Energy Sets Up Near Major Resistance - Breakdown Pending

Our research team believes Crude Oil and Energy, in general, has stalled near major resistance and maybe setting up a big downside move as the COVID-19 virus continues to roil regional and global economies.

The recent news that the COVID-19 virus cases have skyrocketed suggests further economic shutdowns may push oil prices below $35 ppb over the next few weeks and months. Our researchers believe Oil has already set up a resistance level near $42 and will begin to move lower as concerns about the economic recovery transition through expectations related to oil demand going forward. We believe the renewed global economic demand for oil will present a very real possibility that oil could collapse below $35 ppb over the next 30 days.

We believe this pending downside move in Crude Oil will set up a great trade opportunity in ERY, the Direxion Bear Energy 2x ETF. At this point in time, we are just waiting for the technical confirmation of this trade trigger. Once we receive confirmation from our price modeling systems, we believe ERY may rally 20% to 30% or more from current levels....Continue Reading Here.

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Where is the Top for Natural Gas?

We wrote a very telling research article on October 24th, 2019. We never published it because we had other articles scheduled to be published over the next few weeks in the queue and because our subscribers get our trade alerts before the general public. At this point, we are sharing that past article as well as some current research for Natural Gas that should be very interesting to you.

Pay very close attention to the original October 24th article, below, and our prediction that the $2.75 to $2.85 level would be a likely target for the upside price rally from the basing level below $2.30. Currently, Natural Gas is trading at $2.87 – reaching our initial target level.

If our research is correct, strong demand and limited supply globally may push Natural Gas well above the $3.20 to $3.40 level after a very brief pause happens near $3.00. In fact, Natural Gas may be getting ready to rally past 2018 highs ($4.93) if the situation presents itself for such an incredible price rally. What would it take for a rally like that to happen? Much stronger demand for natural gas because of an early, extreme winter and extended global demand.

Price reacts to supply/demand imbalances. In this case, if the demand far exceeds the supply capacities headed into the end of 2019, we could easily see Natural Gas rally above $4.00 very quickly. Could it rally even higher and take out the $5.00 level? Absolutely it could if the proper dynamics continue related to supply and demand globally.

Current Daily Natural Gas Chart

Remember to read the link from October 5th. We’ve been warning of this move for more than 60+ days and have authored multiple research posts attempting to keep our followers aware of this setup. This trade setup was telegraphed for us many months ago. All you had to do was follow our research and stay aware of the trends as this momentum base setup in October near $2.25.

Natural Gas moved higher by nearly 2% on October 24th as our researchers predicted nearly a month ago. This incredible momentum base below $2.30 seems to be a very strong support level for Natural Gas. We believe this next rally may be bigger than the last rally which reached a high near 2.70. Our Fibonacci price modeling system is suggesting a target price of $2.95 to confirm a new upside price trend. This means the price would have to rally more than +26.5% from current levels to confirm a potentially much bigger upside price move. Can you imagine seeing Natural Gas climb to above $4.50 again – like last year?

Near the end of October 2018, Natural Gas began an upside price move that really excited investors. The first upside price leg began in mid-September, near $2.75 and rallied to a level near $3.35 – a +21.6% upside price move. After a brief 12 to 15 day pause, another price rally began in early November 2018 near $3.23 and continued very aggressively over the next 11+ days to rally up to $4.93 – a +57% rally.

We issued a natural gas trade using UGAZ to members and this week we locked in 38.7% profit on a portion of our position and there is still a lot of upside potential left.

Is the same type of price advance could be setting up for an early November price rally from the $2.30 level to somewhere above $3.50? This would result in a +50% price rally from recent lows without using any leverage which would be just amazing.

October 5, 2019: Natural Gas Reloads for Another Price Rally

Previous Natural Gas Forecast Daily Chart

Our proprietary Fibonacci price modeling system is suggesting the $2.95 price level is critical for any further upside price action to continue above $3.00. The price must cross above the $2.95 level on a strong closing price basis before we could consider any higher price levels to become valid. Our researchers believe that suggests the $2.75 to $2.85 level becomes a very real upside price target for skilled traders to pull some profits and protect any open long positions.

Previous Natural Gas Forecast Weekly Chart

This Weekly Natural Gas chart highlights our Fibonacci price modeling system’s results and the Bullish Trigger Level near $2.95 (The GREEN LINE). Pay very close attention to how quickly Natural Gas moved higher in November 2018. If another move happens like that in 2019, we could be setting up for a big gap higher followed by about 10 to 15+ days of incredible upside price action.

Currently, the price of Natural Gas has crossed the Daily Fibonacci price modeling system’s Bullish Price Trigger level near $2.29. This suggests that we are now in a confirmed bullish trend as long as the price stays above the $2.26 level on a closing price basis. We would expect a continued moderate price rally from these levels to move price away from the momentum base level over time – before any breakout upside price move may begin.

