More Regulation for Energy Futures?

Bank of America-Merrill Lynch Vice Chair Tom Petrie on U.S. and U.K. regulator's plans for regulation of energy futures markets.

Crude Oil Must Clear $73 or Face 25% Drop

Crude oil risks a decline of as much as 25 percent in the coming weeks if the market’s bulls are unable to break chart resistance above $73 a barrel after repeated attempts, according to Cameron Hanover Inc. Oil settled above $72 a barrel in the past two days, the closest test of its technical upside this month, and will sustain a rally only if prices rise above the June 30 peak, also the highest this year, said Peter Beutel, president of the New Canaan, Connecticut based trading adviser. The gains of about 25 percent made since the mid July drop to below $59 may unravel because of a failure to break resistance. "Crude needs to settle over $73.38 to initiate a new leg higher," Beutel said in an e-mail. "If we fail, we should drop all the way back to $58.20 to $59.25".....Complete Story

Oil Climbs to New 2009 High

Oil prices jumped Friday to a new high for the year after Federal Reserve Chairman Ben Bernanke said that the U.S. economy is nearing a recovery and other economic data backed him up. Benchmark crude for October delivery surged $1.81 to $74.72 after Bernanke spoke at an annual Fed conference in Jackson Hole, Wyo. By midday, oil was trading at $73.91, topping the previous annual high of $73.23 set on June 11. Oil started climbing early in the morning after financial information company Markit said its composite purchasing managers' index showed the European economy was stabilizing.....Complete Story

China's Importance Has Been Reflected Not Only In Base Metals, But Also In Energies

Crude oil price for October delivery tries to recapture the 73 level after pulling back to around 72 earlier today. While the market remains thrilled by oil's +8% rally in the previous 2 days after huge decline in crude stockpiles, we advise a closer look at the selloff earlier in the week. It indicated that China's impact is not only on industrial metals, but also on energy market. More importantly, the impact is growing bigger and bigger. According to the National Bureau of Statistics in China, crude oil production was 109.6M metric tons from January to July 2009, down -0.9% from the same period last year.....Complete Story

New Video: Candlestick Formations You Need to Learn

Today’s short video is something quite special.

In many of our previous videos we’ve looked at charts using Japanese candlestick charts. While this is interesting, we’ve never quite explained to you some of the powers behind using Japanese candlestick charts.

The Japanese began using technical analysis to trade rice in the 17th century. While this early version of technical analysis was different from the US version initiated by Charles Dow around 1900, many of the guiding principles were very similar.

In this video we will point out to you some powerful Japanese candlestick formations on Google, Gold and Crude Oil.

Just Click Here to watch the video and please feel free to leave us a comment to let us know what you think.

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Natural Gas Dives Below $3, 1st Time Since 2002, on Supply Glut

Natural gas futures fell below $3 per million British thermal units for the first time in more than seven years after a government report showed rising supplies of the industrial and power plant fuel. U.S. inventories of the fuel rose 52 billion cubic feet to 3.204 trillion in the week ended Aug. 14, the Energy Department said today in a weekly report. Supplies were 19 percent higher than the five year average. "We have such a storage overhang staring you in the face," said Cameron Horwitz, an analyst at SunTrust Robinson Humphrey Inc. in Houston. "There won’t be any sustainable upward momentum until you work through this storage problem".....Complete Story

Is it Time To Buy Natural Gas? Let's Look at The Charts

In all of my years of trading I have never seen so much attention given to natural gas, especially by retail traders. Investors have been piling into long positions as they see nat gas having no where to go but up. In my opinion that is just trading with emotion. What is the trend in natural gas? Let's take a look at at a trend analysis of UNG, the most common ticker for natural gas.

