Natural Gas ETF Implosion

Natural gas seems to have fallen out of favor in 2009. Over the past year the spot price of natural gas has fallen from a high of $14 to below $3. The primary reasons for the free fall in price is the sizable natural gas inventories around the world combined with a relatively stubborn natural gas industry which refuses to slow production in the wake of a global recession and economic slowdown.

As the bifurcation between oil and natural gas began to play out this year, many looked at the widening gap in the oil to natural gas price ratio as an opportunity to long natural gas, which they thought was merely lagging the recovery in oil prices by a few weeks.....Read The Complete Article

UNG, USO Trading Alerts Newsletter From The Gold and Oil Guy

UNG Natural Gas Trading Fund – Daily Chart
Nat gas looks to be finding support at the $11.50 level. This could provide a great short term trade for those active traders looking to grab a quick 5-10% gain if the price starts to rally intraday. Overall natural gas has been trading down and sideways.




USO Crude Oil Trading Fund - Weekly Chart
Crude oil has a very nice looking chart. The bullish pennant is pointing to a much higher price. Currently the price is stuck under the June resistance level but appears to be holding up nicely. Any week now I expect to see a sharp rally or a sharp sell off. Let’s continue to watch the price unfold.



Technical Traders Conclusion:
The analysis above allows you to see that crude oil is trading in a bullish pennant. I am watching the daily charts very closely for a buy signal. Waiting for my low risk buy signal is important because it confirms momentum and bullish price action before we put our money to work. This commodity could easily roll over and sell down quickly which is why I always follow my trading strategy to help avoid getting caught on the wrong side of the trade.

Natural gas is currently over sold in my opinion and ready for a bounce. If the price starts to move higher tomorrow (above Wednesdays high) then you could go long for a 1-5 day trade. There is a good chance it will provide 5-10% return, but be sure to take profits quickly as it is just a bounce (dead cat bounce). If the price drops below Wednesdays low then I would not be holding it any longer.

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Oil Declines Below $70 on Signs Demand Will Be Slow to Recover

Crude oil fell below $70 a barrel in New York on signs that demand will be slow to rebound after a report yesterday showed that inventories unexpectedly rose last week in the U.S., the world’s largest energy consuming country. Oil prices dropped as much as 2.2 percent to their lowest level in a week after the Energy Department said crude stockpiles rose 128,000 barrels last week, compared with forecasts for a 1.15 million barrel reduction. U.S. jobless claims increased more than estimated. They peaked in April in the midst of the worst recession since the Great Depression. “We’re not seeing anything to suggest demand is recovering, so there’s nothing on the fundamental side that would suggest prices would be this high,” said Bill O’Grady, chief market strategist.....Complete Story

Commodities Move Sideways But With A Mildly Bullish Tone

Crude oil recovers modestly in European morning. Rise in Asian stock markets and strong sentiment index in Germany boost price. Currently trading at 72.2, the benchmark contract will continue its narrow trading ahead of oil inventory report.
Germany's IFO business climate index rose to 90.5 in August, compared with market expectation of 89.1, from 87.3 in the prior month. Leading the surprisingly strong number was a +4.6 point increase in the 'expectations' component. The 'current conditions' component also gained +1.8 points during the month. In Asia, stocks advanced as several Chinese companies' reported better than expected earnings results. The MSCI Asia Pacific Index surged.....Complete Story

Crude Oil Falls as Dollar Strengthens on Chinese Demand Concern

Crude oil fell for a second day as the dollar strengthened, undermining demand for assets used to hedge against inflation. Oil dropped as much as 1.9 percent as the dollar advanced on a report by the Xinhua News Agency that China is studying curbs on industrial overcapacity, increasing concern the global economic recovery will slow. Oil also declined after an unexpected gain in crude inventories. “The fact that we are getting some strength in the dollar is certainly a contributing factor to the recent weakness we are seeing in oil,” said Stephen Schork, president of consultant Schork Group Inc. in Villanova, Pennsylvania. “There’s still a lot of supply in this market and not a lot of demand”.....Complete Story

