Crude Oil Daily Technical Outlook

Crude oil's consolidation was contained above 68.10 and rise from 65.05 resumed by breaking 69.93 resistance. FUrther upside should be seen in near term to 73.16 resistance first. As discussed before, break there will indicate that fall from 75.0 has completed at 65.05 already. The corrective structure will in turn indicate that medium term rally is still in progress for another high above 75.0 before completion. On the downside, below 68.10 will suggest that rebound from 65.05 has completed and will flip intraday bias back to the downside. Break of 65.05 will affirm the original bearish view that crude oil has topped out at 75.0 already and will bring fall resumption towards 58.32 key support next.

In the bigger picture, the lack of follow through selling so far dampens the bearish view that crude oil's medium term rise from 33.2 has completed at 75.0. Nevertheless, risk remains on the downside as long as 73.16 resistance holds. A break below 65.05 support will solidify the case the crude oil has topped out in medium term again. In such case, deeper fall should be seen to test on 58.32 cluster support (38.2% retracement of 33.2 to 75.0 at 59.03) first and break will target a retest of 33.2 low. However, a break of 75.0 will indicate that rise from 33.2 has resumed for 76.77/90.24 fibo resistance zone (38.2% and 50% retracement of 147.27 to 33.2) instead.....Here is the charts!

Macroeconomic Forces Rescue Oil Prices Once Again

Maybe the economy isn't so bad after all. Thank you sir may I have another? Oil prices knocked for a loop after last Friday's jobs number came struggling back as the rest of the commodity complex brought the petroleum markets back kicking and screaming. A rebound in the non manufacturing number from the Institute for Supply Management took away some of the sting from last week's dismal jobs report. Oil tried to ignore the ISM non manufacturing number that showed that the service sector grew in September for the first time in a year, yet with all of the outside macroeconomic forces and commodities screaming higher in just about every other sector, it was not to be.

The index rose 50.9 percent from 48.4 percent in August giving us hope that perhaps there may be some energy demand after all. Now, throw in some rumors about the dollar's dominance and we saw oil fail to break the rock solid support at $68 a barrel and propel itself back into its endless trading range. Oil is moving lower but not in real terms but in dollar terms as nations are rumored to replace the dollar as its means of trade.....Read the entire article!

Oil Rises a Second Day as Weak Dollar Boosts Investment Appeal

Crude oil rose for a second day in New York as the dollar’s decline bolstered the appeal of commodities as a hedge against inflation. Crude traded near $71 a barrel as the dollar weakened following a report that Arab states held talks on replacing the U.S. currency in oil trades. Saudi Arabia’s central bank Governor Muhammad al-Jasser denied the report. Prices climbed yesterday after data showed U.S. service industries returned to growth following 11 months of contraction.

“The weaker dollar is always supportive for all commodities,” said Tobias Merath, a commodity analyst at Credit Suisse Group in Singapore. “We could see another couple of dollars upside for oil from the dollar, but it won’t be decisive. We’d need some change in the fundamentals to break out of this $68-to-$74 range.” Crude oil for November delivery rose as much as $1.22, or 1.7 percent, to $71.63 a barrel in electronic trading on the New York Mercantile Exchange. It was at $71.47 a barrel at 1:20 p.m. London time.....Read the entire article

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Crude Oil Higher, Bulls Take The Advantage Overnight

Crude oil was higher overnight as it extends last week's rally. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term. If November extends last week's rally, the reaction high crossing at 73.58 is the next upside target. Closes below Monday's low crossing at 68.05 would temper the near term friendly outlook in the market.

Tuesday's pivot point, our line in the sand is 69.75

First resistance is the overnight high crossing at 71.63.
Second resistance is the reaction high crossing at 73.58.

First support is the 10 day moving average crossing at 68.05.
Second support is the reaction low crossing at 65.05.

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Natural gas was higher overnight as it extends the rally off September's low. Stochastics and the RSI are diverging but are turning neutral to bullish signaling that sideways to higher prices are possible near term.

If November extends the rally off September's low, August's high crossing at 5.133 then the 50% retracement level of this year's decline crossing at 5.320 are the next upside targets. Closes below last Friday's low crossing at 4.351 would confirm that a short term top has been posted.

Natural gas pivot point for Tuesday is 4.91

First resistance is the overnight high crossing at 5.08
Second resistance is August's high crossing at 5.13

First support is the 10 day moving average crossing at 4.84
Second support is the 20 day moving average crossing at 4.60

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The U.S. Dollar was lower overnight as it extends the decline off last week's high. Stochastics and the RSI are turning bearish signaling that sideways to lower prices are possible near term. If December extends the overnight decline, September's low crossing at 76.05 is the next downside target. Closes above last week's high crossing at 77.74 would confirm that a short term low has been posted.