This could become one of the best trades, besides Silver and Gold, headed into the end of 2019. Get ready for some big volatility in Natural Gas as winter weather takes over much of North America.

November will be the month of breakouts and breakdowns and should spark some trades. I feel the safe havens like bonds and metals will be turning a corner and starting to firm up and head higher but they may not start a big rally for several weeks or months.

October was a boring month for most major asset classes completing their consolidation phase. Natural gas was the big mover in October and subscribers and I took full advantage of the bottom and breakout for a 15-22% gain and its till on fire and trading higher by another 3% this week already.

If you like to catch assets starting new trends and trade 1x, 2x and 3x ETF’s the be sure to join my premium trade alert service called the Wealth Building Newsletter.


Chris Vermeulen
The Technical Traders

Natural Gas Sets Up Another Buying Opportunity

Recently, we warned that Natural Gas may set up another opportunity for traders to buy into a support zone below $2.70 with a selling range near or above $3.00. Our upside target zone is between $3.25 and $3.45. The price of Natural Gas has recently fallen below $2.69 and we believe this could be the start of a setup for skilled traders to identify key buying opportunity in preparation for a quick +8% to +15% upside swing.

Historically, March and April have been pretty solid months for Natural Gas. Let’s go over the historical data using three different seasonality charts which all point to higher prices.

Taking a look at the data, above for both March and April it appears we should have a positive price outcome over the next 20+ trading sessions. Thus, we can determine that the likelihood of a positive price swing between now and the end of April is highly likely.

When we take a look at the chart data to see how our BUY and SELL zones are setting up, it becomes clear that any opportunity to BUY into the lower support channel, with a moderate degree of risk, could result in a very nice profit potential of between $0.35 to $0.70 on data that supports the Bullish potential as a 200%~220% advantage over downside potential.

Take a look at the data that we are presenting and try to understand that these types of historical price triggers are not foolproof, yet they do provide a clear advantage. They allow us to see if and when there is any type of advantage to our decision making and if we can identify any real opportunity for future success. We believe any further downside price activity in Natural Gas will result in additional opportunities for Long trades with $2.45 being our absolute low entry target. Our upside exit target would be any level above $2.95, or higher, and our ultimate target objective would be $3.15 or higher. Our last trade in natural gas (UGAZ) gave us 30% return in just two weeks in February!

This could be another opportunity for a trader to target a quick 8% to 15% swing trade in Natural Gas over the next 20+ days. Time to put Natural Gas on your radar again!

Are you ready for this next move? Want to know how we can help you find and execute better trades? Visit The Technical Traders Right Here to get our, technical indicators, market analysis, daily videos and trade alerts.

Chris Vermeulen
Technical Traders Ltd.

Here's Why it Might Be Time to Take Natural Gas Seriously

Last week we identified a prime chart pattern in natural gas that matched our technical analysis and cycle price prediction system. This type of setup is our favorite as it leads to quick juicy profits and the last setup we had like this in natural gas I think we pocketed 74% return in 12 days using the ETF UGAZ.

Charts speak for themselves so let me show you what myself and our subscribers are into right now. We are long UGAZ and today (Wed March 7th) we locked in 9.1% profit with UGAZ on half the position. Our stops are now at break even, and we are looking for the final blast off stage, which may or may not happen, but we are ready!

We share this analysis so that you have some real predictive data to work with through March. We are not always 100% accurate in our modeling systems predictions or accuracy, but you can spend a little time reading our research reports through most of this year to see how we’ve been calling these market moves since well before the start of 2018. Visit the Technical Traders here to see what we offer our subscribers and learn how we can assist you in finding great trading opportunities. In fact, pay attention to the market moves as they play out over the next few weeks to see how accurate our research really is. We’re confident you will quickly understand that we provide the best predictive analysis you can find and are proud to offer our clients this type of research.

Get ready for this move and don’t miss the future ones. We’ll keep our members aware of all of these moves going forward so they can take advantage of these opportunities to generate profits.

Hope to see you in our member’s area, as well, where we can share more data and research to help you profit from these moves – visit The Technical Traders Right Here to learn more.

Crude Oil Retesting $30 Dollars or Lower?

Recently, Light Crude has seen a dramatic 35%+ increase in value.  As the current price continue to flirt with $40 per barrel, the likelihood of a further price rise is on everyone’s mind.  With recent lows near $26 per barrel, what is the possibility that oil will form a base above $30 and attempt a rally?

Historically, the 2009 low price for oil was $33.20.  This level should be viewed as a key level of support for current price action.  The recent price rotation below this level is a sign that oil prices are under extreme pressure in the current economic environment with a supply glut and slower than expected demand.

