Technical Update From The Gold and Oil Guy for August 5th

This week commodities have been moving higher which is exciting. Oil and natural gas have bullish looking daily and intraday price action. Monday we saw commodities spike higher and profit taking Tuesday and Wednesday. I am expecting a sharp move here and it could be in either direction, so this report is to keep you on your toes.

Crude oil broke out above our resistance trend line this week and has been moving sideways since Monday. This fund could pop up or down quickly here. I do not think it’s a good idea to be chasing it here.



Natural Gas – UNG ETF – Daily Chart
Seems like everyone wants to trade natural gas. I actually think more people are watching it than gold. Which is understandable because I too think Nat Gas has huge potential in the mid – long term time frame. This commodity/fund has chewed up more traders than any other fund. Maybe USO sucked as many people in; either way people are losing their shirts or already lost them with UNG!

It’s amazing how well some traders can buy at the high and sell almost at the very bottom when trading on emotions (fear and greed). That’s exactly what happens to traders when they see something with so much potential. Traders are thinking price could spike 50- 75% so they buy UNG because they are scared to miss out on the rally. Then greed sets in, they either buy more than they should have (large portion of their portfolio) or they buy more when the price drops a little. Eventually when prices break down and start to free fall all the weak hands bail out of their positions taking a nasty loss.

All this started because they think natural gas has HUGE potential and did not want to miss out. I do like natural gas but until I get a setup I keep my powder dry. If there is half the potential everyone is talking about then why is everyone so persistent at trying to pick the exact bottom? I do not bottom pick in a bear market, it’s not what successful traders do. Wait for the momentum to shift and jump on board when risk is low. I just want the low risk middle section between the bottom and the top.



TheGoldAndOilGuy Trading Conclusion:
The monthly hui chart is getting close to a long term buy signal. With any luck our recent buy signal in GDX will have us in early for the big breakout and multi month rally. I do not forecast but technically speaking the charts are looking bullish for precious metals. It is time for commodities to shine as they pause to take a breather. We could get a sharp drop or a nice pop higher in the next couple days only time will tell so be ready to lock in some gains if things start to slide.

The energy sector had some nice price action this week and with any luck we will have a low risk buy signals for our funds in the coming weeks.

If you would like to receive my Free Weekly Trading Reports or my Real-Time Trading Signals for ETF’s and Stocks please visit my websites at: www.GoldAndOilGuy.com or www.ActiveTradingPartner.com

If you have any questions please feel free to send me an email. My passion is to help others and for us all to make money together with little down side risk.

To Your Financial Success,
Chris Vermeulen
The Gold and Oil Guy

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Oil Market Absorbs Bearish DOE Report, Closes Higher

Crude oil closed slightly higher on Wednesday after the market absorbed today's bearish DOE stocks report. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term.

If September extends the rally off July's low, the reaction high crossing at 74.25 is the next upside target. Closes below the 20 day moving average crossing at 65.76 would confirm that a short term top has been posted.

First resistance is Monday's high crossing at 72.20
Second resistance is the reaction high crossing at 74.25

First support is the 10 day moving average crossing at 68.54
Second support is the 20 day moving average crossing at 65.76

How To Spot Winning Futures....Watch Video NOW

Natural gas closed higher on Wednesday as it extends this week's rally. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are bullish signaling that additional strength is possible near term.

If September extends the rally off July's low, June's high crossing at 4.716 is the next upside target.

First resistance is Monday's high crossing at 4.16
Second resistance is June's high crossing at 4.72

First support is the 10 day moving average crossing at 3.81
Second support is the 20 day moving average crossing at 3.74

How to Use Money Management Stops Effectively

The U.S. Dollar closed lower on Wednesday as it extends this month's decline below trading range support crossing at 78.83. The mid range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are oversold but remain bearish signaling that sideways to lower prices are possible near term.

If September extends this month's decline, weekly support crossing at 75.73 is the next downside target. Closes above last Wednesday's high crossing at 79.81 are needed to confirm that a short term low has been posted.

First resistance is the 10 day moving average crossing at 78.65
Second resistance is the 20 day moving average crossing at 79.15

First support is Tuesday's low crossing at 77.55
Second support is weekly support crossing at 75.73

Crude Oil Rises After Report Shows U.S. Fuel Demand Increase

Crude oil rose after a U.S. government report showed that fuel supplies dropped as consumption increased to the highest level since February. Fuel demand climbed 3.1 percent to 19.3 million barrels a day last week, the highest since the week ended Feb. 27, the Energy Department said today. Supplies of distillate fuel, a category that includes heating oil and diesel, fell 1.14 million barrels to 161.5 million. Gasoline stockpiles declined and crude oil inventories climbed. “The market is getting support from the demand number, particularly the increase in distillate demand,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut.....Complete Story

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The Psychology of Commodity Price Movement

From guest blogger Adam Hewison...

The price of a futures contract is the result of a decision on the part of both a buyer and a seller. The buyer believes prices will go higher; the seller feels prices will decline. These decisions are represented by a trade at an exact price.

