Crude Oil at the Mercy of Weak Equities and Strong U.S. Dollar

Crude oil started off the day under a great deal of pressure trading below the 77 level before rallying. This market continues to be wrapped around the equity markets in such a way as to reflect their swings both up and down. So of course falling equities and a stronger U.S. dollar index today did pressure crude oil today.

This keeps crude oil bears in near term technical control and intermediate and long term traders should continue to be short the crude oil market. Crude oil finished Mondays regular session closed down $1.80 a barrel at $77.42 today. Prices closed nearer the session low of the day and hit a fresh seven week low.

Crude Oil Trade Triangles......

Monthly long term trends = Negative
Weekly for intermediate term trends = Negative
Daily for short term trends = Positive
Combined Strength of Trend Score = – 90


Trade School 101....How to Use Money Management Stops Effectively

Chris Vermeulen: The Black Monday the Public Doesn’t Know About

Tonight I jumped on the computer so see what the futures market was up to. The good news was that our short trade on the equities market was up 10% from our entry point last week. The bad news was that the stock market overseas was selling off big and so were US stocks. It was a black Monday in both the sky and on the screen…

I’m not really sure how many people watch the futures market but I do know the majority of people do not. So Tuesday morning there will be a lot of people in a panic when they see stocks gap down sharply.

Taking a look at the 4 hour charts you can see the recent price action which unfolded today. We have been anticipating this from early last week. So none of this should be a surprise.

Dollar Index 4 Hour Chart:
The dollar index broke out of it falling pattern and has made a run up to the first resistance level of 75.40. I feel we could see it go a little higher on Tuesday but overall it looks ready for a pause or pullback here.

SP500 Futures 4 Hour Chart:
The equities market has fallen sharply in the past week and the green circle is where we shorted the market using the SDS etf. We did take partial profits last week to lock in 7.4% profit in a couple days, but we still hold the balance of the position which is currently up over 10% using today’s futures price.

The SP500 looks to be getting oversold here and is now entering the previous low set a few weeks back. I will be looking to tighten stops and or exit the position early this week before a sharp rebound takes place.

Bond Futures 4 Hour Chart:
Bonds are a safe haven for investors when fear is running high. The past couple trading session’s the price of bonds have shot up. This tells me panic selling in the stocks market has starting and that generally means we are nearing and tradable bottom for stocks…..

Gold Futures 4 Hour Chart:
Gold is the other safe haven. Here again we see money flow into gold at a very quick pace….We will need to see some resolutions in Euro land before gold will trade lower or sideways, but until then I think scared money is going to keep rolling into gold.

Crude Oil Futures 4 Hour Chart:
Oil has drifted its way up into a resistance level as of late last week only to find overhead supply. Once the selling started oil slid lower at a steady rate all the way back down to a short term support zone. Now we are waiting to see if it will make a double bottom at $79 or bounce here

Weekend Trading Conclusion:

In short, Tuesday will be a volatile session judging from today’s sharp price action. Fear is driving prices at the moment and until everyone panics out of stock positions and dumps their money into the save havens we will not see a bottom form. Generally this takes 2-5 days to play out but time will tell.

I hope this quick Labor Day update helps get you back on track for trading this week.
Consider joining me at The Gold and Oil Guy for ETF trade ideas on the SP500, Oil, Gold, and Silver with great accuracy. Check it out at The Gold and Oil Guy.Com

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New Report Analyzes Tipping Point of Gold and Equities....Are You Ready?

Equities and Precious Metals are on the edge of another rally and it could start as early as tomorrow.

On March 13th I posted some of my analysis online showing how the market was trading at a key pivot point and that a sharp price movement was about to unfold. I also provided everyone with the direction in favor which played out perfectly catching a 4.5% in three days.

As of today we are getting the same setup I saw on March 13th [see "It Looks Like Crash or Crush Time For Equities and Gold"] but this time it’s pointing to higher prices. Take a quick look at the charts I was looking at for both the SP500 and gold and you will notice that the SP500 and gold both moved to the support levels before starting to bounce.