It is my opinion that the price of oil will continue to reflect the supply/demand aspects of the global markets in relation to global economic activity.  Thus, my analysis is that Oil will likely attempt to retest support, near $30 or below, in the immediate future in direct relation to continued supply production in conjunction with slower global demand.

(Baltic Dry Index Chart – LongTerm)

The BDI Index continues to attempt to push to new lows.  This is a strong indication that global exports and international demand from consumers and business is continuing to diminish.

Crude Oil Analysis & Trade Signals: www.The Gold & Oil Guy.com

(DOWT – Transportation Chart)

Even though the DOW Transportation Index has risen recently, the current direction is decisively bearish in indicates the next level of support is near 6265 – clearly 1400 points below current levels.

(Baltic Dry Index Recent)

The longer the BDI continues to push to new lows, the more likely we are to see continued contraction in demand for commodities and global exports.  Thus, with the continued supply production throughout the globe and continued global contraction, one could expect that Oil prices will continue to be under pressure globally.

The simple mechanics of the equation are that certain ME and foreign countries require continued income from oil production/sales.  As the continued decline in Oil prices creates economic pressure, these countries have little alternative but to continue producing and selling as any price to feed their need for dollars.  This creates a mechanism that propels a vicious cycle or over production and sales in an attempt to generate dollars that are desperately needs to fund a relatively mature economy.

As all things are in a constant state of flux, it become important to understand that price rotation in the Oil market will likely continue between $28 and $42 for a period of time.  This is really a traders market in the sense that a nearly rotation level this large, in percentage relation, is available for all traders.  Be cautious of rallies as they may be short-lived. I expect a number of weeks of rotation near $36 ppb followed by a lower price rotation back to near $25 ppb between April 5th and May 5th.

After that price rotation lower, then I expect one of two targets to be tested, $21 ppb or $37 ppb.  It all depends on how the global markets are performing in a month or two.

(CL Chart)

(XOI Chart)

Right now, expect continued price rotation between $42 ppb and $28 ppb till shortly after April 5th.  Then expect much larger price rotation till after May 5th.  At that point, we’ll have to see how the global economic factors are playing out to make further price expectations.

I expect there to be some big trades around crude oil for both short term swing trades and long term trend trades but the market just is not yet here.

Learn & Trade With My Daily Video Analysis & Trades, visit www.The Gold & Oil Guy.com

Chris Vermeulen

So....Your nervous about trading overnight options trades? Don't be, and here's how!

You've seen us talking about a new Options strategy that John Carter was working on recently...and he is finally sharing it with us.

Video: My Favorite Way to Trade Options on ETFs

This strategy is the "sleep at night as you trade options" strategy. And we ALL need that!

Here's just a taste of what John shows you in this video:

*  Why trading options on ETFs cuts your risk so you can sleep at night

*  How you can profit with ETFs from the unexpected move in the dollar

*  Why you avoid the games high frequency traders play by trading ETFs

*  Why most analysts have the next move in the dollar wrong and how to protect your investments

*  What are some of the markets that will be impacted by the dollars next move

Here's the link to watch the video again

Enjoy the video,
Ray C. Parrish
aka the Crude Oil Trader


Reserve your seat now for John's next FREE webinar "Why You Should Trade Options on ETF's"....Just Click Here!

Can Natural Gas Prices Move Higher From Here?

Natural gas futures in the June contract finished down 10 points this week to close around 4.65 as I’m recommending a long position in this contract placing my stop loss below the 10 day low which stands at 4.50 risking around 15 points or $1,500 per contract as the trend is still higher in my opinion as the risk reward situation is highly in your favor as we enter the demand season of summer. Natural gas prices have been in a bull market for quite some time and if you read some of my previous blogs several months back when prices were in the low $3 I was recommending if you have deep pockets and a longer term horizon to buy natural gas as prices were extremely cheap due to the fact of large supplies, however we had an extremely cold winter which reduced supplies dramatically and I do think natural gas prices will be sharply higher from today’s level in the next year as prices have bottomed out in my opinion. As a trader I focus on today and tomorrow only so when I can buy a natural gas contract and risk 1,500 I will take that trade even if I don’t believe the trade. Natural gas prices are trading above their 20 and 100 day moving average telling you that the trend is higher after we consolidated in the month March after the big run up in early winter as prices seem to be resuming back up to the upside so play this market to the upside using my stop loss and proper risk management.
TREND: HIGHER
CHART STRUCTURE: OUTSTANDING