First resistance is last Tuesday's high crossing at 77.74
Second resistance is September's high crossing at 79.29

First support is the overnight low crossing at 76.40
Second support is September's low crossing at 76.05

The Market Oracle: Betting on Commodities, Especially Crude Oil

In 2008, prices of oil, natural gas, gold, silver, copper, corn, wheat, and most other commodities reached multi-year, and in some cases multi-decade, highs. They’ve fallen sharply since then, but commodities aren’t going out of business. Another peak is coming, and it will be far higher, especially for oil. The price run up to 2008 came as a debt induced economic acceleration in the developed countries sucked in imports from the emerging economies of Asia. Virtually all the world was gobbling up commodities, but supplies were still choked by the preceding decades of underinvestment in mine development, processing plants, pipelines, railroads, and other elements of the industrial infrastructure needed for producing and transporting raw materials.

Faster consumption and static production capacity had an unsurprising effect prices rose. Then they rose some more and kept on rising. And in the later stages of the commodity price boom, investors, especially hedge funds, joined the bidding as a way to bet on a growing world economy. More bidders, more price push. But not forever. When the credit bubble that had been overstimulating just about every industry became unsustainable and financial markets everywhere collapsed, commodity prices collapsed along with them in anticipation.....read the entire article

Oil Trades Near $70 After Rising as Equities Gain, Dollar Falls

Crude oil traded little changed near $70 a barrel in New York after rising yesterday on optimism fuel demand will increase amid improved prospects for an economic recovery in the U.S., the biggest energy consumer.

Stocks climbed as a report from the Institute for Supply Management showed that U.S. service industries returned to growth after 11 months of contraction. Commodities also gained as the falling dollar bolstered the appeal of raw materials as a hedge against inflation.

“The major headline supporting the rally was the September ISM non manufacturing report showing positive growth,” said Mike Sander, an investment adviser at Sander Capital in Seattle. “Oil was pushed higher thanks to the 100 point move in the Dow Jones” Industrial Average, he said.....Read the entire article

Phil Flynn of PFG Best "Jobs Jab Oil Bulls"

Jobs losses are mounting and oil supplies are rising. It is time to face facts. Recent economic data is undermining the bull's oil case. Welcome to the jobless economic recovery that should reduce oil demand expectations even further as we look out into our future. Oil prices slid as our nation's unemployment reached a painful 9.8% and we lost 263,000 jobs. The oil bulls had better hope the dollar collapses if they are going to have any luck defending these lofty price levels. US supplies are staggering but even more so when you consider the weakened state of the jobs market. With the US being a consumer based economy, it does not bode well for a quick return to robust growth.....Read the entire article

Open Interest Surge Signals Peak as Traders See Slump

Investors are snapping up commodities at the fastest pace in 18 months just as stockpiles of raw materials rise and shipping rates plunge, signaling that prices may be poised to fall. Open interest, or contracts yet to be closed, liquidated or delivered, rose 6.6 percent in the third quarter for the 20 most traded U.S. commodities, exchange data compiled by Bloomberg show. That’s the steepest gain since the first three months of 2008, just before the credit market freeze sent prices plunging from records.

While the U.S. economy shows signs of bottoming after the deepest financial crisis since the Great Depression, supplies of raw materials are growing faster than demand. Oil inventories rose 15 percent in the past year, Energy Department figures show. The Baltic Dry Index, a barometer for raw material demand, slid 41 percent in the third quarter. Alcoa Inc., the largest U.S. aluminum company, will report an adjusted loss of 83 cents a share this year, based on the average estimate of analysts. “We’ve been moving out of our commodity holdings and into cash,” said Peter Sorrentino, who.....Read the entire article

Here is Some Potential Mega Trades For Q4

It seems to me that we are at an inflection point in the economy. The government has blown pretty much all of its money and the economic recovery and the economy is still sputtering along. No surprise there.

So what’s going to happen? We believe that we’ll have another economic downturn which is going to push the dollar to new lows, push gold to new highs, and push the equity markets back down to their March lows.

Yes, I know it’s a scary scenario but that’s what could potentially happen. We are just looking for one or two more pieces to fall into place and then we could see the unfolding of a very dramatic set of economic conditions here in the United States.

This new video looks at gold, the dollar, and the S&P 500. I believe if you’re interested in your economic future you need to watch this video.

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Crude Oil Trades Below $70 After Falling on Recovery Concern

Crude oil traded below $70 a barrel in New York after falling on concern that oil demand in the U.S., the biggest energy consuming nation, will be slow to rebound after the jobless rate increased. Oil prices dropped as much as 3.5 percent on Oct. 2 after the U.S. lost more jobs than estimated in September. Economist Nouriel Roubini, the New York University professor who predicted the financial crisis, said Oct. 3 that stock and commodity markets may drop in coming months as the gradual pace of the economic recovery disappoints investors.

“There was weak data coming out of the U.S. and equity markets were weaker,” Mark Pervan, senior commodity strategist at ANZ Banking Group Ltd. in Melbourne, said by phone today. “It’s all pointing downwards.” Crude oil for November delivery traded at $69.88 a barrel, down 7 cents, in electronic trading on the New York Mercantile Exchange at 10 a.m. Singapore time.....Read the entire article