While we caught the move down on the SP500 playing the SDS Double leveraged inverse fund we did not take part in falling gold prices. Reason being, there is so much fear in the market and the amount of surprise news popping up each week I don’t think shorting precious metals is a safe call. Rather I am looking for a pullback to cleanse the holders of the commodity then I will buy once price confirms the continuation pattern has completed.

Now, stepping forward to this week’s price action

SPY Daily Chart
We can see in the chart below that price is currently testing a key resistance level. Before the week is over we could see some big price movement equities. I need to see what happens tomorrow but I have a feeling we could see a breakout to the upside for a long position.

Gold Miners Fund Daily Chart
Gold stocks have be under performing the price of bullion for a few months but it looks as though they could be starting a sizable rally. If gold stocks continue to move sharply higher out of this pattern, then it’s a positive sign that gold and silver bullion will both continue to move up.

Mid-Week Trend Report:
In short, stocks and commodities may have shaken the weak positions out of the market during the recent pullback in price. Things could be ready to start another multi month rally and trade setups. Keep your eyes on the charts....

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Be Patient, Looks Like Gold & Stocks are on the Verge of Breaking Out!

Do you have the kind of patience in your trading that Chris Vermeulen of The Gold and Oil Guy.Com does......

The past couple weeks we have seen strong distribution selling in the equities market followed by equally large days of buying. These buying and selling frenzies have formed a sideways consolidation.

Intraday movements have been sizable and more than enough to shake those trying to pick a direction early out of the market a few times. As fewer traders get involved the price range narrows and becomes compressed. Eventually there will be a breakout in a direction on heavy volume and with any luck it will start a new trend.

As much as I love to trade, I have been sitting on the sidelines for a few weeks giving this market some time to sort it’s self out.... As we all know there are times when you get really aggressive and other times when it’s best to stand aside.

It is very important to note that each trader sees the market in a different way and once it is aligned with what you are comfortable with trading, only then should you step in and trade. If not, then it’s best to wait for more favorable price action. It took me years to figure this out but now that I know what I am looking for and on what time frames, trading is less stressful and I know I don’t need to be trading all the time, there is always another opportunity just around the corner....

Gold has been trading sideways for almost two weeks now as it tries to break free of the December high. It is much in line with the SP500 chart above. I feel Friday or early next week that the market, dollar, metals and oil make some sizable moves either up or down....

Mid-Week Conclusion:
In short, I don’t think it is wise to jump the gun and take on any large positions until we see what happens on Friday overseas....

If nothing happens which is kind of what I am thinking, we should see the extra fear value come back out of the price of gold, silver and oil (drop in price) and possibly help boost equity prices.

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J.W. Jones: Mr. Market Sends Oil Investors Mix Signals

While this week was shortened due to the President’s Day holiday, it has been quite a ride for traders and investors. The 24 hour news cycle certainly intensifies current market conditions as any news focusing on oil or the Middle East protests moves markets. Thursday the International Energy Agency came out and indicated that the expected drawdown in crude oil supplies coming from Libya was being exaggerated. Immediately upon the release of this information light sweet crude oil got hammered and stocks rallied from day lows.

By now most market prognosticators and the punditry will be out declaring that oil prices are going to continue lower and equities are on sale and primed for a snapback rally. I’m not sure that it is that easy. Mr. Market makes a habit of confusing investors with mixed signals. One thing is certainly clear from the recent price action, rising oil prices are not positive for equities here in the United States. What is also clear when looking at the Massachusetts Institute of Technology’s (MIT) version of inflation data (http://bpp.mit.edu) for the United States, it becomes rather obvious that inflation continues to ramp higher in the short term and also on monthly and annual time frames.

If inflation continues to work higher, it would be expected that light sweet crude oil futures prices would work higher as well. The dollar index futures have been selling off while oil and precious metals have rallied until the IEA news came out on Thursday. What should be noted from the recent uncertainty in the marketplace is that the U.S. Dollar Index futures did not rally. This is the “dog that didn’t bark.” During recent periods of market uncertainty such as the European sovereign debt crisis, the U.S. Dollar was considered a safe haven. This most recent market uncertainty caused by political instability in the Middle East has seen the U.S. Dollar Index futures sell off while gold and silver rallied as investors looked to the shiny metals for safety.

