 2013.....October sugar closed down 3 points at 17.22 cents today. Prices closed near mid range today and saw mild profit taking from recent gains as prices Tuesday hit a six week high. The sugar bears still have the overall near term technical advantage. However, prices are in a three week old uptrend on the daily bar chart.

John Carter releases DVD version of "Spread Trading Strategies for any size Account"....Click Here to get your copy!


Tuesday, August 13, 2013

John Carter's "Dirty Secrets of Weekly Options".... New Video

2013 will be remembered as the year the retail investor was introduced to the world of trading options. And our readers have been lucky enough to follow our trading partner John Carter of Simpler Options as he teaches us how to successfully trade options using his "unique weekly model".

A couple of times a year John is willing to produce a new video and bring us his latest take on trading options including showing us his recent trades from his personal account. What do you need to do to understand this system?

Just click here to watch his new video!

Here's what you'll be learning......

    *   How he has made $650,000 this year beating the market makers at their own game

    *   The Dirty Little Secret of Weekly Options

   *   Why weekly options are his favorite way to trade options

    *   The account size you need to trade weekly options....[Here's a hint...any size]

    *   Your goal as an options trader

    *   And so much more...


Watch the video and please feel free to leave a comment and tell us what you think about the video and what you think about using his weekly options trading model.

Ray @ The Crude Oil Trader


Watch "What Wall Street Doesn't Want You to Know about Trading Options"


Monday, August 12, 2013

The SP500 Enters Major Correction Period

Our trading partner David A. Banister of Market Trends Forecast releases his call that the SP 500 is close to confirming new correction. Says 1685 support is the key. Here's the details based on his Elliot Wave research.

The SP 500 has been on a tear since late 2012 with the SP 500 bottoming at 1266. The rally though we have been charting out as part of a “Primary wave 3″ uptrend for this Bull market cycle from March 2009, and we are likely entering a Major correction or what we would label “Major wave 4″. Since the 1266 lows, we have had Major Wave 1, 2, and now 3 completed at 1710. We are entering Major wave 4 which should correct 23-38% of the entirety of Major wave 3, which was 444 points.

This correction will be confirmed with any close below 1674 and nails in the coffin begin with any close below 1685 on the SP 500 index. Primary wave 1 of this super bull cycle ended at 1370, a 704 point rally. Primary wave 3 will likely be larger than Primary wave 1 and I am projecting a top between 1900-2000 on the SP 500 before it’s completed. The current correction is Major wave 4 of Primary wave 3, which has 5 Major waves required. With that said, our projections are for 1605 on the shallow side and 1540 on the deeper side for Major wave 4 of Primary wave 3.

Now it is possible that we may extend a bit higher yet in Major wave 3 to 1736-1772, but only if we hold the 1685 support lines which the market is basing around currently. In any event, at our Trading service we have been aggressively taking profits in the past two weeks on multiple positions while still holding a few open at this time.

Below is a chart showing our projected correction pivots of 1605 and 1540, subscribers will be updated on a regular basis. Just click here to join Banister with a 33% discount on his trading service and also receive Precious Metals (GOLD) forecasts on a regular basis every week.

812 SP 500


John Carter releases DVD version of "Spread Trading Strategies for any size Account"....Click Here to get your copy!


Federal Railroad Administration tightens crude oil regulations

In an effort to improve safety, the Federal Railroad Administration discussed plans to begin asking shipping companies to provide its supply data for crude oil shipments, according to The Wall Street Journal. The FRA believes that some crude oil shipments are transported in unsafe tanker cars.

By using the supply data, the FRA will investigate whether certain oil companies are shipping crude oil with chemicals that would make the transport more hazardous than their current classification.

Some tanker cars have been reported to show "severe corrosion," possibly as a result of the dangerous chemicals included in the mixture.

If shipping companies are unable to provide their supply data, the FRA will work with the Pipeline and Hazardous Materials Safety Administration to independently test specific cars.

The aggressive approach by the FRA comes after a runaway train derailed and exploded in the Quebec town of Lac-Mégantic. The train was carrying 72 crude oil tanker cars. Forty seven people were killed in the blast.

"They seem to be saying, 'Get your house in order or we'll do it for you,'" said Grady Cothen, a former FRA safety official.

