CNBC's Sharon Epperson discusses the day's activity in the commodities markets, and looks ahead to where oil is likely headed next week.
Sunday, December 20, 2009
Saturday, December 19, 2009
Crude Oil Weekly Technical Outlook
Crude oil's recovery from 68.58 extend further to as high as 74.69 last week and is probably still in progress. Further rise could still be seen initially this week. But after all, upside is expected to be limited by 61.8% retracement at 76.87 and bring resumption of the fall from 82.0. On the downside, below 71.21 will indicate that recovery from 68.58 has completed and will flip intraday bias for this support first. Break will target 65.05 key support next. However, decisive break of 76.87 fibo resistance will argue that fall from 82.0 has completed and will turn focus back to this resistance.
In the bigger picture, at this point, crude oil is still limited by 55 days EMA (now at 74.52) and hence, we're favoring the case that medium term rise from 33.2 has completed at 82.0 with bearish divergence condition in daily MACD. Another fall is expected after finishing the current recovery from 68.58 and a break there will target 58.32 cluster support (50% retracement of 33.2 to 82 at 57.60). Break there will confirm this bearish case and indicate that the down trend from 147.27 might be resuming for another low below 33.2. However, sustained trading above mentioned 76.87 will dampen this bearish view and argue that another high above 82.0 might be seen before crude oil tops in 76.77/90.24 fibo resistance zone
In the long term picture, there is no change in the view that fall from 147.27 is part of the correction to the five wave sequence from 98 low of 10.65. While the rebound from 33.2 is strong and might continue, there is no solid evidence that suggest fall 147.27 is completed and we're still preferring the case that rebound from 33.2 is merely a corrective rise only. Having said that strong resistance should be seen between 76.77/90.24 fibo resistance zone and bring reversal for another low below 33.2 before completing the whole correction from 147.27.....Nymex Crude Oil Continuous Contract 4 Hours Chart.
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Growing Power of Iraqi Kurdistan Could Backfire on Tehran
Iran's strategy to break Iraq into three component territories, and to dominate those territories in order to reduce regional opposition and to gain unfettered access to Syria and the Mediterranean as a result of the Western invasion of Iraq in 2004, has had profound success. The country is now, at best, a federation, with elements of a slide toward confederacy or even the breaking away of some territory. Iran dominates, and will increasingly dominate, the Shi'a controlled central heartland and the Government of Iraq, particularly when US and Coalition forces depart. Iraq's northern, and predominantly Kurdish, region is now virtually an independent state. It is certainly an autonomous state.
And yet the solution which Tehran sought, the break-up of Iraq, may hold more problems for it than a unified Iraq, as the modern Iraqi state was created under British tutelage in 1922. Indeed, the Kurds, who had been financially swayed by both Baghdad and Tehran for decades, may feel sufficient strength that the foundations of a sovereign state can be laid. That sovereign state would, as the Iraqi Kurds have made clear — have aspirations on territory inside Iran, in Syria, and, significantly, Turkey (and possibly Azerbaijan and Armenia). In that respect, the Turkish-Iranian-Syrian rapprochement could not have come at a more propitious time. This reality, too, fuels the momentum in Ankara toward phasing out its strategic relationship with Israel. A Turkey-Armenia-Iran arrangement would help curtail Kurdish dreams of unity (even though the Kurdish tribes have historically been anything but trusting of each other, in many respects). And, fueling Ankara's concerns has been the heavy Israeli commercial involvement in the.....Read the entire article.
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Friday, December 18, 2009
Crude Oil Closes Higher, Signaling Higher Prices Are Possible Near Term
Crude oil closed higher due to short covering on Friday as it extends this week's rally. Profit taking tempered early session gains and the low range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI have turned bullish with this week's rally signaling that sideways to higher prices are possible near term.
Closes above the 20 day moving average crossing at 74.27 are needed to confirm that a short term low has been posted. If January resumes the decline off October's high, the 87% retracement level of this fall's rally crossing at 68.16 is the next downside target.
