Tuesday, June 12, 2012

Are Commodities Putting in a Bottom?

Crude oil closed higher due to short covering on Tuesday as it consolidates above the 87% retracement level of the 2011-2012 rally crossing at 81.36. The high range close sets the stage for a steady to higher opening when Wednesday's night session begins. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near term. Closes above the 20 day moving average crossing at 88.25 are needed to confirm that a low has been posted. If July renews this spring's decline, last October's low crossing at 77.05 is the next downside target. First resistance is the reaction high crossing at 87.03. Second resistance is the 20 day moving average crossing at 88.25. First support is last Monday's low crossing at 81.21. Second support is last October's low crossing at 77.05.

Natural gas closed higher due to short covering on Tuesday as it consolidated some of the decline off May's high. The high range close sets the stage for a steady to higher 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 renews the decline off May's high, April's low crossing at 2.136 is the next downside target. Closes above the 20 day moving average crossing at 2.515 are needed to confirm that a short term low has been posted. First resistance is the 20 day moving average crossing at 2.515. Second resistance is May's high crossing at 2.838. First support is today's low crossing at 2.173. Second support is April's low crossing at 2.136.

Gold closed higher due to short covering on Tuesday as it extends the rebound off last Friday's low. The high range close sets the stage for a steady to higher opening when Wednesday's night session begins trading. Stochastics and the RSI are neutral to bearish hinting that a short term top might be in or is near. Closes below the 20 day moving average crossing at 1583.80 are needed to confirm that a short term top has been posted. If August renews the rally off May's low, April's high crossing at 1674.30 is the next upside target. First resistance is the reaction high crossing at 1632.00. Second resistance is May's high crossing at 1674.30. First support is the 20 day moving average crossing at 1583.80. Second support is May's low crossing at 1529.30.

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Crude Oil Trade For This Week....Understanding Follow Through and Utilizing a Trailing Stop

From guest analyst Brian Booth.....

The chart shown below is a snapshot of the July Crude Oil futures. After spending the entire month slipping lower alongside of most of the major global markets, Crude Oil prices have tried to recover off of $82.00 a barrel in the first week of June.

One of the identifiable themes for this chart is the range that Crude traded in throughout May (see blue trendlines on chart). There were four days in the month when prices closed outside of this range, and this is what I feel is most important to highlight.

A common theme in market reports over the last few months has been the lack of volume in many of the futures, and markets overall. As Europe and China continue to disappoint, traders have been booking gains on their long term positions and have failed to return with the same enthusiasm that we saw when the US FED was actively easing the market.

Over the next few weeks, the markets will not only wait for the FED’s next FOMC policy statement but will also look for a final election decision out of Greece. This week, traders look to news from OPEC on Thursday as they meet to discuss oil output levels. The impact of these meetings and reports will be instrumental in determining whether many markets will recover from May’s slides, or whether they will endure another leg lower.

The reason that I chose the Crude Oil as the chart of the week is because I feel that the next time that Crude prices close outside of this range again, the move will show us a trend to trade. What I think is very important is to note how prices broke the trend on the upper end for two days, and then fell back into the range. Normally, closes above the range for multiple days would see follow through buying. Instead, prices quickly corrected lower.

Three days later, prices were not only lower; they closed outside of the range on the bottom end! Normally, traders would look for a follow through sell after two days below the range but were treated to an almost $5 rally in three days which was corrected twenty four hours later and almost corrected AGAIN twenty fours after that! If Johnny Carson were reporting on the technicals over the last eleven days, I imagine he would say, “This is some wild, weird stuff”!

With all of this in mind, I will be watching for Crude prices to close outside of the range again. I believe that the next time this happens, the trade will see follow through buying or selling instead of two days followed by a reversal. If Crude closes above the range, I will look for a continued move higher, but will definitely be recommending traders use stops below and in the range. If Crude prices begin closing below the range again, I will look for follow through selling and will recommend selling the futures with stop orders above and in the range. I will also recommend that traders utilize a trailing stop as the market allows.