More information about integrity management issues in the United States can be found at PennEnergy's research area.

Posted courtesy of our friends at PennEnergy


John Carter releases DVD version of "Spread Trading Strategies for any size Account"....Click Here to get your copy!


How Many Day Trading Strategies Do You Need?

Our trading partners at MarketGauge have developed a simple, low risk approach to trading that has rewarded them with amazing profits using simple techniques that leverage the Opening Range. 

And they did it with a maximum risk of only $150 on each trade in a documented account! 

Follow the link below to watch a short video from MarketGauge that shows you how their Opening Range approach allows them to end each month in the black, plus see how you can statistically improve your trading for more consistent gains. 
  
Watch The Short Video Here 
 
During the video you'll discover:
  • One simple indicator that dramatically improves the profitability of trading the Open Range 
  • How to determine when to trade breakouts vs. reversals for maximum profit 
  • How to avoid breakouts that fail AND profit from the reversals
  • The ‘best’ way to determine stops and targets for consistent returns 
  • And More!
After the video be sure to register for a ‘Live’ event with MarketGauge where they will demonstrate these powerful methodologies and show you the ‘only’ day trading strategy you’ll ever need…  Plus see documented proof that their strategy truly creates an advantage for your trading. 

Go Here To Watch The Video And Register For The Event!




Saturday, August 10, 2013

You pushed oil higher on Friday....was it China Demand or Middle East Disruption?

September crude oil closed higher ending a five day correction off last Friday's high. Yet shares of some top oil companies were down at the close of trading on Friday. BP fell $.01 to $41.27, Chevron fell $.57 or .5 percent, to $122.50, ConocoPhillips fell $.26 or .4 percent, to $66.83, Exxon Mobil Corp. fell $.43 or .5 percent, to $90.72, Marathon Oil Corp. fell $.12 or .3 percent, to $34.55. The high range close in Sept. oil sets the stage for a steady to higher opening when Monday's night session begins. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near term.

Closes in oil below last Tuesday's low crossing at 102.67 would confirm that a short term top has been posted. Closes above July's high crossing at 108.93 would renew this summer's rally while opening the door for a possible test of weekly resistance crossing at 110.55 later this summer. First resistance is July's high crossing at 108.93. Second resistance is weekly resistance crossing at 110.55. First support is last Tuesday's low crossing at 102.67. Second support is the 38% retracement level of the April-July rally crossing at 100.27.

The September S&P 500 closed lower on Friday. The mid range close sets the stage for a steady to lower opening when Monday's night session begins trading. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term. Closes below the 20 day moving average crossing at 1687.33 would confirm that a short term top has been posted. If September extends the rally off June's low, upside targets will now be hard to project with the index trading into uncharted territory. First resistance is last Friday's high crossing at 1705.00. Second resistance is unknown with September trading into uncharted territory. First support is the 20 day moving average crossing at 1687.33. Second support is the reaction low crossing at 1670.50.

October gold closed higher on Friday. The high range close sets the stage for a steady to higher opening when Monday's night session begins trading. Stochastics and the RSI are turning neutral to bullish signaling that sideways to higher prices are possible near term. Today's close above the 10 day moving average crossing at 1307.90 confirms that a short term low has been posted. If October renews the decline off July's high, July's low crossing at 1208.50 is the next downside target. First resistance is the reaction high crossing at 1339.40. Second resistance is July's high crossing at 1348.00. First support is Wednesday's low crossing at 1272.10. Second support is July's low crossing at 1208.50.

September Henry natural gas closed lower on Friday leaving Thursday's key reversal up unconfirmed. The low range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term. If September extends this year's decline, psychological support crossing at 3.000 is the next downside target. Closes above the 20 day moving average crossing at 3.520 would confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 3.349. Second resistance is the 20 day moving average crossing at 3.520. First support is Thursday's low crossing at 3.129. Second support is psychological support crossing at 3.000.

Last but not least, our favorite trade for 2013.....September coffee closed higher on Friday and the high range close set the stage for a steady to higher opening on Friday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. Today's close above the 20 day moving average crossing at 122.22 confirms that a short term low has been posted. If September extends this week's rally, the reaction high crossing at 126.50 is the next upside target.

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