Trading Crude Oil Is All About The Dollar, How Low Can It Go?

We were quite amazed when we looked back to see how long it’s been since we had put together a Dollar Index (NYBOT_DX) video. We had to look back to September of 2008 to find the last series of videos we had done specifically for the Dollar Index, and it proved to be successful.

In today’s video we will look at the Dollar Index and the impact it is having on crude oil (NYMEX_CL) and other major markets. I’ll also make a rather surprising prediction as to the most likely trend the dollar is going to take in the next 12 months.

This is a video you will not want to miss as the ramifications of inflation and the dollar are rather shocking.

We will show you how MarketClub has used the same approach in the same market using our “Trade Triangle” technology to trade this index and just how successfully this approach has been.

We strongly recommend that you watch my earlier Dollar Index video and then watch the new one. This will give you more confidence in using our “Trade Triangle” approach.

As always, the videos are free to watch and there is no need to register. I would love to get your feedback about this video and your own predictions about these markets on our blog.

Friday's Short Covering Rally Sets The Stage For Steady Open For Monday

Crude oil closed lower on Friday due to profit taking as it consolidated some of Thursday's rally. A short covering rally tempered early losses and the mid range close sets the stage for a steady opening on Monday.

Stochastics and the RSI are overbought and are turning bearish hinting that a short term top might be in or is near. Closes below the 20 day moving average crossing at 62.82 would confirm that a short term top has been posted.

If July extends the rally off April's low, the 38% retracement level of the 2008-2009 decline crossing at 82.38 is the next upside target.

First resistance is today's high crossing at 70.32
Second resistance is the 38% retracement level crossing at 82.38

First support is the 10 day moving average crossing at 65.94
Second support is the 20 day moving average crossing at 62.82

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July natural gas closed higher on Friday due to short covering as it consolidated some of this week's decline. The mid range close sets the stage for a steady opening on Monday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term.

If July renews last month's decline, April's low crossing at 3.395 is the next downside target. Closes above March's high crossing at 4.721 are needed to confirm that an important bottom has been posted.

First resistance is Tuesday's high crossing at 4.284
Second resistance is May's high crossing at 4.690

First support is Thursday's low crossing at 3.550
Second support is last Tuesday's low crossing at 3.500

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The June Dollar closed sharply higher on Friday as it consolidated some of this spring's decline. The high range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are turning bullish hinting that a short term low might be in or is near. Multiple closes above the 20 day moving average crossing at 80.90 are needed to confirm that a short term low has been posted.

If June extends this spring's decline, the 75% retracement level of the 2008-2009 rally crossing at 77.55 is the next downside target.

First resistance is the 20 day moving average crossing at 80.90
Second resistance is the reaction high crossing at 81.19

First support is Tuesday's low crossing at 78.18
Second support is the 75% retracement level crossing at 77.55

Video: How Low Can The Dollar Go

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Oil Falls On Stronger Dollar, Russia Says $75 Is Reasonable, Oil Stocks Could Double?

"Oil Falls From a 7 Month High as Dollar Gains on Jobs Report"
Crude oil fell from a seven month high after the dollar strengthened on a government report that showed the U.S. lost fewer jobs in May than forecast. Oil declined as much as 1.9 percent as the U.S. currency strengthened against the euro and yen, reducing demand for commodities as an alternative investment. Prices climbed above $70 for the first time since November after the initial release of the Labor Department report on speculation that the payroll number signaled that the worst of the economic slump is over.....Complete Story

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"Russia Says Oil Price at $75/Barrel Reasonable"
A senior Russia official said Friday that $75 is a reasonable price for per barrel oil and warned that oil output would drop on further credit crunch. "We need at least $75 per barrel," Russian First Deputy Prime Minister Igor Sechin told reporters on the sidelines of the St. Petersburg Economic Forum, the country's top business forum. Sechin forecast that oil production would unlikely fall in the next few years due to mass investment over years, but "an increasingly shrinking access to finances could lead to a decline.".....Complete Story

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"BlackRock’s Rice Says Oil Shares May Double as Crude Climbs"
Daniel Rice, whose BlackRock Energy & Resources Fund rose more than any U.S. equity mutual fund in the past decade, said oil company stocks may double within three years as crude prices climb toward $90 a barrel. The global recession didn’t fundamentally change the demand for energy or affect long term supply constraints, Rice said in a June 2 interview at his Boston office. Coal stocks may triple, he said. Rice’s $808 million fund gained an average of 20 percent a year in the 10 years ended.....Complete Story

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Crude Oil Bulls Take Charge On Better Than Expected Unemployment Numbers

July crude oil traded slightly lower Thursday due to profit taking as it consolidates some of Thursday's rally but remains above the 25% retracement of the 2008-2009 decline crossing at 68.49. Stochastics and the RSI are overbought and are turning bearish hinting that a short term low might be in or is near. Closes below the 20 day moving average crossing at 62.82 are needed to confirm that a short term top has been posted.

If July extends this spring's rally, the 38% retracement of the 2008-2009 decline crossing at 82.38 is the next upside target.