So what do all of the mixed signals relating to financial markets really mean? It’s simple, the U.S. economy is not on solid ground, rising oil prices will damage the economy, the world does not necessarily view the U.S. Dollar as a safe haven, and inflation is rising. With all of that being said, what if this is just the beginning of a major rally in energy and the metals? What if prices are going to pull back to key breakout levels, test them successfully, and probe to new highs? As can be seen from the chart above, the U.S. Dollar Index is poised to test recent lows. Should price test the lows and breakdown, oil and the metals could rally in lockstep in a parabolic move.

The daily chart of light sweet crude oil futures illustrates the breakout level that oil prices surged from.

I am expecting a test of that level at some point in the near future. If that level holds, oil prices could be poised to take off to the upside. If prices were to move considerably higher it could place downward pressure on equities and would correspond with the U.S. Dollar cycle lows which are expected by most sophisticated analysts sometime this spring. The intermediate to longer term fundamentals in the oil space are strong and technical analysis could also affirm higher prices very soon. If we see the key breakout level hold and a new rally takes shape on the heels of a lower dollar, the equity market could be vulnerable.

The next few days/weeks are going to prove critical as a lower dollar could change everything. A quick look at the silver futures daily chart illustrates the key breakout level which will likely offer a solid risk / reward type of setup.

As can be seen, silver has had a huge run higher and has broken out to new all-time highs. Gold has moved higher but has yet to breakout and could play catch up while silver consolidates. Longer term I remain bullish on precious metals and oil, but volatility is likely to increase in both asset classes going forward, particularly if inflation continues to increase. Patience and discipline will be critical in order to enter positions where the risk / reward validates an entry.

As for the equity market, it remains to be seen what we will see next week. I am not convinced that the issues in the Middle East are over and that oil is going to come crashing back down to previous price levels. Oil has broken out and if the breakout levels hold I would expect a continuation move higher. If we see price action in oil transpire in that fashion, equities will be for sale and prices could plummet tremendously.

I will be watching to see how much of the recent move lower is retraced. If we see a 50% retracement and prices rollover the S&P 500 will likely be magnetized to the 1275-1285 price range. If that price level is tested and fails, we are likely going to see a 10% correction and potentially more. The daily charts of SPX listed below illustrate the key Fibonacci retracement levels as well as the key longer term price levels that could be tested if prices rollover.

While lower prices are possible, if we see a retracement of the recent move which exceeds the 50% retracement level in short order prices will likely test recent highs and begin working higher yet again. The price action on Friday and next week is going to be critical to evaluate as many traders and market participants are going to be watching the price action closely looking for any clues that might help indicate directionality.

For right now, I am going to be patient and sit in cash and wait for high probability low risk setups to emerge. As I have said many times, sitting on the sidelines can be the best trade of all!

Get More Trade Ideas J.W. Jones visit Options Trading Signals.Com


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How to Trade Last Weeks Market Panic in the S&P 500 & Gold Futures

From guest analyst J.W. Jones of Options Trading Signals.Com.......

After taking a quiet ride upward for some time, the markets finally reminded us what it can do in a flash as precious metals and crude oil have been selling off while the U.S. Dollar Index futures were consolidating. Additionally, the volatility index has been very choppy and was indicating that we could be seeing a potential change in the underlying trend with regards to future price action. In previous articles that I have proffered, I was warning about a likely correction in gold and equities as prices were extremely overbought and both asset classes were due for pullbacks.

Precious metals have been selling off for much of the month of January while equities worked their way higher as technology stocks continued to outperform. Last week we saw major selling in equities while gold, oil futures, and Dollar Index futures rally. What is Mr. Market trying to tell us? Why are the U.S. Dollar Index futures rallying with gold and oil simultaneously? However, the most important question that most traders want an answer to is whether this is a top in equities or if we are just going to have a mild correction and power higher?