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U.S. Crude Oil Production in First Quarter of 2012, Highest in 14 years

Strong growth in U.S. crude oil production since the fourth quarter of 2011 is due mainly to higher output from North Dakota, Texas,and federal leases in the Gulf of Mexico, with total U.S. production during the first quarter of 2012 topping 6 million barrels per day (bbl/d) for the first time in 14 years.

graph of United States crude oil Production, 1998-2012, as described in the article text

After remaining steady between 5.5 million and 5.6 million bbl/d during each of the first three quarters of 2011, EIA estimates that U.S. average quarterly oil production grew to over 5.9 million bbl/d during the fourth quarter and then surpassed 6 million bbl/d during the first quarter of 2012, according to the latest output estimates from EIA's May Petroleum Supply Monthly report (see chart below). The last time U.S. quarterly oil production was above 6 million bbl/d was during October-December 1998.

graph of United States quarterly crude oil Production, 2011-2012, as described in the article text

The roughly 6% growth in U.S. oil production from October 2011 through March 2012 is largely the result of increases in oil output in North Dakota, Texas, and the Gulf of Mexico. After passing California in December 2011 to become the third largest oil producing state, North Dakota then jumped ahead of Alaska in March 2012 as the state with the second largest oil output. Texas remains far ahead in the number one production spot.

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Monday, June 11, 2012

Lack of Faith in Spain Deal Sends Crude Oil Lower....Much Lower

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Crude oil closed lower on Monday but remains above the 87% retracement level of the 2011-2012 rally crossing at 81.36. The low range close sets the stage for a steady to lower 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 the 20 day moving average crossing at 88.81 are needed to confirm that a low has been posted. If July renews this spring's decline, last October's low crossing at 77.05 is the next downside target. First resistance is the 10 day moving average crossing at 85.27. Second resistance is the 20 day moving average crossing at 88.81. First support is last Monday's low crossing at 81.21. Second support is last October's low crossing at 77.05.

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Natural gas closed lower on Monday renewing the decline off May's high. The low range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are oversold but are bearish signaling that sideways to lower prices are possible near term. If July renews the decline off May's high, April's low crossing at 2.136 is the next downside target. Closes above the 20 day moving average crossing at 2.528 are needed to confirm that a short term low has been posted. First resistance is the 20 day moving average crossing at 2.528. Second resistance is May's high crossing at 2.838. First support is today's low crossing at 2.198. Second support is April's low crossing at 2.136.

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Gold closed higher due to short covering on Monday as it consolidates some of last Thursday's decline. The high range close sets the stage for a steady to higher opening when Tuesday's night session begins trading. Stochastics and the RSI have turned bearish hinting that a short term top might be in or is near. Closes below the 20 day moving average crossing at 1581.60 would confirm that a short term top has been posted. If August extends the rally off May's low, April's high crossing at 1674.30 is the next upside target. First resistance is the reaction high crossing at 1632.00. Second resistance is May's high crossing at 1674.30. First support is the 20 day moving average crossing at 1581.60. Second support is May's low crossing at 1529.30.

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Sunday, June 10, 2012

Monday Precious Metals and Equity Prices are Marked UP!

The past couple months have been a roller coaster ride for investors and traders. Overseas headline news has made investing and trading more difficult than normal because of prices gaping up or down at the opening bell several times per week. The next two weeks are going to be even crazier because of the Greek election and Spanish bank bailout.
This past weekend it looks as though the Spanish banks are getting bailed out which will be similar to the 2008 – 09 bailout we saw in the United States. This news has marked up stocks and commodity prices during overnight trading Sunday. The major indexes are up 1-2% across the board.
Looking at the technical and sentiment this is what I feel will take place and how it can be attacked…
Major stock indexes and commodities will be trading at resistance at the open on Monday.
And the dollar which was hit hard in overnight trading Sunday is now trading at support. A bounce in the dollar and sellers stepping in at resistance could pull the market down for session or two.
The first 15 minutes of Monday’s session short sellers will be panicking out of their positions and getting stopped out. Once the dust starts to settle resistance and an oversold dollar may do their part and force the market lower later in the day.
Now if we add sentiment into this picture thinking of the masses covering their short positions in a big way we know from past events that when the masses all trade the same direction the market quickly reverses goes the opposite direction in the short term for 1-3 days.
So what does one do if they are short the market this week as I am in this boat?
Personally, I would wait 15-30 minutes to let things unfold and see what the price, volume and sentiment is doing. Keep in mind morning trends tend to stall out and roll over at 10am ET, or 11:30am ET. Knowing that; I will be watching price and volume to see if there is a bearish intraday pattern unfolding that looks as though it will unfold within those time frames. If so, I will hold my position and look for a reversal back down where I can exit at a lower price hopefully. But for all we know this news may just put the top market and we get much lower prices yet. Anyways, that is my plan as of Sunday night.
Stocks, Gold & Dollar Rising Together?
The recent few months I have been talking about how we could stocks, commodities and the dollar rise together. While is sounds crazy we just may start seeing that happen sooner than later. The Euro group appears to be willing to bailout the Spanish banks and that should cause the Euro lose more value and send the US dollar soaring.
Having more Euro liquidity is bullish for stocks and commodities along with the dollar. For all we know this just may be the financial storm for American’s next eggs (investments owned in Dollars) to rebound strongly over the next 12 months.
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Saturday, June 9, 2012