Crude oil's pivot point for Friday is 68.14

First resistance is Thursday's high crossing at 69.60
Second resistance is the 38% retracement level crossing at 82.38

First support is the 10 day moving average crossing at 65.95
Second support is the 20 day moving average crossing at 62.82

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The June Dollar was higher overnight due to short covering as it consolidates some of this spring's decline but remains below the 62% retracement level of the July-March rally crossing at 79.80. Stochastics and the RSI are oversold and are turning bullish hinting that a short term low might be in or is near. Closes above the 20 day moving average crossing at 80.84 would confirm that a short term low has been posted.

If June extends the decline off April's high, the 75% retracement level of the aforementioned rally crossing at 77.55 is the next downside target.

First resistance is the 10 day moving average crossing at 79.69
Second resistance is the 20 day moving average crossing at 80.84

First support is Tuesday's low crossing at 78.37
Second support is the 75% retracement level crossing at 77.55

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July Henry natural gas was slightly lower overnight as it consolidates some of Thursday's rally. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term. Closes above Tuesday's high are needed to renew the rally off last week's low and would open the door for a possible test of May's high crossing at 4.690.

If July extends this week's decline, last week's low crossing at 3.500 is the next downside target.

The pivot point for natural gas for Friday is 3.75

First resistance is the 20 day moving average crossing at 4.053
Second resistance is Tuesday's high crossing at 4.284

First support is Thursday's low crossing at 3.550
Second support is last Tuesday's low crossing at 3.500

Futures Prices Click Here

The June S&P 500 index was higher overnight as it extends Thursday's rally. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term.

For day traders the first challenge for the bulls will be the 23% retracement at 954.25. Beyond that level the next target would be the swing highs at 960.25. If the market finds a way to put a bad spin on the 9.4% unemployment numbers our target to the down side is 932 would strong support at 929.75.

If June extends this spring's rally, the 38% retracement level of the 2008-2009 decline crossing at 1040.33 is the next upside target. Closes below the 20 day moving average crossing at 910.38 would confirm that a short term top has been posted.

The SP 500's pivot point for Friday is 937

First resistance is Tuesday's high crossing at 948.50
Second resistance is the 38% retracement level crossing at 1040.33

First support is the 10 day moving average crossing at 920.71
Second support is the 20 day moving average crossing at 910.40

The June S&P 500 Index was up 3.80 points. at 944.30 as of 6:03 AM CST. Overnight action sets the stage for a higher opening by the June S&P 500 index when the day session begins later this morning.

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Oil Prices Spike Above $70

Oil was steady around $69 a barrel Friday after approaching $70 the day before, when the first drop in U.S. weekly unemployment claims in five months provided another sign that demand for crude could improve. Investors looked to the crucial U.S. payrolls data for May, due later Friday, for more direction. Benchmark crude for July delivery slipped 4 cents to $68.77 a barrel by midday in European electronic trading on the New York Mercantile Exchange. On Thursday the contract shot up $2.69 to settle at $68.81 after trading as high as $69.60. Crude's stellar rise it now fetches roughly twice what it did only four months ago in dollar terms is leading analysts to revise forecasts even further upward, with many now saying they expect a barrel to cost $80 or more by year's end.....Complete Story

ALERT: Buy Signal on Crude Oil 6/04/09

ALERT: Our “Trade Triangle™” technology has us back in crude oil by signaling a buy on crude oil today at a basis of 69.05 for the July contract.

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Goldman Sachs Call For $85 Crude Oil, We Are Taking Profits At $70

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July crude oil closed up $2.66 at $68.78 a barrel today. Prices closed nearer the session high today and hit a fresh seven month high on a prediction from Goldman Sachs that crude oil prices would reach $85.00 a barrel this year and $95.00 next year. However, Goldman's track record on oil predictions is spotty. I would not be surprised to see crude oil prices touch the $70.00 a barrel mark and then see a good profit taking pullback. Crude oil bulls have the near term technical advantage. A six week old uptrend is still in place on the daily bar chart.

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July natural gas closed up 9.3 cents at $3.859 today. Prices closed nearer the session high today, on short covering in a bear market. The key "outside markets" were bullish for the natural gas futures market today, as the U.S. stock indexes were higher, crude oil prices were sharply higher and the U.S. dollar was weaker. Bears have the near term technical advantage.

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The September U.S. dollar index closed down 4 points at 80.00 today. Prices closed near mid range. Prices are still in an 11 week old downtrend on the daily bar chart. Bears still have the near term technical advantage.

Video: How Low Can The Dollar Go?

The U.S. stock indexes closed firmer today. Traders are awaiting Friday's key U.S. jobs report, which is not expected to be bullish, but traders have already factored in a significantly negative jobs loss figure. Do not be surprised to see more consolidative trade in the stock indexes, heading into the summer months, when traders focus more on family vacations and outdoor activities.

Alert: Trade Triangle Technology Signals Exit All Crude Oil Long Positions

ALERT: We have exited all long crude oil swing trade positions today.

Our “Trade Triangle” technology signaled an exit on all long crude oil positions today at 66.23 basis on the July contract.


