How You Can Minimize Trading Risk & Grow Capital During A Global Crisis

To minimize trading risk and grow capital during a global crisis is somewhat hinged on the answers to speculative questions. 

• How long will the Russia – Ukraine war last? 

• How high is the price of oil and gas going to go? 

• How quickly will central banks raise interest rates to counter high inflation? 

• What assets should I put my money into? 

Knowing what the Best Asset Now (BAN) is, is critical for risk management and consistent growth no matter the market condition. Buy the Dip or Sell the Rally? Let's start here with the DJI weekly chart

Just Like the Good Old Days....Crude Oil Down, Natural Gas Up

Crude oil closed down $1.05 a barrel at $83.00 today. Prices closed nearer the session low today and scored a bearish “outside day” down on the daily bar chart. The stronger U.S. dollar index weighed on crude oil prices today. The crude bears still have the solid overall near term technical advantage. There are still no early technical clues to suggest a market bottom is close at hand.

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Natural gas closed up 17.7 cents at $2.644 today. Prices closed near the session high again today and hit a fresh four week high. Short covering and bargain hunting were featured again today. Bulls have gained good upside near term technical momentum recently to suggest a market low is in place. Bulls and bears are now on a level near term technical playing field.

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Gold futures closed down $0.70 an ounce at $1,627.30 today. Prices closed nearer the session high today on some chart consolidation following recent gains. The key “outside markets” were bearish for gold today as the U.S. dollar index was higher and crude oil prices were lower. Yet, gold managed to have only small losses, which does suggest safe haven demand for gold is present. Gold market bulls have the slight near term technical advantage.

Check out our latest Video, Market Analysis and Forecast for the Dollar, Crude Oil, Gold, Silver, and the SP500

Elliot Warren: Demand Worries Smack Crude Oil Prices

Elliot Warren, Head Energy Options Trader for Kottke, says weak demand is what's really dragging down oil prices.



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ONG: Crude Oil Weekly Technical Outlook For Saturday January 21st

Crude oil's recovery attempt was limited at 102.06 last week and weakened sharply since then. As noted before, consolidation pattern from 103.37 or 103.74 is still in progress. Initial bias is on the downside this week and break of 97.70 will target 100% projection of 103.74 to 97.70 from 102.06 at 96.02 and below. though, we'd expect strong support from 92.52 cluster support (38.2% retracement of 74.95 to 103.74 at 92.74). to contain downside and bring rebound. On the upside, above 102.06 will bring retest of 103.74 resistance.

In the bigger picture, pull back from 114.83 was completed at 74.95 already and medium term rally from 33.2 is not finished yet. We'd tentatively treat rise from 74.95 as resuming of such rally. Sustained break of 114.83 will target 61.8% projection of 33.2 to 114.83 from 74.95 at 125.40. On the downside, though, break of 92.52 support will indicate that correction pattern from 114.83 is going to extend further with another falling leg to 74.95 and below before completion.

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

Gold Trend Forecast for the 1st Quarter of 2012

ONG: Weekly Fundamentals..... Geopolitical Tensions Drive Crude Oil Volatility

Geopolitical tensions have been directing the movement of oil prices since the start of the year. Sanctions against Iran in condemnation of its nuclear developments had sent oil prices higher. The US has imposed sanctions against Iran's central bank and it's highly likely that Japan and South Korea will reduce their imports of Iranian oil. The EU has in principle agreed ton an embargo on oil imports. 

However, an EU embargo on Iranian oil imports will likely be delayed for 6 months so that countries including Greece, Italy and Spain can find alternative supplies. Data from the European Commission indicated that these three countries accounted for 68.5% of EU imports from Iran in 2010. The news triggered a sharp selloff in oil prices on Thursday and Friday. In Nigeria, President Goodluck Jonathan will meet protesters in an attempt to end the 4 day strike which will affect the oil industry. Oil prices should continue to move with great volatility in coming months as long as geopolitical tensions remain uncertain.