Risk is excruciatingly high and Friday’s price action appears to be extremely emotional. I am watching to see if we get the Friday afternoon grind higher in equities that generally is accompanied by light volume. If equity prices are held down today, we may see lower prices in the not-so-distant future. The daily chart of the S&P 500 E-Mini futures contract listed below illustrates the key price levels that traders are likely watching closely:

I remain neutral at this point on stocks as I want to see how the market digests today’s prices before taking a serious position. With short term prices at the current oversold levels, I am expecting a light volume drift higher before Mr. Market tells us which direction he may be headed in the longer term time frame. For right now, I will continue to remain in cash and will wait patiently for low risk, high probability setups to emerge.

Gold
Gold futures suffered from a relatively serious pullback in the month of January. At the close on Thursday, gold was trading around $1,315 per troy ounce. As of the writing of this article gold was trading over 15 points higher on Friday and panic buying was taking place. Gold was extremely oversold on the short to intermediate time frame so a relief rally was expected. However, gold rallying 15 points in the face of an increase in the Dollar Futures on Friday is rather perplexing. The U.S. Dollar Index futures are illustrated below:

There have been times when both gold and the dollar have rallied together in the past, however at this point it is too early to determine what the market is trying to tell us. On one hand, it is obvious that gold needed to bounce to work off oversold conditions. On the other hand, it is rather odd that gold and the U.S. Dollar Index futures are rallying together. My best guess is that traders are trying to game where future money flows are going to be placed if selling persists in the future. It is hard to say for sure if gold will roll over or if this rally is trying to tell us something else.

Currently it is too early to tell, so I will continue to sit on the sidelines and watch the price action. I do not have an edge and the whippy price action in gold futures recently has not offered a solid risk / reward setup. Longer term I expect gold prices to work higher, but in the interim I am unsure of price direction and if selling pressure sets in, how low prices might go. Key support levels in gold futures would be around the 1270-1280 range based on the gold futures chart illustrated below:

For right now, I expect that gold prices could drift higher but the decline may or may not be over. There are extraneous events that could trigger another powerful rally in gold, particularly if panic selling in equities continues and/or an unforeseen event occurs in Europe or the Middle East. I do not currently have a position in gold futures or GLD, but I will be watching the price action closely awaiting a possible trade entry. I will likely look to get long GLD at some point in the future as I expect another rally to transpire in coming months that might push gold to new highs. It is too early to tell what price action is going to do, but for right now I’m going to sit in cash and wait for a solid low risk, high probability setup.

Conclusion
Right now I am sitting in cash and will likely remain that way until we get further confirmation in both the S&P 500 and the gold futures market. It remains to be seen if this is the beginning of a new trend or a possible topping formation in the S&P 500, but what is known for sure is that we have seen heavy volume distribution set in on Friday and panic selling levels have been reached. The marketplace is charged with emotion and the VIX is up more than 20%. This type of environment is not conducive to my style of trading, so I will sit on the sidelines in cash and wait for an entry to take shape.

Gold is also at a rather tricky point on its chart as we have seen a significant rally so far today, but it remains to be seen whether this is the beginning of another powerful rally or whether we are just working off the oversold condition. Sometimes it pays to be patient as a trader and wait for setups which offer a high probability of success while risk levels are mitigated. Right now I’m going to go into this weekend entirely in cash with a smile on my face.

Next week however could offer some interesting trading setups on the S&P 500 and gold futures. Should a quality setup arrive, I will most certainly accept risk and put my trading capital to work. I hate losing trading capital, and price action today is far too emotional to get me involved. I would rather enter positions when the crowd is either sleeping or looking the other direction than invest my hard earned trading capital with them. You can call me a contrarian, but please do not make me hang out with the crowd!

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Is This a Broad Market Reversal....Better Hold On To Your Hat!

From Chris Vermeulen at The Gold and Oil Guy.com......

This had been an exiting week for traders as the equities market was on a verge of a major sell off. Fortunately, we were watching the market very closely and saw the sentiment and market internals shift shortly after a new low was set last week. That was an early warning for us that a trend reversal to the upside could happen at any hour or day this week.