What High Frequency Trading Firms Don't Want You to Know

Gold futures in the June contract settled higher for the 2nd consecutive trading session cracking $1,300 an ounce after hitting new recent lows yesterday before the Ukrainian situation was stirred up once again this could be a problem for months to come as gold is held major support 1,280 currently I’m not recommending a position in this market as the trends choppy but keep an eye on this chart and wait for better chart structure to develop. Gold futures are trading above their 20 and 100 day moving average telling you that the trend is higher despite the fact that we are right near recent lows as the market remains choppy but with the stock market rallying recently investors sought no reasonable gold but the money flow came back into this market as political tensions are heating up. If your bullish the gold market my recommendation would be to buy a futures contract at today’s price of 1,300 while placing your stop below yesterday’s low of 1,264 risking around $3600 but the true breakout will not occur until prices break the April 14th high of 1331.
TREND: SIDEWAYS
CHART STRUCTURE: POOR

Coffee futures in the July contract are ending the week on a sour note finishing down around 500 points to close around 209.70 while still trading above its 20 and 100 day moving average hitting new contract highs earlier in the week settling down about 500 points for the trading week in New York. I’ve been recommending a long position in coffee however the chart structure is very poor at this time and this trade is only for people with deep pockets and large trading accounts as its extremely volatile with high risk but I do believe that prices are headed higher and on any further weakness I would take advantage and get long the futures or a bull call option spread as the crop in central Brazil was absolutely devastated and I’m still hearing reports from some of my contacts down in Brazil that higher prices are coming as we will see an estimate on how many bags will actually be produced in the coming weeks and they are telling me that production is much lower than what currently is anticipated so only time will tell but I do believe prices are headed higher. TREND: HIGHER
CHART STRUCTURE: TERRIBLE

Today's commodity summary is brought to us by our trading partner Mike Seery....Click Here to Get More Calls on Commodities


Sign up for this weeks Free Trading Webinar....Just Click Here!

Is it Too Late to Get into this Monster UNG Trade?

Natural gas looks to be breaking out and it has John's attention. With monthly and weekly charts breaking out he is looking at futures contracts having the possibility of easily moving up to the 4.48 level which means there is a lot of options open for us options traders. And if you have been following us this week you know John is on a roll.

John has put together a detailed free video to show us just exactly how to play UNG and natural gas while limiting our risk, just click here to watch "Is it Too Late to Get into this Monster UNG Trade?"


And if you haven't had a chance to see it yet take a few minutes to watch John's wildly popular webinar replay....."Nine Reasons Why You Should Trade Options on ETFs"

See you in the markets, the natural gas markets!

Ray @ The Crude Oil Trader 

Crude Oil Bulls Gain Momentum Despite "Weak" Washington News on Syria

October crude oil closed higher on Thursday and poised to extend the rally off Tuesday's low. The high range close sets the stage for a steady to higher opening when Friday's night session begins. 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 106.69 are needed to confirm that a short term top has been posted. If October renews this summer's rally, weekly resistance crossing at 114.83 is the next upside target. First resistance is last Wednesday'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 106.69. Second support is the reaction low crossing at 103.50.

6 Things Successful Traders Have in Common

October Henry natural gas posted a key reversal down on Thursday and closed below the 10 day moving average crossing at 3.591 signaling that a short term top might be in or is near. The low range close sets the stage for a steady to lower opening on Friday. 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 rally off August's low, the 50% retracement level of the May-August decline crossing at 3.842 is the next upside target. Closes below the 20 day moving average crossing at 3.489 would confirm that a short term top has been posted. First resistance is the 38% retracement level of the May-August decline crossing at 3.680. Second resistance is the 50% retracement level of the May-August decline crossing at 3.842. First support is the 20 day moving average crossing at 3.489. Second support is August's low crossing at 3.154.

How to Trade Small Cap Stocks and 3x ETF's Current

The September S&P 500 closed higher on Thursday and above the 20 day moving average crossing at 1656.33 confirming that a short term low has been posted. 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 bullish signaling that sideways to higher prices are possible near term. If September extends the rally off August's low, the reaction high crossing at 1667.00 is the next upside target. If September renews the decline off August's high, the 62% retracement level of the June-August rally crossing at 1611.47 is the next downside target. First resistance is today's high crossing at 1658.00. Second resistance is the reaction high crossing at 1667.00. First support is August's low crossing at 1625.00. Second support is the 62% retracement level of the June-August rally crossing at 1611.47.

Statistical Edge Floor Traders Use to Beat The Market

October gold closed lower on Thursday and below the 20 day moving average crossing at 1367.20 confirming that a short term top has been posted. The low range close sets the stage for a steady to lower opening when Friday's night session begins trading. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term. If October extends today's decline, the reaction low crossing at 1351.60 is the next downside target. Closes above the 10 day moving average crossing at 1397.50 would temper the near-term bearish outlook. First resistance is last Wednesday's high crossing at 1432.90. Second resistance is May's high crossing at 1489.00. First support is the reaction low crossing at 1351.60. Second resistance is August's low crossing at 1272.10.