The DOE/EIA released its monthly short-term energy report last week, suggesting the price of WTI crude oil would average about 100/bbl in 2012, up +5/bbl from the average price last year. For 2013, the agency expects WTI prices to 'continue to rise, reaching 106/bbl per barrel in the fourth quarter of next year". Concerning global oil demand/supply, the DOE/EIA expects the tightening of world oil markets would 'moderate in 2012 and resume in 2013'.

Oil demand will probably increase +1.27 mmb, or +1.44% y/y, to 89.38 mmb in 2012. This, however, represents a -0.14 mmb drop from the projection made in December. The DOE/EIA also introduced the demand forecast for 2013. During the year, consumption will climb +1.47 mmb, or +1.44% y/y, to 90.85 mmb. On the supply side, non-OPEC supply is expected to rise +0.91 mmb, or +1.76%, y/y to 52.76 mmb in 2012, followed by a +0.76 mmb, or +1.44%, increase to 53.52 mmb in 2013. The need for oil supply from the OPEC will be 30.30 mmb and 30.76 mmb in 2012 and 2013 respectively.

Here's more from ONG on natural gas, rig counts, gold and more!

PetroChina Third Quarter Net Beats Estimates

PetroChina Co.’s third quarter profit growth outpaced gains by rival China Petroleum & Chemical Corp. as higher crude oil prices helped counter refining losses at Asia’s biggest company by market value.

Net income rose 7.8 percent from a year earlier to 37.4 billion yuan ($5.9 billion), PetroChina said yesterday. That surpassed the 33.3 billion yuan mean estimate of six analysts surveyed by Bloomberg. Sinopec, as China Petroleum is known, said profit increased 3 percent to 20.2 billion yuan.

PetroChina, which gets almost three times the operating income from energy exploration than Sinopec, benefitted more from higher oil prices as it boosted output to meet demand in the world’s second largest economy. Chinese energy companies are adding oil and gas assets from Australia to North America to curb losses from selling fuels at state controlled prices.....Read the entire article.


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Oil Prices Higher on Ireland Debt Plan, Overnight Short Covering

Oil prices are higher this morning after European and global financial authorities agreed to save debt latent Ireland and protect Europe's wider financial stability. This short covering overnight consolidated some of this month's decline.

Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term. If January extends the aforementioned decline, the 62% retracement level of the August-November rally crossing at 79.24 is the next downside target. Closes above the 20 day moving average crossing at 84.60 would confirm that a short term low has been posted.

First resistance is the 20 day moving average crossing at 84.60
Second resistance is this month's high crossing at 89.10

Crude oil pivot point for Monday morning is 82.13

First support is last Wednesday's low crossing at 80.65
Second support is the 62% retracement level of the August-November rally crossing at 78.56


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Why Your World Is About to Get a Whole Lot Smaller: Oil and the End of Globalization

An internationally renowned energy expert has written a book essential for every American, a galvanizing account of how the rising price and diminishing availability of oil are going to radically change our lives. Why Your World Is About to Get a Whole Lot Smaller is a powerful and provocative book that explores what the new global economy will look like and what it will mean for all of us.

In a compelling and accessible style, Jeff Rubin reveals that despite the recent recessionary dip, oil prices will skyrocket again once the economy recovers. The fact is, worldwide oil reserves are disappearing for good. Consequently, the amount of food and other goods we get from abroad will be curtailed; long-distance driving will become a luxury and international travel rare. Globalization as we know it will reverse. The near future will be a time that, in its physical limits, may resemble the distant past.

But Why Your World Is About to Get a Whole Lot Smaller is a hopeful work about how we can benefit–personally, politically, and economically....from this new reality. American industries such as steel and agriculture, for instance, will be revitalized. As well, Rubin prescribes priorities for President Obama and other leaders, from imposing carbon tariffs that will increase competition and productivity, to investing in mass transit instead of car-clogged highways, to forging “green” alliances between labor and management that will be good for both business and the air we breathe.

Most passionately, Rubin recommends ways every citizen can secure this better life for himself, actions that will end our enslavement to chain-store taste and strengthen our communities and timeless human values.

About the Author
Jeff Rubin is the chief economist and chief strategist at CIBC World Markets. He was one of the first economists to accurately predict soaring oil prices back in 2000 and is now one of the world’s most sought after energy experts. He lives in Toronto.