Once the buyer and seller make their trade, their influence in the market is spent except for the opposite reaction they will ultimately have when they close the trade. Thus, there are two aspects to every trade: 1) each trade must ultimately have an opposite reaction on the market, and 2) the trade will influence other traders.

The price of a futures contract is the result of a decision on the part of both a buyer and a seller. The buyer believes prices will go higher; the seller feels prices will decline. These decisions are represented by a trade at an exact price.

Once the buyer and seller make their trade, their influence in the market is spent except for the opposite reaction they will ultimately have when they close the trade. Thus, there are two aspects to every trade: 1) each trade must ultimately have an opposite reaction on the market, and 2) the trade will influence other traders.....Read Complete Article

Natural Gas ETF Trading

Natural gas has taken almost everyone’s money that I have talked to, which means it should be bottoming soon.

Have you ever bought a stock, watched it tick higher and all of a sudden see prices drop taking out your stop order or selling down to a point here you cannot take the pain making you exit for a loss. Only to see prices reverse and move in the direction of the trade you just exited but this time without you!

If this happens then not only is your trading strategy/model needing some tweaking but you also do not understand how the markets REALLY work. The floor traders (market makers) are taking your money and it’s as easy as taking money from a baby. There are tricks the market makers do on a daily basis with stocks, commodities etc… in order to make as much money as possible off the little uneducated trader. I will be sending out a special report about this in the next few weeks.

Oil Falls on Supply Report

Crude oil futures continued falling this morning after the U.S. Energy Department posted stockpile reports. September crude oil for fell 81 cents, or 1.1 percent, to $70.61 a barrel on the New York Mercantile Exchange. Oil traded at $70.73 before the release of the report out of Washingtonat 10:30 a.m.

World Oil Traders Look For Cue From U.S. Economy

Crude oil was lower due to profit taking overnight as it consolidates some of the rally off July's low. Stochastics and the RSI are diverging but are neutral to bullish signaling that sideways to higher prices are possible near term.

If September extends the rally, the reaction high crossing at 74.25 is the next upside target. Closes below the 20 day moving average crossing at 65.72 would confirm that a short term top has been posted.

Crude oil pivot point, our line in the sand for Wednesday is 71.31

First resistance is Monday's high crossing at 72.20
Second resistance is the reaction high crossing at 74.25

First support is the 10 day moving average crossing at 68.47
Second support is the 20 day moving average crossing at 65.72

How To Spot Winning Futures....Watch Video NOW

Natural gas was lower due to profit taking overnight as it consolidates some of Monday's rally. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term. Closes above the reaction high crossing at 4.045 are needed to confirm that a low has been posted while opening the door for a larger degree rebound during the first half of August.

If September renews last week's decline, July's low crossing at 3.366 is the next downside target.

Wednesday's pivot point for Wednesday is 3.97

First resistance is Monday's high crossing at 4.16
Second resistance is the reaction high crossing at 4.72

First support is the 10 day moving average crossing at 3.80
Second support is the 20 day moving average crossing at 3.73

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Profit-Taking Seen In Risky Assets As Rallies Look Overdone

Massive profit taking is seen after crude oil surged above 72 as the rally over the past 3 days was mainly driven by strong macro economic data and robust sentiment. WTI crude oil is currently trading at 70.5, down $1 from yesterday's close. There have been heated debates on the impact of high oil price on economic growth. Fatih Birol of the International Energy Agency, told the press that prices higher than $70/bbl would hurt recovery. The Chief Economist said that 'if we see prices go much higher than that, we may see it slow down.....Complete Story

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Big Oil Speculator Defends Practice in Washington

John Hyland's funds control billions of dollars that flow in and out of energy markets, making him one of the biggest oil speculators in the world and also one of the biggest potential targets for federal regulators. The 50 year old Californian has been asked to appear before the Commodity Futures Trading Commission on Wednesday, where he will say that he isn't the boogie man everyone's looking for. There is evidence that he may be right. "Five years ago, they might have blamed the oil companies,".....Complete Story

Can You Learn to Trade Crude Oil in 90 Seconds

Oil Prices Ease as Traders Expect Rise in Inventories

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

If September extends the rally off July's low, the reaction high crossing at 74.25 is the next upside target. Closes below last Wednesday's low crossing at 62.70 would confirm that a short term top has been posted.

First resistance is Monday's high crossing at 72.20
Second resistance is the reaction high crossing at 74.25

First support is the 10 day moving average crossing at 67.88
Second support is the 20 day moving average crossing at 65.22

How to Use Money Management Stops Effectively

Natural gas posted an inside day with a lower close on Tuesday as it consolidates some of Monday's rally. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI have turned bullish signaling that additional strength is possible near term.

If September extends the rally off July's low, June's high crossing at 4.716 is the next upside target.

First resistance is Monday's high crossing at 4.16
Second resistance is June's high crossing at 4.72

First support is the 10 day moving average crossing at 3.79
Second support is last Wednesday's low crossing at 3.46