Ready to start trading crude oil? Start right here....Advanced Crude Oil Study – 15 Minute Range

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!

Crude oil closes below the 20 day moving average, does this confirm a near term top is in?

September crude oil closed lower on Tuesday and below the 20 day moving average crossing at 104.82 confirming that a short term top has been posted. The low range close sets the stage for a steady to lower opening when Wednesday's night session begins. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term. If September extends the decline off July's high, the 38% retracement level of the April-July rally crossing at 100.27 is the next downside target. If September renews the rally off April's low, weekly resistance crossing at 109.45 is the next upside target. First resistance is July's high crossing at 108.93. Second resistance is weekly resistance crossing at 109.45. First support is today'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 unchanged on Tuesday. The mid range close sets the stage for a steady opening when Wednesday's night session begins trading. Stochastics and the RSI are turning bearish hinting that a short term top might be in or is near. Closes below the 20 day moving average crossing at 1665.30 would confirm that a short term top has been posted. If September renews the rally off June's low, upside targets will now be hard to project with the next trading into uncharted territory. First resistance is last Tuesday's high crossing at 1695.50. Second resistance is unknown with September trading into uncharted territory. First support is the reaction low crossing at 1666.00. Second support is the 20 day moving average crossing at 1665.30.

October gold closed lower on Tuesday. The high range close sets the stage for a steady to higher opening when Wednesday'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 1286.50 would confirm that a short term top has been posted. If October extend the rally off June's low, the reaction high crossing at 1395.20 is the next upside target. First resistance is last Wednesday's high crossing at 1348.00. Second resistance is the reaction high crossing at 1395.20. First support is the 20 day moving average crossing at 1286.50. Second support is July's low crossing at 1208.50.

September Henry natural gas closed lower on Tuesday as it extends this decline off May's high. The low range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term. If September extends the aforementioned decline, January's low crossing at 3.350 is the next downside target. Closes above the 20 day moving average crossing at 3.656 would confirm that a short term low has been posted. First resistance is the 20 day moving average crossing at 3.656. Second resistance is July's high crossing at 3.833. First support is today's low crossing at 3.418. Second support is January's low crossing at 3.350.

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Have the crude oil bears taken the clear advantage?

September crude oil closed slightly lower on Friday as it extends this week's decline. The mid range close sets the stage for a steady to lower opening when Monday's night session begins. 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 104.15 would confirm that a short term top has been posted. If September renews the rally off April's low, weekly resistance crossing at 109.45 is the next upside target. First resistance is last Friday's high crossing at 108.93. Second resistance is weekly resistance crossing at 109.45. First support is the 20 day moving average crossing at 104.15. Second support is today's low crossing at 103.90.

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The September S&P 500 closed lower due to profit taking 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 overbought and are turning neutral to bearish hinting that a short term top might be in or is near. Closes below the 20 day moving average crossing at 1657.12 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 next trading into uncharted territory. First resistance is Tuesday's high crossing at 1695.50. Second resistance is unknown with September trading into uncharted territory. First support is the reaction low crossing at 1666.00. Second support is the 20 day moving average crossing at 1657.12.

Start trading with our free "Trend Jumper" software

August 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 overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term. If August extend the rally off June's low, the reaction high crossing at 1394.00 is the next upside target. Closes below the 20 day moving average crossing at 1277.50 would confirm that a short term top has been posted. First resistance is Wednesday's high crossing at 1348.70. Second resistance is the reaction high crossing at 1394.00. First support is the 20 day moving average crossing at 1277.50. Second support is June's low crossing at 1179.40.

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August Henry natural gas closed lower on Friday as it extends 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 August extends this week's decline, the reaction low crossing at 3.546 is the next downside target. If August renews the rally, the reaction high crossing at 4.003 is the next upside target. First resistance is last Thursday's high crossing at 3.835. Second resistance is the reaction high crossing at 4.003. First support is the reaction low crossing at 3.546. Second support is January's low crossing at 3.365.

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Is Natural Gas Ready To Rally?

By: Chris Vermeulen at The Gold & Oil Guy.com

Natural gas (UNG) has recently caught my attention. While it was in a significant downtrend for the better part of a year it has recently been consolidating right under the $20 level. A look at the daily chart shows a long move down and then recently a sideways consolidation pattern. While this is typically a continuation pattern I am beginning to believe think that the next move may be up rather than an extension of the previous down trend.

* Over the last two weeks there been significant support above $18 and significant volume.

* The $20/$20.50 level has been tested multiple times and the more tests it undertakes the more likely it is to break.