Visit our Amazon store to purchase "Why Your World Is About to Get a Whole Lot Smaller: Oil and the End of Globalization"




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New Video: Hot Stocks in The Energy Sector

Stocks in the sector kick off the month with gains, based on higher oil prices and bullish economic data, as well as on Exxon Mobil's earnings. A joint venture in ethanol also is drawing attention. Steve Gelsi reports.



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Jeff Rubin: NOW is Time to Buy Oil

Fmr. CIBC World Markets Chief Economist Jeff Rubin on oil prices.

Oil Prices Endanger Recovery

In "The Buzz" CNN's editor at large discusses the ramifications of high gas prices during an economic comeback.

Fundamental Analysis For Energy Market

Friday, oil prices climbed as the U.S. economy released its housing data showing that it came in better than market expectations which aroused speculations back in the markets that the housing sector is finding its bottom. Investors focus on any U.S. housing data as this was the reason behind the global financial turmoil, so an improvement of data, means that the economy will start enhancing therefore increased demand on energy products especially as the U.S. is known as the world's biggest energy consumer.....Complete Story

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Before You Blame Speculators for Oil ETF Moves…Could You Be One?

From Tom Lydon at ETF Trends....

Oil prices are nowhere near steady, and investors are perplexed as they try to figure out why. Analysts believe that there is one thing that is creating these gyrations in shares prices and exchange traded funds (ETFs): the dreaded speculator. But before you get out your torches…could you be one, too? What’s behind the wild gyrations in oil prices? Market watchers believe it is the investors themselves, the so called speculators.....Complete Story

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US Moves to Shackle Oil Speculators

The solution to perceived market manipulation is overt market manipulation. That's what federal regulators are saying with Tuesday's announcement that they will consider curtailing "excessive speculation" in energy markets. The move comes in response to last year's spike in oil prices, which soared to a record $145 a barrel a year ago next week and pushed gasoline prices above $4 at the pump in many parts of the country. Since the start of this year.....Complete Story

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Oil Plunges 3% to Just Over $69

Oil prices fell more than 3% to $69 a barrel on Tuesday, pressured by a stronger U.S. dollar and as weak consumer confidence data hit equities. Crude for August delivery traded $2.15 lower at $69.34 a barrel, off its earlier eight month high of $73.38. The U.S. dollar rose against the euro, adding pressure to oil prices. A stronger dollar makes commodities denominated in the currency more expensive for investors.....Complete Story

Oil Prices Hit Reverse as Wall Street Slips

Oil prices fell Friday, mirroring losses on Wall Street, as traders took profits after earlier jumping above 71 dollars per barrel on news of fresh unrest in key crude producer Nigeria. New York's main futures contract, light sweet crude for delivery in August, shed 94 cents to 69.29 dollars a barrel. In London, Brent North Sea crude for August dipped 86 cents to 68.92 dollars. Wall Street shares sank at the open on Friday, one day after a rally, as investors locked in profits and turned cautious ahead of the weekend.....Complete Story

Crude Oil Declines As Stocks Fall

"Crude Oil Falls for a Second Day as U.S. Equities Decline"
Crude oil fell for a second day in New York as U.S. stocks declined on speculation that bank loan losses will increase. Oil fell as much as 4.2 percent after Mike Mayo, analyst at Calyon Securities, advised selling bank shares and International Business Machines Corp.’s purchase of Sun....Complete Story

"Venezuela to Develop Iran's Oil Fields"
Venezuela would participate in developing Iran's oil fields, according to a report released by Iran's Press TV website on Sunday. Venezuelan state oil company, Petroleos de Venezuela SA (PDVSA), signed a memorandum of understanding (MoU) to develop "17 small oil fields in Iran," the report said....omplete Story

"Oil Prices Slide In Line With Stock Markets"
Oil prices dropped more than a dollar on Monday after earlier bouncing above 54 dollars per barrel in London, as traders tracked fresh falls on global stock markets.
In London trade on Monday, Brent North Sea crude for delivery in May dived 1.16....Complete Story