Crude Oil Weekly Technical Outlook For Saturday June 9th

From the staff at Oil N'Gold......

Crude oil turned into sideway consolidation after edging lower to 81.21 initially. Recovery was limited by 4 hours 55 EMA but there was no follow through selling. Initial bias is neutral this week and we'd likely see more consolidative trading ahead. Above 87.03 will bring another rise but upside should be limited by 92.21 resistance and bring fall resumption eventually. Below 81.21 will send crude oil through 80 psychological level to test on 74.95 key support.

In the bigger picture, price actions from 114.84 are developing into a three wave consolidation pattern. And, the third leg should have already started at 110.55. Deeper fall should eventually be seen to 74.95 low and possibly below. Though, we'd likely see strong support from 64.23 cluster level, 61.8% retracement of 33.20 to 114.83 at 64.38 and bring another medium term rise. Hence we'll look for reversal signal below 74.95.

In the long term picture, crude oil is in a long term consolidation pattern from 147.27, with first wave completed at 33.2. The corrective structure of the rise from 33.2 indicates that it's second wave of the consolidation pattern. While it could make another high above 114.83, we'd anticipate strong resistance ahead of 147.24 to bring reversal for the third leg of the consolidation pattern.

Nymex Crude Oil Continuous Contract 4 Hour, Daily, Weekly and Monthly Charts

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Friday, June 8, 2012

Bullish Signals Creeping in to the Crude Oil Market

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Crude oil closed lower on Friday but remains above the 87% retracement level of the 2011-2012 rally crossing at 81.36. The high range close sets the stage for a steady to higher opening when Sunday's evening session begins. 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 89.54 are needed to confirm that a low has been posted. If July renews this spring's decline, last October's low crossing at 77.05 is the next downside target. First resistance is the 10 day moving average crossing at 86.17. Second resistance is the 20 day moving average crossing at 89.54. First support is Monday's low crossing at 81.21. Second support is last October's low crossing at 77.05.

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Natural gas closed higher on Friday as it consolidated some of the decline off May's high. The high range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are oversold and are turning neutral to bullish signaling that sideways to higher prices are possible near term. Closes above the 20 day moving average crossing at 2.547 are needed to confirm that a short term low has been posted. If July renews the aforementioned decline, the reaction low crossing at 2.166 is the next downside target. First resistance is the 20 day moving average crossing at 2.547. Second resistance is the reaction high crossing at 2.838. First support is today's low crossing at 2.231. Second support is April's low crossing at 2.096.


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Gold closed higher due to short covering on Friday as it consolidates some of Thursday's decline. The high range close sets the stage for a steady to higher opening when Sunday's evening session begins trading. Stochastics and the RSI are overbought and are turning neutral to bearish hinting that a short term top might be in or is near. If August renews the decline off February's high, the 75% retracement level of the 2010-2011 rally crossing at 1461.30 is the next downside target. If August extends the rally off May's low, April's high crossing at 1674.30 is the next upside target. First resistance is last Friday's high crossing at 1632.00. Second resistance is April's high crossing at 1674.30. First support is the 20 day moving average crossing at 1580.90. Second support is May's low crossing at 1529.30.

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Bloomberg: Crude Oil Heads for Longest Weekly Losing Streak Since 1998

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Crude oil fell, heading for the longest run of weekly losses in more than 13 years, on concern that an economic slowdown in the U.S. and Europe will worsen and curb fuel demand.

Crude dropped as much as 3.3 percent after German exports decreased for the first time this year as Europe’s debt crisis and weaker global growth reduced consumption. Federal Reserve officials need to assess the risk from Europe and U.S. budget cuts before deciding on stimulus measures, Federal Reserve Chairman Ben S. Bernanke said yesterday.