* Both the 20 day and 50 day moving averages have turned upwards and UNG is trading above both.

If we zoom in a bit and take a look at the hourly chart we are presented with two scenarios

1. The rising wedge holds and UNG breaks through the $20 – $20.50 resistance level on high volume and a new long term up trend is produced

2. The head and shoulders pattern within the wedge breaks downwards and the downtrend resumes

I’m leaning towards option one but will be waiting for a breakout confirmed with volume in either case.

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Natural Gas Pipeline Capacity Additions in 2011

The U.S. Energy Information Administration estimates that U.S. natural gas pipeline companies added about 2,400 miles of new pipe to the grid as part of over 25 projects in 2011. New pipeline projects entered service in parts of the U.S. natural gas grid that can be congested: California, Florida, and parts of the Northeast (see map above). Only a portion of this capacity serves incremental natural gas use; most of these projects facilitate better linkages across the existing natural gas grid.

By convention, the industry expresses annual capacity additions as the sum of the capacities of all the projects completed in that year. By this measure, the industry added 13.7 billion cubic feet per day (Bcf/d) of new capacity to the grid in 2011. The six largest projects put into service in 2011 added 1,553 miles and about 8.2 Bcf/d of new capacity to the system. Much of this new capacity is for transporting natural gas between states rather than within states. Golden Pass, Ruby Pipeline, FGT Phase VIII, Pascagoula Expansion, and Bison Pipeline projects added 6.1 Bcf/d, or about 80%, of new state to state capacity.

Natural gas pipeline capacity additions in 2011 were well above the 10 Bcf/d levels typical from 2001-2006, roughly the same as additions in 2007 and 2010, but significantly below additions in 2008 and 2009 (see chart below). Capacity added in 2008 and 2009 reflected a mix of intrastate and interstate natural gas pipeline expansions, related mostly to shale production, liquefied natural gas (LNG) terminals, and storage facilities.

Just click here for your FREE trend analysis of FCG, the Natural Gas ETF

How Cheap is Natural Gas?

How cheap is natural gas? The EIA tells us winter (November-March) natural gas futures prices are near their lowest levels since 2001-2002.

The average natural gas futures price for the upcoming winter is less than $4 per million British thermal units, the lowest level entering the winter since 2001-2002. The so called "winter strip," the average natural gas futures price for the contract months November through March as settled on the New York Mercantile Exchange is a closely followed measure of market participants' price expectations.

In markets such as New England and California, where natural gas prices often set on peak, wholesale power prices, the NYMEX winter strip for natural gas also can influence expectations for forward wholesale power prices.

Source: U.S. Energy Information Administration, based on Bloomberg, L.P.
Note: October 20 was selected because it represents a date near the start of the natural gas winter heating season yet still has information for five months of the upcoming winter's natural gas NYMEX future's strip.


These prices do not reflect expectations for the cost of transporting natural gas from Henry Hub to downstream market locations. The Henry Hub, in Erath, Louisiana, is the physical delivery location for the NYMEX natural gas futures contract. Sabine Pipeline is the operator of the Henry Hub. 

Just click here for your FREE trend analysis of UNG, the Natural Gas ETF

Do You Really Know How To Trade Ticker USO?

Markets are closed so let's talk shop. Here is a great article from our friends at Wolf Option Trading. Let's see how they trade the USO contango and how to partially offset it.......

The United States Oil ETF, LP (USO) is a twin of The United States Natural Gas ETF, LP (UNG), a futures based ETF that encounters issues with contango. If you are investing in futures based ETFs you should already be familiar with the issue and know how it impacts the funds. Thereby, I am not going to go into great detail about the pitfalls, but simply talk about it briefly.

USO owns crude at $85 and by this time next year the futures are pricing crude at $90 or roughly 6%. If all remains the same, this means that anyone buying USO today will not make money and instead lose money, if oil stays below $90. A year of losing money unless prices go up by more than 6% is never fun.

The bright side of this dark oily substance has many folds. Since oil is denominated in US dollars, you have traders that use it as a dollar hedge trade, bad for oil prices going up when a flight to safety is occuring. However, the world will not always live in fear and when it stops, then the trades get reversed and oil and USO then will go up. Oil has many more types of traders (aside from actual fundamental supply/demand folks) such as inflation hedgers, gold/oil ratio folks, oil/natural gas ratio folks, brent/wti ratio folks and a good amount more I am probably neglecting to mention. Fundamentally, the case for higher oil prices is strong and only further economic weakness would cause prices to go substantially lower.

It is likely oil prices will be much higher in the future than $85, but for folks buying USO they have to factor in the amount of contango they will face in order to see if it is a wise time to buy and hold currently. My take is that is probably early to buy crude at $85 and speculate that it will be above $90 by this time next year. There could be a better entry for a buy and hold investor.