Wednesday and Thursday’s rallies were on solid volume and the market internal indicators along with market breadth were strong also. There has been a large surge of new highs across the board on the NYSE, NASDAQ and AMEX. These numbers tell me that it’s not just one sector moving the market; instead it’s a broad market advance (institutional buying).

While I don’t typically try to pick major tops or bottoms because of the added risks and lower probability of winning trades, I do tend to spot them forming a few days in advance allowing me to tighten stops and take some profits on positions.

Trend reversals typically have large violent moves near the beginning and end of their life cycle making things not only tougher to trade but potentially more costly. Once I see a trend confirmed with moving averages, volume, and sentiment along with market breadth that’s when I start looking to take positions on pauses or pullbacks to support zones. This greatly increases the odds of winning/making money from the market. There are some really great Options Trading Strategies for taking advantage of these volatility changes in the market which you can get at Options Trading Signals.Com.

SPY Daily Chart:
As you can see the market has clearly broken to the upside above key moving averages after finding support at the 50 day moving average. This rally has some solid volume behind it which I like to see also.

The first 3-4 days of a trend reversal generally post some give moves but after that initial thrust expect a pause or pullback to happen.

SPY 60 Minute Intraday Chart:
We were lucky enough to take profits on our inverse SP500 trade as the market started to give us mixed signals of a possible rally. A couple days later on Nov 26th we saw a major shift within the market sentiment preventing us from shorting the market again.

Two days later the broad market gapped higher triggering protective stops/short covering sparking a fierce two day rally which took the market up to a major resistance level. I do feel as though the market is going higher, but right now, everything is WAY over bought and trading at resistance. Even if the market moves higher for another 2-3 days and breaks this resistance level, it will most likely have a pause, or pullback as it regains energy for another thrust higher.

Mid-Week Trading Conclusion:
In short, it looks as though the trend is now up and the Christmas rally could be gearing up for a good one!

Be sure to get Chris Vermeulen's Free Trading Analysis Book and Analysis or visit The Gold and Oil Guy.Com to get his Pre-Market Trading Videos, intraday updates and trade alerts



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Commodity Corner: Crude Oil Rallies to 2 Year High on Economic Optimism

Crude rallied Thursday to a two year high on rising equities and an increase in economic optimism. Oil for January delivery gained $1.25, settling at $88.00 a barrel Thursday. Oil prices peaked at $88.13 during Thursday's trading session and bottomed out at $86.27. According to the U.S. Department of Labor, initial unemployment benefit claims increased by 26,000 to 436,000 from the previous week. However, the four week moving average decreased by 5,750 a two year low.

In addition, reports on an increase in retail and the housing market sales also boosted the U.S. economy. The National Association of Realtors reported a 10 percent increase in pending home sales for the month of October after dropping 1.8% in September. The greenback fell Thursday against the euro on news that the European Central Bank will delay its withdrawal of stimulus measures and keep its interest rate at a record low of 1 percent. A weaker dollar increases oil prices making it cheaper for buyers with foreign currencies.

Likewise, gasoline futures rose to a six month high Thursday, closing the trading session at $2.36 a gallon. The nearly six cent increase came as East Coast supplies declined. Investors fear that imports may decline on tightening supply conditions in the New York harbor. RBOB gasoline fluctuated between $2.29 and $2.36 Thursday.

Front month natural gas futures continued to climb higher Thursday for the eleventh straight day. Natural gas lost earlier rebounds, gained from cooler weather, after inventories fell below market expectation. The Energy Information Administration reported a 23 billion cubic feet drop for the week ended Nov. 23. Natural gas prices settled at $4.34 per thousand cubic feet, up 7.4 cents from the previous day. The intraday range for natural gas was $4.20 to $4.38.

