trading partner Michael Seery to give our readers a weekly recap of the futures market. He has been a senior analyst for close to 15 years and has extensive knowledge of all of the commodity and option markets.
Here's Mikes call on crude oil and gold. Read more of his calls for this week by visiting here.
Crude oil futures are trading above their 20 but still below their 100 day moving average telling you that the trend is mixed as I have been advising clients to sit on the sidelines until volatility slows down which could take some time. Crude oil futures settled last Friday at 53.67 a barrel while currently trading around 51.20 in the April contract down around $2.50 for the trading week.
The chart structure is starting to improve as prices have been trading between 50-55 in the last 2 weeks looking to breakout soon so keep a close eye on this market as a breakout above $55 could be in the cards but be patient as the trend is still choppy with no short term trend which does not meet my criteria to enter.
The API report came out yesterday stating that we had 14 million barrels in storage versus the 3 million estimate sending prices down over $2 as the fundamentals still remain bearish as currently there is still an oversupply issue in the short term.
Chart Structure: OK
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Gold futures in the April contract settled last Friday at 1,227 while currently at 1,207 down about $20 for the trading week still trading below their 20 & 100 moving average telling you that the trend is to the downside as prices have hit a 6 week low. I am currently sitting on the sidelines awaiting better chart structure to develop as investors continue to put money into the equity market as gold seems to be entering into a bearish trend once again in my opinion.
The next level of major support is around the 1,180 level and if that level is broken I would have think that a retest of the contract low which was hit in early November 2014 could be in the cards so keep a close eye on this trade because a trade could be coming if chart structure improves and that could happen next week.
Problems around the world seem to be out of the lime light at the current time as I don’t see any real reason to own gold as I remain bullish the S&P 500 as the U.S dollar continues to hover around 11 year highs as I think the dollar is in a secular bull market for some time to come as Europe’s economy is not as strong as the United States as that’s also a negative fundamental influence on gold prices.
Chart Structure: Poor
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