However, everyone always has that itch to be more aggressive or look for more bullish things than may exist. I am not immune and it takes a lot of self discipline to be more strategic and wait for better opportunities.

The only easy way to partially offset contango is by being a net seller of options. Many options strategies are available that allow you to be a net seller of options while being bullish on the underlying instrument. Probably the most attractive strategy in my opinion is selling puts greater than 5% OTM and buying an ATM call spread.

For USO, January 2013 options are the only ones available to express a view past April 2012. January 2013 $25 put options are roughly 32% OTM but fetch a net credit of $2.45. The $34-45 January 2013 call spreads would cost $3.49. A net debit of $1.04.

The trade essentially would get you bullish on oil at $57 without factoring in contango. However, if one assumes that contango would be 15% (random) then one would be long oil at $70. The call spread gives one upside in oil prices up to $115 before getting called away from the trade if there was no contango. If one were to factor in a 15% contango rate, then oil prices would have to be $132 to get called away.

Total profits on the trade would be very high if one were to get called away at $45. The returns against total cash involved in the trade would be $9.96 net profits against a $1.04 net debit. However, that can be deceiving as margin requirements would be higher than the net debit but those vary across brokerage firms. The MVAR would be the better calculation and that would be the cost average one would be assigned USO at. $26.05 is the cost average of the total trade ($1.04 net debit added onto the $25 short puts) and a $9.96 net profit / $26.05 would still get one a 38.24%.

Overall, the trade is a good one for people speculating on much higher oil prices than $85 in a year's time, yet doesn't force one to take on shares at current prices.

Posted courtesy of Wolf Option Trading

Disclosure: The author does not have positions in any stocks mentioned, but may initiate a long position in USO over the next 72 hours.

Where Should You Be Playing Crude Oil?

For most retail traders trading crude oil and natural means using tickers like the popular ETF's like USO, OIH, UNG or DIG. But one often over looked company that has been the darling of our hedge fund is NOV, National Oilwell Varco. As the leader in oil rig production for many years through both organic growth as well as Merger and acquisition activity National Oil Varco has stay above support levels for some time giving us safe and consistent profitable swing trades.

One tool we use to watch the trend in NOV is our Smart Scan Chart Analysis technology. And as of this morning [12-6-10] our Smart Scan Analysis still confirms that a strong uptrend is in place for NOV and that the trend remains positive longer term. As always you should trade this strong uptrend with tight money management stops. This kind of rating indicates that NOV is being driven by commercial traders and insiders.

NOV scored +100 on a scale from -100 (strong downtrend) to +100 (strong uptrend). Here is how NOV rated on just a few of our indicators.

+10......Last Hour Close Above 5 Hour Moving Average
+15......New 3 Day High on Friday
+20......Last Price Above 20 Day Moving Average
+25......New 3 Week High, Week Ending Nov. 27th
+30......New 3 Month High in November
+100.....Total Score

Here is a preview of our MarketClub Trade Triangle Chart Analysis and Smart Scan technology system



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Three Ways to Profit From the Rebound in Natural Gas Prices

I love autumn. The leaves start to turn color, and the first hint of winter is invigorating. It is also a great time to peruse each of the financial markets for the shorter term, seasonal trades that are always lurking, if you know where to look, that is. One place that's worth looking at right now is the global currency markets, where a major war is currently being waged. As part of the so called "race to the bottom," the U.S. dollar is down 14% since June. This drop in the greenback has come at a time when a major bull market in commodities has broken out everywhere in the world.

Gold, silver, wheat and corn have all recently achieved multi year highs. Cotton just hit its highest price in 140 years. There has been an exception, however a headline commodity that's been left behind. Indeed, this particular commodity has been in decline for six months, dropping almost daily. But that's about to change. As we move deep into fall, the leaves on the trees will change color, die, and then fall to the ground. But the commodity in question will return to the land of the living, and will head for high ground, generating windfall profits for those with the courage to make their move right now. I'm talking about natural gas.

Natural Gas Numbers
I am a Contrarian investor by nature. So it's no surprise that some of my biggest gains as a professional trader came after I bought something that was so far out of favor that only a lunatic would've followed my lead. I love those trades. Right now, natural gas is out of favor. So out of favor, in fact, that people do not realize the true value of what it represents in the U.S. market. The spot price of a cargo of liquefied natural gas, or LNG, is around $14 per thousand cubic feet (MCF). In the United States, the same British Thermal Unit (BTU) of energy in the form of natural gas is priced around $3.50 per MCF.