Posted courtesy of Rigzone.Com



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Commodity Corner: French Labor Strife, Equities Boost Crude Oil

Ongoing French labor unrest and its effect on the country's refineries and fuel terminals contributed to a $1.83 increase in the oil futures price Monday. Crude oil for November delivery settled at $83.08 as French refinery workers, truckers, students, and others continued to strike in protest of the Sarkozy government's attempt to change the retirement age from 60 to 62. The retirement age increase, which would be fully phased in by 2018, has already been approved by France's National Assembly. The Senate is set to vote on the measure Wednesday, and strikers hope the civil unrest will pressure the upper chamber to kill Sarkozy's pension reform plan.

Strikers have prevented oil tankers from entering the major southern port of Fos Lavera, and all 12 of France's refineries have been shut down. Moreover, the protesters have attempted to block access to fuel terminals. An official with a fuel importers' group said Monday morning that roughly 1,500 of France's 12,000 retail fuel outlets have exhausted their supplies of some or all types of fuel. Also having a bullish effect on oil Monday were rising equities markets, with the Dow Jones Industrial Average and S&P 500 each closing up more than 0.7%. Crude oil traded within a range from $80.35 to $83.08 Monday.

The price of a gallon of gasoline also surged, thanks to many of the issues affecting crude oil. Front month gasoline settled a nickel higher at $2.15 after fluctuating between $2.09 to $2.155. Thanks to a mix of abundant inventories and underwhelming demand as traders continue to await cold winter weather, November natural gas fell 10.4 cents to settle at $3.43 per thousand cubic feet. Gas traded from $3.44 to $3.53.

Courtesy of  Rigzone.Com

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SP 500 & Natural Gas Short Term Trend Charts

The broad markets along with metals have been on fire but in the last two weeks we have seen the sentiment become stronger. The extreme bullishness we are seeing has made it difficult for low risk swing traders to get in on the action simply because there have not been many sizable pullbacks. Instead the prices have been inching their way higher with very minor pullbacks before surging again.

The only way to take advantage of this type of price action in order to keep risk low is to take small positions when the market drops to the 5, 10 or 14 moving averages with a mental stop to exit the position if the market closes below the 14ma. Any position take up here should be small because the market is in runaway mode, meaning everyone is buying on the smallest of dips. The largest moves tend to be near the end of a trend which is why I feel this market could keep running for a few more weeks before taking a sharp plunge.

Natural Gas
If you have been reading my work over the past year you should know I don’t like natural gas. More people have lost money trying to play natural gas than any other investment vehicle out there which is why I don’t cover it very often. Many of you have been asking about Natural Gas (UNG) so here are my thoughts on it.

UNG has been in a down trend for several years and the only trades should be short positions at this time. The argument from some is that it’s undervalued and with winter just around the corner prices should go up. It’s a valid argument but price action is what makes traders money, not fundamentals.

The daily chart of Nat Gas below shows what I feel is about to happen. Remember, UNG is a terrible fund to be buying. Unless natural gas is moving strongly in your favor, this fund continually loses value simply because of the way its created.

Looking at the actual natural gas commodity chart is a different story… The trend is still down, but it does look as though it’s trying to form a base when looking at a 3 year weekly chart. That being said, there is still a very good chance we see gas test near the $3 level before starting a new trend so trying to pick a bottom here is not something I would be doing.

Trading Conclusion:
In short, the equities market is still in a strong uptrend. I’m not comfortable taking any large positions at this stage of the game but if we get a setup I will not hesitate to enter with a little money.

As for natural gas...trying to pick a bottom is deadly in a down trend as bounces tend to be short lived or flat. I will cover the dollar, gold, oil and the market internals in the member’s pre market morning video....

Just Click Here to get my daily ETF Trend Newsletter in your email inbox.

Happy Trading,
Chris Vermeulen at The Gold And Oil Guy.Com


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Pending Gulf Storm and Stronger Equities Sends Crude Oil Higher

Crude oil closed sharply higher on Thursday over concerns of the pending Gulf storm and spillover strength from the equity markets. Today's rally allowed September to breakout of its sideways trading pattern of the past week and the high range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term. If September extends the rally off this month's low, the reaction high crossing at 79.97 is the next upside target. Closes below last Tuesday's low crossing at 74.70 would temper the near term friendly outlook. First resistance is today's high crossing at 79.42. Second resistance is the reaction high crossing at 79.97. First support is last Tuesday's low crossing at 74.40. Second support is the reaction low crossing at 71.47.