First resistance is the 20 day moving average crossing at 74.27
Second resistance is today's high crossing at 74.69
First support is the 10 day moving average crossing at 71.62
Second support is Monday's low crossing at 68.59
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Natural gas closed slightly higher on Friday as it extends this month's rally. Profit taking tempered early session gains and the low range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term.
If January extends this month's rally, the 87% retracement level of this fall's decline crossing at 6.036 is the next upside target. Closes below the 20 day moving average crossing at 5.058 would temper the near term friendly outlook in the market.
First resistance is today's high crossing at 5.926
Second resistance is the 87% retracement level of this fall's decline crossing at 6.036
First support is the 10 day moving average crossing at 5.330
Second support is the 20 day moving average crossing at 5.058
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The U.S. Dollar closed higher on Friday as it extends this month's rally. The mid range close sets the stage for a steady opening on Monday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term.
If March extends its current rally, the 38% retracement level of the 2008-2009 decline crossing at 79.72 is the next upside target. Closes below the 20 day moving average crossing at 76.14 would temper the near term friendly outlook in the Dollar.
First resistance is today's high crossing at 78.50
Second resistance is the 38% retracement level of the 2008-2009 decline crossing at 79.72
First support is the 10 day moving average crossing at 77.02
Second support is the 20 day moving average crossing at 76.14
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Iraq Accuses Iran of Violating Border, Demands Withdrawal From Territory
Iraq’s National Security Council said today that Iran violated their shared border and Iraq’s “territorial integrity” and called on the Islamic republic to withdraw its forces from the region. Iraq summoned the Iranian ambassador in Baghdad and has begun “diplomatic steps” to resolve the situation, Iraqi government spokesman Ali Al Dabbagh said in a statement after a meeting of the security council.
Iranian forces entered Iraq at dawn yesterday and occupied an oil well in the East Maysan oil field, Zafer Nazmi, a border guard general, said earlier today. The Iranian forces positioned tanks around the well in the al-Fakah region, 450 kilometers (280 miles) south of Baghdad. The two neighbors have disputed the border of southeast Iraq for decades.
“The council stressed that the incursion is a violation of Iraq’s border and territorial integrity and called on Iran to withdraw from well 4 and lower the Iranian flag from the well tower immediately,” according to the statement. Crude oil for January delivery rose 71 cents, or 1 percent, to settle at $73.36 a barrel today on the New York Mercantile Exchange. It rose as much as 2.8 percent in intraday trading on news of the incursion.....Read the entire article.
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New Video: As the Dow Goes, So Goes the Country
The Dow has managed to claw back 50% of the losses that occurred in 2007 and 2008. The question now is, what’s ahead?
In our new video we share with you some of the ideas that we are looking at for this index. We believe we are at a very important crossroads and would not be surprised to see this market lose ground in the next 3 to 6 months. In the video we also show you exactly what we are looking at that will confirm a major top for this index.
Just click here to watch the new video and as always our videos are free to watch and there is no need to register.
Good trading,
Ray C. Parrish
President/CEO
Crude Oil Trader
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Crude Oil Bulls Attempt to Gain The Momentum Trading Above The 10 Day Moving Average
Crude oil was higher overnight as it extends this week's short covering rally above the 10 day moving average. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term.
Closes above the 20 day moving average crossing at 74.33 are needed to confirm that a short term low has been posted. If January resumes the decline off October's high, the 87% retracement level of this fall's rally crossing at 68.16 is the next downside target.
Friday's pivot point, our line in the sand is 72.33
First resistance is the overnight high crossing at 74.29
Second resistance is the 20 day moving average crossing at 74.33
First support is the 10 day moving average crossing at 71.74
Second support is Monday's low crossing at 68.59
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Natural gas was higher overnight and is extending this month's rally above the 75% retracement level of the October-December decline crossing at 5.807. Stochastics and the RSI are overbought but remain bullish signaling that sideways to higher prices are possible near term.
