The Crude Oil Trader

Tuesday, June 16, 2009

U.S. Dollar Post Inside Day, Indicators Remain Bullish

The U.S. Dollar posted an inside day with a lower close on Tuesday as it consolidated some of Monday's rally. The mid range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term.

As of 10:30 EST the dollar was slightly higher in the over night session increasing the likelihood of a lower open in crude oil Wednesday morning. Supporting the bears case that a near term high in crude is in.

If September renews the rally off last week's low, the reaction high crossing at 83.69 is the next upside target. Closes below the reaction low crossing at 79.62 would temper the near term friendly outlook in the market.

First resistance is the reaction high crossing at 81.97
Second resistance is the reaction high crossing at 83.69

First support is last Thursday's low crossing at 79.62
Second support is the reaction low crossing at 78.83

Today’s Stock Market Club Trading Triangles

Crude Oil Closes Lower, Sets Up Lower Open Wednesday

Crude oil closed slightly lower due to profit taking on Tuesday as it consolidated some of this spring's rally. The low range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are overbought and are turning bearish signaling that a short term top might be in or is near.

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. Closes below the 20 day moving average crossing at 66.90 would confirm that a short term top has been posted.

First resistance is last Thursday's high crossing at 73.23
Second resistance is the 38% retracement level crossing at 82.38

First support is the 10 day moving average crossing at 69.87
Second support is the 20 day moving average crossing at 66.90

Today’s Stock Market Club Trading Triangles

Natural Gas Consolidates Monday's Rally

Natural gas closed lower on Tuesday as it consolidated some of Monday's rally. The low range close sets the stage for a steady to lower opening on Wednesday.

Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term.

If July extends Monday's rally, May's high crossing at 4.690 is the next upside target. Closes below the 10 day moving average crossing at 3.869 would confirm that a short term top has been posted.

First resistance is today's high crossing at 4.387
Second resistance is May's high crossing at 4.690

First support is the 10 day moving average crossing at 3.869
Second support is last Thursday's low crossing at 3.550

Crude Oil Falls as Equities Extend Losses, Daniel Bruno's Crude Oil Call

"Crude Oil Falls as Equities Extend Losses, Dollar Rebounds"
Crude oil fell, erasing earlier gains, as U.S. equities dropped and the dollar rebounded from intraday lows, reducing the appeal of commodities as an alternative investment. Oil retreated from gains of 3 percent, as the Standard & Poor’s 500 Index and Dow Jones Industrial Average dropped as much as 1.3 percent. The U.S. currency strengthened to $1.3832 against the euro after touching $1.3933, the weakest level since May 21. “We started the day out with the idea that we’d have both a weaker dollar and a higher.....Complete Story

"Sinopec Plans 1st Deep Water Well in South China Sea"
China Petroleum & Chemical Corp. is aiming to drill its first deepwater well next year in the South China Sea, ending a moratorium on exploration in waters close to acreage disputed by Vietnam, two company officials said Tuesday. The company, known as Sinopec, has begun a 3D seismic survey in an area of 1,250 square kilometers in the Qiongdongnan basin and drilling at the best prospects will follow, said the officials, declining to be named.Sinopec has a license to explore more than 8,000 sq km in the Qiongdongnan basin, including some blocks in territorial waters claimed by Vietnam.....Complete Story

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"Analyst Daniel Bruno: Crude Oil Poised to Break $79, Head to $93"
Crude oil is poised to break $79 and rise to at least $93 a barrel by late August, according to technical analysis by fund manager Daniel Bruno, reaffirming a prediction he first made in December. “Crude held above $70 a barrel support yesterday, which is a good sign,” said Bruno, the head of CEO Capital Management in New York and a chartered market technician. “If crude maintains $70, there could be a breakout above $79 by the end of June.” Bruno on Dec. 23 called for crude to rebound from below $40 a barrel up to $93. He said yesterday in a telephone interview that crude was.....Complete Story

Today’s Stock Market Club Trading Triangles

Crude Oil Stochastics and RSI Hinting Short Term Top

Crude oil was higher overnight as the U.S. Dollar was slightly lower on a small bullish bounce in the Euro. Stochastics and the RSI are diverging and are bearish hinting that a short term top might be in or is near.