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Natural gas closed higher on Thursday and above the 20 day moving average crossing at 4.579. The high range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term. Closes above Wednesday's high crossing at 4.662 are needed to confirm that a short term low has been posted. If August resumes the decline off June's high, the reaction low crossing at 4.108 is the next downside target. First resistance is today's high crossing at 4.719. Second resistance is the reaction high crossing at 4.923. First support is the 10 day moving average crossing at 4.479. Second support is last Thursday's low crossing at 4.288.

Here’s a Great Alternative to High Price Trading Courses

The U.S. Dollar closed lower on Thursday and closed below the 10 day moving average crossing at 83.34 as Investors unloaded the Dollar over worries about a sluggish U.S. economic recovery persist and confidence in the euro zone and nations abroad increase. The low range close sets the stage for a steady to lower opening on Friday. Despite today's decline, stochastics and the RSI are turning bullish signaling that a short term low might be in or is near. Closes above the 20 day moving average crossing at 84.22 are needed to confirm that a short term low has been posted. If September resumes the decline off June's high, the 50% retracement level of the November-June rally crossing at 82.15 is the next downside target. First resistance is Wednesday's high crossing at 83.64. Second resistance is the 20 day moving average crossing at 84.22. First support is last Friday's low crossing at 82.25. Second support is the 50% retracement level of the November-June rally crossing at 82.15.

The "Super Cycle" in Gold and How It Will Affect Your Pocketbook in 2010

Gold closed higher amidst increased interest in many commodities after some bullish corporate earnings reports boosted confidence in the economic recovery. August gold continues to consolidate above the 38% retracement level of this year's rally crossing at 1183.90. At the same time, stochastics and the RSI are oversold and turning neutral to bullish hinting that a short term low might be in or is near. Closes above the 20 day moving average crossing at 1210.90 are needed to confirm that a short term low has been posted. If August renews the decline off June's high, the 50% retracement level of the aforementioned decline crossing at 1158.30 is the next downside target. First resistance is today's high crossing at 1201.20. Second resistance is the 20 day moving average crossing at 1210.90. First support is Tuesday's low crossing at 1175.10. Second support is the 50% retracement level of the aforementioned decline crossing at 1158.30.

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

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Crude Oil Is Steady as U.S. Trade Deficit, Jobless Claims Drop

Crude oil was little changed along with the dollar after U.S. government reports showed that the country’s trade deficit narrowed, indicating a slowing economic recovery, and jobless claims decreased. Oil fluctuated as the U.S. currency changed direction against the euro on the conflicting economic news. The strength of the dollar has guided commodity prices over the past three years as investors look at raw materials as a store for value. U.S. equities were little changed.

“We aren’t doing much because the dollar is consolidating and equities have been covering the same ground for the last three days,” said Peter Beutel, president of trading adviser Cameron Hanover Inc. in New Canaan, Connecticut. “There’s a consensus that the economy is growing, but also a great deal of uncertainty about the strength of the recovery.” Crude oil for April delivery increased 2 cents to $82.11 a barrel on the New York Mercantile Exchange, the highest settlement price since Jan. 11. Futures are up 94 percent from a year earlier.

The dollar traded at $1.3677 against the euro, down 0.2 percent from $1.3657 yesterday. The Standard & Poor’s 500 Index gained 4.63, or 0.4 percent, to 1,150.24. The S&P 500 dropped as much as 0.6 percent earlier today. The index has risen 1 percent so far this week. “We don’t trade on oil-market news anymore, instead we look at what’s happening with the stock market and dollar,” said Addison Armstrong, director of market research at Tradition Energy in Stamford, Connecticut.....Read the entire article.


How the 'Underground' Siphons Profit From this Market


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Oil Trades Near $72 After Supplies Drop to Lowest Since January

Oil traded near $72 a barrel in New York after the U.S. Energy Department reported that crude stockpiles in the biggest energy consuming nation dropped to the lowest level since January. Crude inventories fell 4.73 million barrels, the weekly report showed yesterday, more than the 2.5 million barrel decline forecast in a Bloomberg News analyst survey.