“Germany is the lynchpin of the whole euro zone, and if they are slowing, that’s going to add more negative news to the markets,” said Rich Ilczyszyn, chief market strategist and founder of Iitrader.com in Chicago. “It’s basically a letdown after Bernanke’s comments yesterday. There is no growth right now, no oil demand”.....Read the entire Bloomberg article.

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Thursday, June 7, 2012

Bernanke Speaks....and they all fall down!

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The U.S. stock indexes closed mixed today. The bulls were disappointed with Federal Reserve Chairman Ben Bernanke's speech to the Joint Economic Committee of the U.S. Congress. Bernanke said the U.S. is facing economic headwinds, especially due to the European Union debt crisis, but offered up no specifics on any fresh monetary stimulus package to promote more economic growth. The restrained tone of Bernanke's speech disappointed bulls who wanted immediate gratification on economic stimulus.

However, Bernanke at this time holding his cards close to his vest on the matter did not surprise most market watchers, many of whom still reckon the Fed will at some point down the road provide fresh monetary policy easing. The “Bernanke bust” overshadowed several significant market place developments that occurred earlier Thursday, led by news China has cuts its interest rate by 0.25% in an effort to stimulate its economy.

Crude oil closed down $0.85 a barrel at $84.17 today. Prices closed near the session low today. The crude bears have the solid overall near term technical advantage. There are still no early technical clues to suggest a market bottom is close at hand.

Natural gas closed down 14.6 cents at $2.275 today. Prices closed near the session low and hit a fresh six week low today. Bears have the solid overall near term technical advantage and gained more downside momentum today.

Gold futures closed down $44.10 an ounce at $1,590.10 today. Prices closed nearer the session low today and were pressured by the failure of Fed chief Bernanke to offer fresh monetary stimulus at today's testimony to Congress. The gold market bulls quickly lost their technical momentum today. Bears regained the slight near term technical advantage in gold.

The U.S. dollar index closed down 14 points at 82.63 today. Prices closed near mid range today and saw more profit taking. No chart damage has occurred this week but the bulls are fading a bit and a bearish weekly low close on Friday would begin to hint that a market top is in place. Bulls do still have the overall near term technical advantage.

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Where is Crude Oil and Precious Metals Likely Headed on Friday

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CNBC's Sharon Epperson discusses Thursday's activity in the commodities markets and looks at where crude oil and precious metals are likely headed on Friday.



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CME Group....Morning Crude Oil and Natural Gas Market Report

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July crude oil prices reversed early losses during the initial morning hours in response to an unexpected Chinese interest rate cut. This morning's announcement by the PBOC was the first action taken by central bankers to support growth. Meanwhile, the crude oil market drafted some support from yesterday's EIA inventory data that showed a draw of 111,000 barrels. However, an unexpected build in Cushing Oklahoma supplies and builds in gasoline and distillate supplies might have tempered the upside reaction in July crude oil.

EIA crude stocks are 15.668 million barrels above year ago levels and 37.31 million barrels above the five year average. Crude oil imports for the week stood at 8.957 million barrels per day compared to 9.056 million barrels the previous week. The refinery operating rate saw a significant increase of 1.9% to 91.0%, which compared to 87.2% last year and the five year average of 88.0%.

July natural gas prices registered a lower low in early morning action as they continued the decline from yesterday's high. While the natural gas market appeared to draft a measure of support from recent weather forecasts bolstering the case for higher air conditioning demand, there appears to be a more dominant negative force hanging over the market. Expectations for this morning's report are for an injection of around 55 bcf.

Posted courtesy of The CME Group

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Wednesday, June 6, 2012

Little Fed [Atlanta President] Speaks and Crude Oil market Listens

Have Gold, Silver and Mining Stocks Bottomed?

So this is what happens when a fed president out of ATLANTA speaks? Crude oil closed higher due to short covering on Wednesday as it bounced off the 87% retracement level of the 2011-2012 rally crossing at 81.36. The mid range close sets the stage for a steady opening when Thursday's night session begins. Stochastics and the RSI are oversold and are turning neutral to bullish signaling that sideways to higher prices are possible near term. Closes above the 20 day moving average crossing at 90.81 are needed to confirm that a low has been posted. If July extends this month's decline, last October's low crossing at 77.05 is the next downside target. First resistance is the 10 day moving average crossing at 87.31. Second resistance is the 20 day moving average crossing at 90.81. First support is Monday's low crossing at 81.21. Second support is last October's low crossing at 77.05.