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Crude Oil Hinting That A Short Term Top May Be In

July crude oil was higher overnight due to short covering as it consolidates some of Wednesday's decline but remains below the 25% retracement of the 2008-2009 decline crossing at 68.49. Stochastics and the RSI are overbought and are turning bearish hinting that a short term top might be in or is near.

Closes below the 20 day moving average crossing at 62.22 are needed to confirm that a short term top has been posted.

If July extends this spring's rally, the 38% retracement of the 2008-2009 decline crossing at 82.38 is the next upside target.

Thursday's pivot point for crude oil is 66.62

First resistance is Tuesday's high crossing at 69.05
Second resistance is the 38% retracement level crossing at 82.38

First support is the 10 day moving average crossing at 65.04
Second support is the 20 day moving average crossing at 62.22

10:30 AM ET. May 29 EIA Natural Gas Inventories, in billion cubic feet

Total Working Gas in Storage (previous 2213)

Total Working Gas in Storage (Net Change) (previous +106)

Futures Prices Click Here

The June Dollar was steady to slightly lower overnight as it consolidates below the 62% retracement level of the July-March rally crossing at 79.80. Stochastics and the RSI are oversold and are turning bullish hinting that a short term low might be in or is near. Closes above the 20 day moving average crossing at 81.19 would confirm that a short term low has been posted.

If June extends the decline off April's high, the 75% retracement level of the aforementioned rally crossing at 77.55 is the next downside target.

First resistance is the 10 day moving average crossing at 79.73
Second resistance is the 20 day moving average crossing at 80.99

First support is Tuesday's low crossing at 78.37
Second support is the 75% retracement level crossing at 77.55

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July Henry natural gas was slightly higher overnight due to short covering as it consolidates some of Wednesday's decline but remains below the 10-day moving average crossing at 3.838. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term. Closes above Tuesday's high are needed to renew the rally off last week's low and would open the door for a possible test of May's high crossing at 4.690.

If July extends Wednesday's decline, last week's low crossing at 3.500 is the next downside target.

Thursday's pivot point for natural gas is 3.87

First resistance is the 20 day moving average crossing at 4.073
Second resistance is Tuesday's high crossing at 4.284

First support is Wednesday's low crossing at 3.708
Second support is last Tuesday's low crossing at 3.500

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The June S&P 500 index was higher overnight due to short covering as it consolidates some of Wednesday's decline. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term.

It looks like day traders are neutral on the unemployment numbers and looking to play the bull side of the trade. Above the 930 pivot point first sellers should step in 936-939 possibly filling the gap all the way up to 954.75. If we get below the pivot point the target gap fill will be 917.

If June extends this spring's rally, the 38% retracement level of the 2008-2009 decline crossing at 1040.33 is the next upside target. Closes below the 20 day moving average crossing at 908.28 would confirm that a short term top has been posted.

Thursday's pivot point, out line in the sand is 930

First resistance is Tuesday's high crossing at 948.50
Second resistance is the 38% retracement level crossing at 1040.33

First support is the 20 day moving average crossing at 908.28
Second support is the reaction low crossing at 875.40

The June S&P 500 Index was up 3.90 points. at 935.60 as of 6:03 AM CST. Overnight action sets the stage for a higher opening by the June S&P 500 index when the day session begins later this morning.

Crude Oil Tumbles as Supplies Gain, Concerns About Fuel Demand

"Oil Tumbles as Supplies Gain, Fuel Demand Drops to 10 Year Low"
Crude oil fell the most in two weeks after a government report showed that U.S. supplies unexpectedly increased as fuel consumption plunged to a 10-year low.
Inventories climbed 2.9 million barrels to 366 million in the week ended May 29, according to the Energy Department. The gain occurred as imports surged 9.9 percent and refineries increased operating rates to the highest level in six months. Fuel demand fell to the lowest since May 1999. “The high inventories and weak demand we’re seeing don’t justify prices in the $60s,” said Chip Hodge, who oversees a $9 billion natural resource.....Complete Story

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"US Interior to Collect Billions from New O&G Fees in 2010"
The U.S Interior Department has projected $14 billion in revenue collections for fiscal year 2010, stemming from several new and increased fees. A new fee on non producing Gulf of Mexico offshore oil and gas leases would increase revenue by requiring lease holders to pay $4 per acre when leases are in non producing status, Interior Secretary Ken Salazar said in prepared testimony before a subcommittee of the Senate Appropriations Committee on Wednesday.The hearing addressed the Interior Department's fiscal.....Complete Story

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"Natural Gas Tumbles in New York on Outlook for Inventory Glut"
Natural gas futures fell the most in two weeks on speculation a government report tomorrow will show an above average stockpile increase as the recession restricts demand for the industrial fuel. The Energy Department will probably say inventories gained 117 billion cubic feet in the week ended May 29, according to the median of 16 analyst estimates compiled by Bloomberg. The five-year average change is an increase of 94 billion. Supplies in last week’s report were 22 percent above normal.
“I expect tomorrow’s number to be more of the same,” said Stephen Schork, president of the Schork Group Inc.....Complete Story

Trading Video “How Low Can The Dollar Go”