Smart Scan Chart Analysis confirms that a strong downtrend is in place and that the market remains negative longer term. Trade this trong downtrend with money management stops. A triangle indicates the presence of a very strong trend that is being driven by strong forces and insiders. Based on a pre-defined weighted trend formula for chart analysis, UNG scored -100 on a scale from -100 (strong downtrend) to +100 (strong uptrend):

-10......Last Hour Close Below 5 hour Moving Average
-15......New 3 Day Low on Wednesday
-20......Last Price Below 20 Day Moving Average
-25......New 3 Week Low, Week Ending August 22nd
-30......New 3 Month Low in July
-100.....Total Score


As you can see natural gas gets the worse grade possible. The pivot point for natural gas today is 3.12 and I have been calling for a target of 2.90. I know some pretty smart traders that have a 2.00 target on nat gas in the future. You say impossible? This reminds me of the days when sugar prices went into the pennies, and traders were drawn in all the way down. Remember the cliche, the trend is your friend. It holds true more today then ever.

To receive these daily trend analysis in your in box just create a FREE portfolio and sign up for a FREE trend analysis on your favorite tickers.

Crude Oil Rally Under Pressure From Jobless Claims

Crude oil was lower due to profit taking overnight as it consolidates some of this week's rally. Stochastics and the RSI have turned bullish signaling that sideways to higher prices are possible near term. The bullish case is under pressure this morning by worse then expected jobless claims this morning, creating demand concerns among traders.

If September extends this week's rally, the reaction high crossing at 72.84, then June's high crossing at 74.66 are the next upside targets. Closes below Monday's low crossing at 65.23 would confirm that a top has been posted.

Thursday's pivot point, our line in the sand is 72.53

First resistance is Wednesday's high crossing at 72.80
Second resistance is this month's high crossing at 72.84

First support is the 10 day moving average crossing at 69.97
Second support is the 20 day moving average crossing at 69.50

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The U.S. Dollar was higher overnight as it consolidates some of Wednesday's decline. However, stochastics and the RSI are turning bearish signaling that sideways to lower prices are possible near term. Closes below last Friday's low crossing at 78.30 would temper the near term friendly outlook.

Closes below the reaction low crossing at 77.52 would renew this summer's decline. Closes above the reaction high crossing at 79.81 are needed to confirm that a short term low has been posted and would open the door for a larger degree rebound during August.

First resistance is the reaction high crossing at 79.81
Second resistance is July's high crossing at 81.16

First support is last Friday's low crossing at 78.30
Second support is this month's low crossing at 77.52

Today’s Stock Market Club Trading Triangles

Natural gas was higher due to short covering overnight as it consolidates some of this month's decline. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term.

If September extends this month's decline, weekly support crossing at 2.640 is the next downside target. Closes above the 20 day moving average crossing at 3.575 would confirm that a short term low has been posted.

Natural gas pivot point for Thursday is 3.12

First resistance is the 10 day moving average crossing at 3.34
Second resistance is broken trading range support crossing at 3.37

First support is Wednesday's low crossing at 3.05
Second support is weekly support crossing at 2.64

Why Oil Won't Return to Triple Digits

Oil prices have surged more than 50% from the start of the year, but don't expect a return to triple digits anytime soon, worries about the pace of an economic recovery will continue to drive near term volatility. "The market is manic right now," said Phil Flynn, analyst at PFG Best. "This is more uncertainty than I've seen in a very long time: big rallies followed by big breaks, and that's reflective of feelings about the overall economy." Concerns about the recession and more recently the timing of recovery have translated into some big swings. Worldwide consumption faltered as the global recession took hold, sending prices lower. There have been signs of a recovery, but it won't be a straight line.....Complete Story

Energy Takeovers to Accelerate as Value Gap Narrows, UBS Says

Acquisitions of energy producers will accelerate late this year and early next year as suitors and cash strapped sellers both give ground on price expectations after a collapse in natural gas markets, UBS AG said. The dealmaking will probably begin as gas producers sell assets to raise cash, said Stephen Trauber, UBS’s global energy chief. Corporate takeovers will then pick up as executives weigh the shareholder value merits of selling equity at a discount to bring in more cash versus selling their companies outright at a premium. “Major oil companies have been waiting with the expectation that gas prices in particular, which is what many North American companies are based on, will continue to weaken.....Complete Story