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Sunday, November 30, 2014

Weekly Crude Oil, Dollar and Gold Market Summary for Week Ending Friday November 28th

Crude oil futures in the January contract are down $6 a barrel as OPEC announced on Thanksgiving that they will not cut production as the trade was expecting 1 million barrels to be cut sending prices to a 5 year low with the next major level of support all the way back to May 24th of the year 2010 at 67.15 and I still do believe with OPEC and Saudi Arabia definitely wanting lower prices that they will get their wish as prices remain bearish in my opinion. Crude oil futures are trading far below their 20 and 100 day moving average telling you that trend is lower and if you’re still short this market I would place my stop loss above the 10 day high which currently stands at 77.83 which is around 1000 points or $10,000 risk per contract plus slippage and commission as the chart structure now has turned terrible. The chart structure before today’s activity was very solid as the 10 day high was very close to where prices were trading, however when you move $5 lower in one day that’s what’s going to happen. If you’re not short this market I would sit on the sidelines because I think the risk is too high but definitely do not try and pick a bottom because who knows how low prices can actually go. The U.S dollar continues its bullish momentum up another 60 points today also contributing to a weaker energy market as the world is awash with energy supplies at the current time and you have to remember in 2008 prices traded around $35 a barrel and that was with a weak U.S dollar so prices still can head lower.
Trend: Lower
Chart Structure: Terrible

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The U.S dollar is rallying sharply this Friday afternoon currently trading at 88.42 in the December contract as I’ve been recommending a bullish position in the U.S dollar while placing your stop loss below the 10 day low which currently stands at 87.23 risking around $1,200 dollars plus commission and slippage per contract as the chart structure is outstanding at the current time. The U.S dollar is trading above its 20 & 100 day moving average telling you that the trend is to the upside as crude oil prices are down nearly $5 which is really putting pressure on several of the foreign currencies such as the Canadian dollar which is down 150 points and I still do believe we’re in a longer-term secular bull market in the U.S dollar. The European countries look to head into recession as the trend is your friend in the commodity markets so continue to play this to the upside while placing the proper stop loss while using the proper amount of contracts risking only 2% of your account balance on any given trade in case you are wrong. The strong U.S dollar is pressuring many commodity prices to the downside as the next major resistance is at 88.51 which was the most recent high hit last week and I do think prices will continue to move higher as investors feel much safer buying the U.S dollar than buying any other currency which are all seemingly in turmoil at the current time.
Trend: Higher
Chart Structure: Excellent

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Gold futures this Friday afternoon after the Thanksgiving holiday are sharply lower due to the fact that crude oil prices are down nearly $5 also pressuring the precious metals to the downside as gold in the February contract is currently trading down $29 at 1,167 after settling last Friday at 1,198 as I still remain neutral in this market as prices are trading above their 20 day but still below their 100 day moving average so avoid this market at the current time. In my opinion choppy markets are difficult to trade as the longer term downtrend line in gold is still intact in my opinion as a strong U.S dollar and S&P 500 continue to take money out of gold as the money flow continues to go into those 2 sectors as I still think there’s a possible retest of 1,130 in the month of December and if you remember in 2013 December was also a negative month to the downside as the stock market in my opinion will continue to climb higher throughout the rest of the year. The chart structure in gold is poor at the current time as prices have been choppy in recent weeks so look for a better market to trade and keep an eye on this and hopefully better chart structure will develop over the course of the next several weeks but I’m feeling that we will not be involved in the gold market until at least early 2015.
Trend: Mixed
Chart Structure: Poor

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