20 Survival Skills for the Trader

Natural gas closed lower on Wednesday and the low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are oversold and are turning neutral to bullish signaling that sideways to higher prices are possible near term. Closes above the 20 day moving average crossing at 2.576 would confirm that a short term low has been posted. If July renews last week's decline, the reaction low crossing at 2.166 is the next downside target. First resistance is the 20 day moving average crossing at 2.574. Second resistance is the reaction high crossing at 2.838. First support is last Friday's low crossing at 2.313. Second support is the reaction low crossing at 2.166.

6 Things Successful Traders Have in Common

Gold closed higher on Wednesday but remains below the 38% retracement level of this year's decline. The low range close sets the stage for a steady to lower opening when Thursday's night session begins trading. Stochastics and the RSI remain bullish signaling sideways to higher prices are possible near term. If August extends last Friday's rally, April's high crossing at 1674.30 is the next upside target. If August renews the decline off February's high, the 75% retracement level of the 2010-2011 rally crossing at 1461.30 is the next downside target. First resistance is last Friday's high crossing at 1632.00. Second resistance is April's high crossing at 1674.30. First support is the 20 day moving average crossing at 1581.10. Second support is May's low crossing at 1529.30.

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Tuesday, June 5, 2012

Have Gold, Silver and Mining Stocks Bottomed?

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On Friday, the price action in gold caught the attention of most market participants as gold put in a monster move to the upside in light of risk assets such as the S&P 500 selling off sharply. In fact, gold futures rallied nearly $58 per troy ounce on Friday (+3.71%) while the S&P 500 Index sold off over 32 handles (-2.46%).

Monday saw some profit taking in gold and silver futures as Friday’s monster gains had to be digested. Short term traders were locking in profits, but overall the price action remains quite bullish at the moment. The gold miners remained extremely strong into the bell on Monday as buyers bid up prices in the afternoon to push them nearly 1.65% higher for the trading session.

Long time readers understand that I am a gold bull in the longer term and have been for quite some time. Unlike some gold bugs, I will discuss the downside in precious metals from time to time even though it generally fills up my email inbox with some rather rude and hate filled emails.

My view of gold and silver is that they are senior currencies. With that being said, I monitor the value of gold in U.S. Dollars and recognize that a stronger U.S. Dollar in the longer term is not necessarily bullish for gold. Yes both gold and the Dollar can rally together, but mutualistic price action generally does not last for long periods of time. Obviously I monitor the price action of the U.S. Dollar Index futures on a regular basis to help me gauge when the Dollar is at key turning points regarding.....Here is the entire article, charts and video.


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Bulls are Hopeful 81.36 is the Magic Support Number....Probably Not!

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The numbers just don't add up for the bulls as crude oil closed higher due to short covering on Tuesday as it bounced off the 87% retracement level of the 2011-2012 rally crossing at 81.36. The mid range close sets the stage for a steady opening when Wednesday's night session begins. 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 October's low crossing at 77.05 is the next downside target. Closes above the 20 day moving average crossing at 91.41 are needed to confirm that a low has been posted. First resistance is the 10 day moving average crossing at 87.96. Second resistance is the 20 day moving average crossing at 91.41. First support is Monday's low crossing at 81.21 and second support is quite a ways below that at last October's low crossing at 77.05.

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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 are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term. If July extends last week's decline, the reaction low crossing at 2.166 is the next downside target. Closes above the 20 day moving average crossing at 2.576 would confirm that a short term low has been posted First resistance is the 20 day moving average crossing at 2.576. Second resistance is the reaction high crossing at 2.838. First support is last Friday's low crossing at 2.313. Second support is the reaction low crossing at 2.166.

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Gold closed higher on Tuesday as it consolidates below the 38% retracement level of this year's decline. The mid range close sets the stage for a steady opening when Wednesday's night session begins trading. Stochastics and the RSI remain bullish signaling sideways to higher prices are possible near term. If August extends last Friday's rally, April's high crossing at 1674.30 is the next upside target. If August renews the decline off February's high, the 75% retracement level of the 2010-2011 rally crossing at 1461.30 is the next downside target. First resistance is last Friday's high crossing at 1632.00. Second resistance is April's high crossing at 1674.30. First support is the reaction low crossing at 1529.30. Second support is the 75% retracement level of the 2010-2011 rally crossing at 1461.30.