Prices also gained as the dollar declined to the weakest level in almost a year and as global equities advanced, spurring expectations of improving fuel demand.“The gains in equities support optimism for the economic recovery that would drive oil demand and lead to supply tightness,” said Victor Shum, a senior principal at consultants Purvin & Gertz Inc. in Singapore.....Read the entire article

Oil Drops From 10 Month High as Stocks Fall, Dollar Strengthens

Crude oil dropped from a 10 month high as concerns that China may tighten lending and more U.S. loans may default pushed equities lower and strengthened the dollar, reducing the investment appeal of commodities. Oil declined as investors sought so called safe haven assets such as the dollar over commodities. Oil also fell in tandem with equities on concern that the Chinese government would curb new loans and SunTrust Banks Inc. said that U.S. lenders face more credit losses and commercial real estate may falter through 2010. “Equity and oil markets have been very closely correlated in the last six months,” said Ben Westmore, an energy and minerals economist at National Australia Bank Ltd. in Melbourne.....Complete Story

Oil Drops Below $70 as Equities Decline, Dollar Strengthens

Crude oil fell below $70 a barrel in New York U.S. equities dropped and the dollar strengthened for a sixth day. Oil retreated as the Standard & Poor’s 500 Index lost as much as 1.2 percent, the biggest decline in more than a month, after analysts cut ratings on companies including Sprint Nextel Corp. and MBIA Inc. The dollar has risen 2 percent since Aug. 3. “Your bearish pressures are still there,” said Bill O’Grady, chief market strategist for Confluence Investment Management in St. Louis. "The recession probably ended in June, but it’s going to be a slow global recovery, and these prices are probably pretty elevated".....Complete Story

Crude Oil Falls for Third Day in New York as Equities Decline

Crude oil fell for a third session in New York as equities declined and the dollar rebounded against the euro, reducing the need for commodities as an alternate investment. Oil dropped as U.S. equities declined after four straight weeks of gains. Those increases left the Standard & Poor’s 500 Index trading at its highest level relative to earnings in more than four years. The dollar gained for a fifth day.
“Traders are just looking toward the Dow and the S&P and selling off, because we’ve had a pretty substantial run up,” said Brad Samples, a commodity analyst for Summit Energy Inc., an energy management company.....Complete Story

Oil Steady in New York as Dollar Strengthens, Equities Decline

Crude oil was little changed after falling from a five week high as the dollar strengthened and equities dropped. Oil rose as much as 0.8 percent as the dollar gained for a fifth day, reducing the need for commodities as an alternate investment. A retreat in European and U.S. equities came after four straight weeks of increases left the Standard & Poor’s 500 Index trading at its highest level relative to earnings in more than four years. “The equity markets are kind of weak this morning and pushed us down at the open,” said Gene McGillian.....Complete story

Oil Is Set for Fourth Weekly Gain on Economic Recovery Optimism

Crude oil traded near $72 a barrel, poised for a fourth weekly gain on optimism the outlook for a global economic recovery has improved. Oil is set to rise 3.2 percent this week as U.S. equities gained and the dollar weakened, increasing investor demand for commodities priced in the U.S. currency. The Standard & Poor’s 500 Index reached a nine month high on Aug. 5. “The recent combination of a marked improvement in global business sentiment and a weaker dollar has proved a potent mix for commodities".....Complete Story

Oil Fluctuates as U.S. Incomes Drop, Existing Home Sales Gain

Crude oil fluctuated along with equities after reports showed that U.S. personal incomes dropped in June and the number of contracts to buy previously owned homes increased. Oil rebounded from the day’s lows after the National Association of Realtors said there was a 3.6 percent gain in the index of signed purchase agreements, or pending home resales. Oil slipped as much as 2 percent earlier today after the Commerce Department said that personal incomes tumbled 1.3 percent, the most in four years. Yesterday, futures rose $2.13, or 3.1 percent, to $71.58, the highest settlement since June 12.....Complete Story

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