The drop in natural gas prices in the U.S. market was so precipitous that, in August 2009, the weekly average price was $2.72 per MCF. I love price differentials like this, because I know that a capitalist will find a way to arbitrage the difference. Let's do some quick BTU conversions so that you can see what is happening here. If you take a barrel of crude oil, and divide it by natural gas equivalent BTUs, you would find that the ratio is 6-to-1.

What that tells us is that one barrel of oil is equal to 6,000 cubic feet (MCF) of natural gas. When you buy LNG on the spot market, it is priced as an equal with a plus or minus differential to crude oil. However, in the U.S. market, that same BTU value of natural gas is currently discounted......Read the entire article.


Gold, Oil & Index ETF Trading Analysis

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Natural Gas Catches a Bid as the U.S. Drowns in Supply

From guest blogger Trader Mark.....

On your mark... get set.... speculate! Since commodities have little to do with actual supply and demand in the physical market (as the world swims in oil, and the U.S. in natural gas), and everything to do with the supply of fiat currencies chasing physical assets, let us see if Bernanke can cause natural gas to take off. This has been the one huge laggard of the year, as nat gas is difficult to transport and hence reflects the domestic economic situation more than most other commodities. The commodity has spiked the past 2 days and the ETF (UNG) now sits at $6, just below the 50 day moving average. With oil peaking it head over its yearly highs Tuesday, speculators are in desperate search to find the next hot thing, as driving cotton and sugar limit up every day for 3 months in a row has gotten boring. The performance of natural gas has not just been bad, but indeed horrid when you consider it is priced in dollars just like every other commodity!

For economic reasons, energy is the most important commodity to watch, because while not everyone is going to take a hit if silver jumps $2 a day... we're all going to enjoy the fruits of Bernanke's labor if nat gas starts surging (for no fundamental reason) and oil can go on an early 2008-like rampage.

If this does happen, let us prepare for the April 2011 Congressional hearings where we drag the "Big Oil" CEOs up to Capital Hill and watch the politicos berate them publicly for "causing" prices to jump (while meeting with them privately to accept campaign donations) despite the "fantastical economic recovery"....

Meanwhile Bernanke will be skipping in his office a few buildings over sporting the Family Circus "Not Me" T-shirt.

Trader Mark will be launching a mutual fund October November 2010. He is a self taught private investor who operates the website Fund My Mutual Fund a daily mix of market, economic, and stock specific commentary.

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UNG: Why I Consider This ETF a Frightening Investment

From overleveraged Delta Petroleum, to overhyped Houston American Energy, to over the hill Energy Conversion Devices, there's no shortage of spooky investments in the energy sector. These are all relatively small companies, though, and unlikely to draw in space monster sized amounts of money.

For me, the most terrifying investment vehicle in the space is an ETF that has vaporized untold amounts of wealth since some mad scientists of Wall Street brought it to life in 2007. I'm talking about the United States Natural Gas Fund (UNG) exchange traded fund.

The ETF's popularity is easy enough to understand. Like the SPDR Gold Trust (GLD) or the Powershares DB Agriculture Fund (DBA), UNG provides investors a way to bet on the direction of a commodity (or basket of commodities, in the case of the agriculture fund) without having to accept company risk, dabble in futures contracts, or take delivery of a silo full of grain.

With commodities increasingly viewed by investors as an asset class, such funds are all the rage with pension funds, hedge funds, and retail investors alike. UNG trades more than 20 million shares daily, or well over $100 million by dollar volume. The liquidity here is tremendous, keeping the fund price closely in line with daily net asset value. Nothing frightening so far, right?

The problem with UNG, as well as countless other ETFs that invest in near month futures contracts, is that the fund's value gets chewed up like a zombie victim as the contracts get rolled from month to month. Compounding this issue of "roll yield" is that the larger the fund gets, the harder it gets to nimbly exit expiring contracts and enter new ones. The fund spreads its roll dates over four days, which in theory should help to minimize the impact of its trading, but I still suspect that other savvy market players are able to game this pattern.

After the past few years' performance, shares are off roughly 85% since inception, you'd think that investors would have run away screaming by now. For some reason, though, they just keep getting lured back in. Perhaps there's a mind control device at work here. That, or investors think they can actually time a recovery in natural gas with great enough precision to avoid getting their faces ripped off by the Negative Roll Yield Mutant.

If you want to trade in and out of this ETF in a matter of minutes or hours, that's your prerogative. For those investors out there who, like me, anticipate an eventual recovery in natural gas prices but want to be able to ride out another year of depressed prices if need be, I'd suggest ditching this frightening fund in favor of a low cost producer who can survive the current rig invasion. Two companies that potentially fit the bill are Range Resources (RRC) and Southwestern Energy (SWN). You can read my case for the latter company, one of the premier shale gas operators here.

From Toby Shute at Seeking Alpha


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