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NOAA Predicts a Near Normal 2012 Atlantic Hurricane Season

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On May 24, 2012, the National Oceanic and Atmospheric Administration's Climate Prediction Center said that, for the six month hurricane season beginning June 1, there is a 70% chance of 9 to 15 named storms in the Atlantic Basin, of which 4 to 8 may strengthen to hurricanes. Of those, 1 to 3 may become major hurricanes (Category 3, 4, or 5). During the hurricane season from 1981 through 2010, the Atlantic basin averaged 12 named storms and 6 hurricanes each year, 3 of which were major hurricanes.

As of June 1, 2012, there have been two named Atlantic Basin storms (Tropical Storms Alberto and Beryl).

map of NOAA predicts a near-normal 2012 Atlantic hurricane season, as described in the article text

Tropical storms and hurricanes can temporarily disrupt the U.S. oil and natural gas supply chain (producing fields, gathering, processing, refining, and transportation), especially in the Gulf Coast region. The U.S. Energy Information Administration's Federal Offshore Gulf of Mexico reporting region (GOM Fed) is a key component of U.S. crude oil and natural gas production.

map of U.S. natural gas marketed production, 2002-2011 and U.S. crude oil production, 2002-2011, as described in the article text

The GOM Fed region provided nearly one quarter of total U.S. crude oil production in 2011, the highest share among Federal offshore regions and second only to Texas among individual states. Driven by increasing volumes associated with deepwater and ultra-deepwater development activity, the GOM Fed region helped to reverse a decades-long decline in U.S. crude oil production in 2009. GOM Fed region production declined in 2010 and 2011, largely the result of suspended drilling activity following the Macondo oil spill. Exploration and development operations have since resumed, however.

The potential impact of hurricanes on U.S. natural gas supply is comparatively muted, as the GOM Fed region accounts for a relatively modest portion of total U.S. natural gas production. The GOM Fed region supplied about 8% of total U.S. marketed natural gas production in 2011, down significantly from a decade ago, when the region had an approximate one quarter share. The GOM Fed region's relative contribution has diminished as a result of both gradually declining offshore production and significant increases in Lower 48 output, due primarily to expanding shale gas developments in several areas of the country.

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Monday, June 4, 2012

Monday Mathem Chart and Live Video Analysis

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This week should be just exciting with the markets reaching extreme levels for bonds, gold, SP500, and crude oil. This morning’s video covers it in detail.

Pre Market Analysis Points....

* US dollar index in consolidation and also forming a mini head and shoulders pattern which if the neckline is broken points to lower prices for the dollar that may last 1-2 sessions.

* Gold and silver are both trading at resistance levels and are headline driven at this point. Anything could happen going forward so I remain on the side for now.

* Crude oil continues to show weakness but is now trading within a major support level. I am keeping my eye on the intraday charts for a reversal pattern to play a bounce/rally this week.

* Bonds continue to rise with record low yields… This shows there is real panic fear in the market and lower prices may continue for another week or two.

* The volatility index while elevated is still overall trading low. This means more downside is possible investors and baby boomers start to roll more of their money out of stocks and into bonds.

* SP500 sold down another 1% in futures trading after the closing bell which was very bearish. This morning we have seen the dollar index pullback and that has allowed the SP500 to recover the 1% post market drop on Friday.....Read the entire article and watch todays video.



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Crude Oil Bulls Get Some Help From 87% Retracement Level

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Crude oil closed higher due to short covering on Monday as it bounced off the 87% retracement level of the 2011-2012 rally crossing at 81.36. The high range close sets the stage for a steady to higher opening when Tuesday's night session begins. 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 October's low crossing at 77.05 is the next downside target. Closes above the 20 day moving average crossing at 92.14 are needed to confirm that a low has been posted. First resistance is the 10 day moving average crossing at 88.86. Second resistance is the 20 day moving average crossing at 92.14. First support is today's low crossing at 81.21. Second support is last October's low crossing at 77.05.