Peak Oil? Crude Oil Supply Data Doesn't Lie

After the epic crash last year, the price of oil is stabilizing and it should rise exponentially over the following years. Over the past year, global consumption has stayed weak, however once the economy recovers, crude oil should resume its secular bull market. Despite the 'demand destruction' hype, it is interesting to note that during this severe global recession, worldwide oil usage has dropped by a minuscule 2.7%. So, what will happen when the world comes out of this recession? Who will rise up to the challenge and meet our insatiable thirst for energy? These are critical questions not many are willing to ask. According to the US Department of Energy, liquid fuel demand in the developed nations peaked in August 2005 at 41.89 million barrels per day..... Complete Story

Oil Falls a Second Day After Report Shows U.S. Supplies Rose

Crude oil fell for a second day after an industry report showed that inventories rose last week. Oil dropped as much as 1.7 percent after the American Petroleum Institute reported yesterday that oil supplies climbed 1.3 percent, the most since April, to 346.7 million barrels. The Energy Department will say in a report today that stockpiles fell 1.15 million barrels last week, according to a Bloomberg survey of analysts.“If we’re seeing actual builds in inventories, especially crude inventories, that might imply we’re seeing a bit of a rush to the market with new supply coming in,” said Brad Samples, a commodity analyst for Summit Energy Inc., an energy management company in Louisville, Kentucky.....Complete Story

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Oil Post Key Reversal Day, Lower Prices Possible Near Term

Crude oil posted a key reversal down on Tuesday and closed below the 20 day moving average crossing at 71.85 confirming that a double top with June's high as been posted. Stochastics and the RSI are diverging and are turning neutral signaling that sideways to lower prices are possible near term. The low range close sets the stage for a steady to lower opening on Wednesday.

Closes below last Monday's low crossing at 67.42 would confirm that a short term top has been posted. If October extends this month's rally, June's high crossing at 75.27 is the next upside target.

First resistance is today's high crossing at 75.00
Second resistance is June's high crossing at 75.27

First support is today's low crossing at 71.11
Second support is last Monday's low crossing at 67.42

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The U.S. Dollar closed slightly lower on Tuesday as it consolidates below the 20 day moving average crossing at 78.62. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term.

If September renews last week's decline, the reaction low crossing at 77.52 is the next downside target. Closes above last Monday's high crossing at 79.36 are needed to confirm that a short term low has been posted.

First resistance is the 10 day moving average crossing at 78.66
Second resistance is last Monday's high crossing at 79.69

First support is last Friday's low crossing at 77.81
Second resistance is the reaction low crossing at 77.52

Dennis Gartman’s 22 Rules of Trading

Natural gas closed lower on Tuesday. The mid-range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI are oversold but are neutral to bullish hinting that a short term low might be in or is near. Closes above the 20 day moving average crossing at 3.429 would confirm that a short term low has been posted.

If September extends this month's decline, monthly support crossing at 2.640 is the next downside target.

First resistance is the 10 day moving average crossing at 3.10
Second resistance is broken support crossing at 3.37

First support is Monday's low crossing at 2.73
Second support is monthly support crossing at 2.64

Bloomberg Technical Analysis: Oil Risks Drop to $71.50 If Rally Stalls

Crude oil risks falling toward $71.50 a barrel if prices are unable to surpass a “strengthening level” near $75 in the coming days, according to Societe Generale. Oil has the potential to rise as high as $78 a barrel only if it can push past a $74.65 to $75.25 band, said Stephanie Aymes, a London based commodity technical analyst for the bank. A failure to break this resistance may trigger the unwinding of gains made over the past week. Prices will “further rise but mind $74.65/$75.25,” she said in a report yesterday. “Under $71.50 the correction resumes.” Oil climbed to a 10 month high above $74 a barrel yesterday on speculation the global economy is recovering from recession.....Complete Story