If January extends this month's rally, the 87% retracement level of the October-December decline crossing at 6.036 is the next upside target. Closes below the 20 day moving average crossing at 5.065 would temper the near term bullish outlook in the market.
Natural gas pivot point for Friday is 5.711
First resistance is the overnight high crossing at 5.920
Second resistance is the 87% retracement level of the October-December decline crossing at 6.036
First support is the 10 day moving average crossing at 5.344
Second support is the 20 day moving average crossing at 5.065
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The U.S. Dollar was lower due to profit taking overnight as it consolidates some of this month's rally. Stochastics and the RSI are overbought but remain neutral signaling that additional gains are possible near term.
If March extends this month's rally, the 38% retracement level of the 2008-2009 decline crossing at 79.72 is the next upside target. Closes below the 20 day moving average crossing at 76.13 would confirm that a short term top has been posted.
First resistance is Monday's high crossing at 78.28
Second resistance is the 38% retracement level of the 2008-2009 decline crossing at 79.72
First support is the 10 day moving average crossing at 76.99
Second support is the 20 day moving average crossing at 76.13
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Crude Oil and Natural Gas Technical Outlook For Friday Morning
Nymex Crude Oil (CL)
Crude oil's rebound extends further and further rise could still be seen as long as 71.21 minor support holds. Nevertheless, we'd still expect upside to be limited by 61.8% retracement at 76.87 and bring resumption of the fall from 82.0. On the downside, below 71.21 will indicate that recovery from 68.58 has completed and will flip intraday bias for this support first. Break will target 65.05 key support next.
In the bigger picture, we're favoring the case that medium term rise from 33.2 has completed at 82.0 with bearish divergence condition in daily MACD. The break of medium term trend line support last week affirms this case and should pave the way to 58.32 cluster support (50% retracement of 33.2 to 82 at 57.60) for confirmation. As noted before, rise from 33.2 is treated as part of the correction pattern that started at 147.27. Firmed break of 58.32 support will argue that the down trend from 147.27 might be resuming for another low below 33.2. On the upside, break of 79.04 resistance is needed to invalidate this view, otherwise, outlook will remain bearish.....Nymex Crude Oil Continuous Contract 4 Hours Chart.
Nymex Natural Gas (NG)
Natural gas rises further to as high as 5.926 so far and at this point, intraday bias remains on the upside for 61.8% projection of 2.409 to 5.318 from 4.157 at 5.955. Break will target 38.2% retracement of 13.694 to 2.409 at 6.72 next. On the downside, below 5.57 minor support will suggest that an intraday top is formed and bring consolidations. But downside should be contained well above 4.837 support and bring rally resumption.
In the bigger picture, medium term fall from 13.69 is treated as part of the long term consolidation pattern that started at 15.78 back in 2005 and might have completed at 2.409 already. Rise from 2.409 resumes as expected after consolidations from 5.318 completed. Current rally should now be targeting 38.2% retracement of 13.694 to 2.409 at 6.72 and beyond. Break of 4.432 support is needed to indicate that natural gas has topped. Otherwise, outlook will remain bullish.....Nymex Natural Gas Continuous Contract 4 Hours Chart.
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Thursday, December 17, 2009
New Video: It’s Official Silly Season for Gold
We are already in the “silly season” and what we mean by that is after December 15 most traders are not serious about the markets and they’re not committed to any large positions for the balance of the year.
We’ve had a number requests to do a video on gold, so here it is. As you will see in the video, gold has fallen back to an area that should provide support, however it will remain choppy and thinly traded for the balance of the year.
We strongly recommend that if you’re not in gold, to wait until we see more interest and activity coming into 2010.
Just click here to watch the new video and as always our videos are free to watch and there is no need to register. Please take a minute to leave a comment and let us know where you think Gold is headed.
Good trading,
Ray C. Parrish
President/CEO
The Crude Oil Trader
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Where is Crude Oil Headed on Friday?
CNBC's Sharon Epperson discusses the day's activity in the commodities markets, and looks ahead to where oil is likely headed tomorrow.
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