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Natural gas closed higher due to short covering on Monday as it consolidated some of last week's decline. The high range close sets the stage for a steady to higher 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 last week's decline, the reaction low crossing at 2.166 is the next downside target. Closes above the 20 day moving average crossing at 2.576 would confirm that a short term low has been posted First resistance is the 20 day moving average crossing at 2.576. Second resistance is the reaction high crossing at 2.838. First support is last Friday's low crossing at 2.313. Second support is the reaction low crossing at 2.166.

6 Things Successful Traders Have in Common

Gold closed lower on Monday as it consolidates some of last Friday's rally. The low range close sets the stage for a steady to lower opening when Tuesday's night session begins trading. Stochastics and the RSI remain bullish signaling sideways to higher prices are possible near term. If August extends last Friday's rally, April's high crossing at 1674.30 is the next upside target. If August renews the decline off February's high, the 75% retracement level of the 2010-2011 rally crossing at 1461.30 is the next downside target. First resistance is last Friday's high crossing at 1632.00. Second resistance is April's high crossing at 1674.30. First support is the reaction low crossing at 1529.30. Second support is the 75% retracement level of the 2010-2011 rally crossing at 1461.30.

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MLP's....The Retail Investor Can Level The Playing Field

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One my favorite oil and commodities trader is Dan Dicker of MercBloc. Today he is bringing it to our attention how the retail investor can level the playing field by taking advantage of the pull back in energy right now. We have always loved the MLP's whether the market is up or down. We just don't see a downside either way.



20 Survival Skills for the Trader

Sunday, June 3, 2012

Chevron Phillips Chemical Signs Letter to Study Iraq Plant

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Iraq and Chevron Phillips Chemical Co., a joint venture of Chevron Corp. (CVX) and ConocoPhillips (COP), signed a letter of intent to evaluate the feasibility of developing a petrochemical plant in the country, officials said.

The company would examine building a new facility and upgrading an existing Iraq owned petrochemicals factory in southern Basra province, Hanaa al-Husseini, a spokeswoman for the Industry and Minerals Ministry, said today in Baghdad.

Melanie Samuelson, a spokeswoman for Chevron Philips, said in an e-mailed statement that the company, with headquarters in The Woodlands, Texas, wants to assess “the feasibility of developing an integrated petrochemical complex.” Both Chevron Phillips and the ministry declined to give additional details, including cost estimates or dates for the project.

Read the entire Bloomberg article.


New Video: Detailed Commodities Analysis From Chris Vermeulen

Saturday, June 2, 2012

Crude Oil Bulls Take Brutal Beating on Jobs Report....Next stop $81.36!

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Crude oil closed lower on Friday following today's bearish jobs data, which suggest that we will likely see lower demand this summer. The low range close sets the stage for a steady to lower opening when Sundays evening session begins. 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, the 87% retracement level of the 2011-2012 rally crossing at 81.36 is the next downside target. Closes above the 20 day moving average crossing at 92.88 are needed to confirm that a low has been posted. First resistance is the 10 day moving average crossing at 89.64. Second resistance is the 20 day moving average crossing at 92.88. First support is today's low crossing at 82.29. Second support is the 87% retracement level of the 2011-2012 rally crossing at 81.36.

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Natural gas closed lower on Friday extending this week's decline. The low range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term. If July extends this week's decline, the reaction low crossing at 2.166 is the next downside target. Closes above the 10 day moving average crossing at 2.606 would confirm that a short term low has been posted First resistance is the 10 day moving average crossing at 2.606. Second resistance is the reaction high crossing at 2.838. First support is today's low crossing at 2.313. Second support is the reaction low crossing at 2.166.

6 Things Successful Traders Have in Common

Gold closed sharply higher on Friday following this morning's bearish jobs report. The mid range close sets the stage for a steady opening when Friday's night session begins trading. Stochastics and the RSI are bullish signaling sideways to higher prices are possible near term. Today's close above the reaction high crossing at 1601.40 confirms that a short term low has been posted. If August extends today's rally, April's high crossing at 1674.30 is the next upside target. If August renews the decline off February's high, the 75% retracement level of the 2010-2011 rally crossing at 1461.30 is the next downside target. First resistance is today's high crossing at 1632.00. Second resistance is April's high crossing at 1674.30. First support is the reaction low crossing at 1529.30. Second support is the 75% retracement level of the 2010-2011 rally crossing at 1461.30.

20 Survival Skills for the Trader
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