Closes below the 20 day moving average crossing at 66.96 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, the line in the sand is 70.85

First resistance is last Thursday's high crossing at 73.23
Second resistance is the 38% retracement level crossing at 82.38

First support is the 10 day moving average crossing at 69.99
Second support is the 20 day moving average crossing at 66.96

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Natural gas was higher overnight as it extends Monday's rally. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term.

If July extends the overnight rally, the reaction high crossing at 4.284 is the next upside target.

The natural gas pivot point for Tuesday is 4.07

First resistance is the overnight high crossing at 4.257
Second resistance is the reaction high crossing at 4.284

First support is the 10 day moving average crossing at 3.884
Second support is last Thursday's low crossing at 3.550

Monday, June 15, 2009

How Can You Tap Into Oil's Potential?

Dan Dicker of The Street .Com breaks down crude's recent run up and reveals two stocks that could pop, if oil pushes even higher.

No Crude Oil Chart Damage, Bulls Still Have Near Term Advantage

Crude oil closed lower, down $1.44 at $70.60 a barrel today. Prices closed nearer the session low on profit taking pressure. But no chart damage occurred today. A solidly higher U.S. dollar and lower stock indexes pressured crude oil today and crude oil bulls still have the near term technical advantage. A seven week old uptrend is still in place on the daily bar chart.

Natural gas closed up 32.4 cents at $4.181 today. Prices closed nearer the session high today on more short covering and fresh speculative buying. The key "outside markets" were fully bearish for the natural gas futures market today, as the U.S. stock indexes were sharply lower and crude oil prices were lower. Yet, natural gas rallied anyway, which is a bullish clue. Bears still have the overall near term technical advantage.

Today’s Stock Market Club Trading Triangles

July heating oil closed down 216 points at $1.8159 today. Prices closed near mid range today and were pressured on profit taking. Bulls still have the near term technical advantage.

Unleaded gasoline closed up 162 points at $2.0593 today. Prices closed near the session high today. Bulls still have the solid near term technical advantage. The next upside price objective for the bulls is closing prices above solid technical resistance at $2.15

Oil Falls Below $70 on Rising Dollar, OPEC Oil Price Inches Downwards

"Oil Falls Below $70 as Rising Dollar Dulls Hedging Interest"
Oil dropped below $70 a barrel as the dollar rose the most against the euro since April, limiting investors’ need to use commodities as an inflation hedge. Crude declined as the U.S. Dollar Index, which tracks the currency against six others, rose as much as 1.5 percent, after Russian Finance Minister Alexei Kudrin said the nation has full confidence in the U.S. currency. Oil also weakened as a report showed manufacturing in the New York region contracted for a 14th month and equities retreated in the U.S., Europe and Asia.....Complete Story

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"OPEC Oil Price Inches Downwards From Eight Month High"
The basket price of the Organization of the Petroleum Exporting Countries (OPEC) on Friday retreated slightly from its eight months high but stayed above $70 last Friday, the Vienna based group announced Monday.One barrel (159 liters) of OPEC produced crude oil stood at $70.45 Friday, down from $70.87 on the previous day, when the price had reached its highest level since mid October of last year.
The cartel produced 33.9 percent of the world's oil supply in May, according to OPEC's latest market report.....Complete Story

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Weaker Euro Sends Crude Oil Lower, Dollar Higher

Crude oil was lower overnight due to profit taking and a weaker Euro as it consolidates some of this spring's rally. Stochastics and the RSI are diverging but are neutral to bullish signaling that additional gains are possible.

Day traders may start the regular trading session neutral as they watch the SP 500 closely to see if it will continue trading at the bottom of it's current bullish channel or if we get a serious break out to the downside. If we trade sharply below the channel crude oil will be sure to follow.

If July extends this spring's rally, the 38% retracement of the 2008-2009 decline crossing at 82.38 is the next upside target. Closes below the 20 day moving average crossing at 66.38 are needed to confirm that a short term top has been posted.

Monday's pivot point for crude oil is 71.82. Below that we are bearish, above the pivot we will play the bullish side.

First resistance is last Thursday's high crossing at 73.23
Second resistance is the 38% retracement level crossing at 82.38

First support is the 10 day moving average crossing at 69.73
Second support is the 20 day moving average crossing at 66.38