The Crude Oil Trader

Wednesday, December 30, 2009

Crude Oil Bulls Maintain The Advantage Despite Profit Taking

Crude oil was slightly lower due to light profit taking overnight as it consolidates some of its recent gains. Stochastics and the RSI are overbought but remain bullish signaling that sideways to higher prices are possible near term.

If February extends this rally, the reaction high crossing at 80.40 is the next upside target. Closes below the 20 day moving average crossing at 75.38 are needed to confirm that a short term top has been posted.

Wednesday's pivot point, our line in the sand is 78.76

First resistance is Tuesday's high crossing at 79.39
Second resistance is the reaction high crossing at 80.40

First support is the 10 day moving average crossing at 76.20
Second support is the 20 day moving average crossing at 75.38

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Natural gas was slightly lower due to light profit taking overnight as it consolidates some of Monday's rally. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term.

If February extends this month's rally, the 87% retracement level of the October-December decline crossing at 6.077 is the next upside target. Closes below the 20 day moving average crossing at 5.423 would confirm that a short term top has been posted.

Natural gas pivot point for Wednesday is 5.900

First resistance is Tuesday's high crossing at 6.038
Second resistance is the 87% retracement level of the October-December decline crossing at 6.077

First support is the 10 day moving average crossing at 5.787
Second support is the 20 day moving average crossing at 5.423

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The U.S. Dollar was higher overnight as it consolidates above initial support marked by the 10 day moving average crossing at 78.15. However, stochastics and the RSI are turning neutral to bearish hinting that a short term top might be in or is near.

Closes below the 20 day moving average crossing at 77.22 are needed to confirm that a short term top has been posted. If March renews this month's rally, the 38% retracement level of the 2008-2009 decline crossing at 79.72 is the next upside target.

First resistance is last Tuesday's high crossing at 78.77
Second resistance is the 38% retracement level of the 2008-2009 decline crossing at 79.72

First support is Tuesday's low crossing at 77.67
Second support is the 20 day moving average crossing at 77.22

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Tuesday, December 29, 2009

Phil Flynn: New Year Traditions

Energy disputes between the Ukraine and Russia are becoming as much of a New Year’s tradition as the Waterford ball falling in Times Square. Once again as the new year approaches, we have another dispute between Russia and the Ukraine that may or may not be settled and rising tensions in and around Iran may cause more caution from sellers as we get ready to celebrate another holiday.

Sometimes the price gets ahead of the fundamentals. Other times the fundamentals catch up to the price. Last week in a holiday shortened trading week, oil got too excited about cold weather and a flawed weekly inventory report as the marketplace lacked the type of perspective it has when there is more volume. Yet yesterday I feared that the market might not be taking seriously enough the threats that were evolving in Europe and Iran. Of course if you assume that last week went too high and now we are holding gains it looks like once again the market had it right in the first place. It seems that rising geo-political heat is in part helping justify the extended rise.....Read the entire article.

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Precious Metals Market Commentary For Tuesday Evening

Gold closed lower on Tuesday ending a three day short covering rally off last week's low. The low range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI have turned bullish hinting that a short term low might be in or is near.

Closes above the 20 day moving average crossing at 1133.20 are needed to confirm that a short term low has been posted. If February renews this month's decline, the 38% retracement level of this year's rally crossing at 1032.60 is the next downside target.

First resistance is Monday's high crossing at 1114.50
Second resistance is the 20 day moving average crossing at 1133.20

First support is last Tuesday's low crossing at 1075.20
Second support is the 38% retracement level of this year's rally crossing at 1032.60

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Silver closed sharply lower on Tuesday ending a three day correction off last week's low. Today's decline was attributed to book squaring ahead of year's end and a slight rebound in the Dollar. Additional pressure came from strength in the equity markets. The low range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI have turned bullish hinting that a short term low might be in or is near.

Closes above the 20 day moving average crossing at 17.709 are needed to confirm that a short term low has been posted. If March renews this month's decline, the reaction low crossing at 16.155 is the next downside target.

First resistance is the 20 day moving average crossing at 17.709
Second resistance is this month's high crossing at 19.500

First support is last Tuesday's low crossing at 16.780
Second support is the reaction low crossing at 16.155

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Copper posted an inside day with a lower close due to profit taking on Tuesday as it consolidated recent gains. The low range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term.

If March extends the late December rally, the 87% retracement level of the 2008 decline crossing at 347.94 is the next upside target. Closes below the 20 day moving average crossing at 319.52 are needed to confirm that a short term top has been posted.

First resistance is Monday's high crossing at 334.40
Second resistance is the 87% retracement level of the 2008 decline crossing at 347.94

First support is the 20 day moving average crossing at 319.52
Second support is the reaction low crossing at 308.15

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Natural Gas Profits: One Minute Trade

All natural gas stocks are not traded equally - time to take money off the table of Piedmont Natural gas - PNY

Crude oil closed higher for the fifth day in a row on Tuesday as it extends the rally off this month's low. Profit taking tempered early session gains and the mid range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term.

If February extends this rally, the reaction high crossing at 80.40 is the next upside target. Closes below the 20 day moving average crossing at 75.43 would confirm that a short term top has been posted.

First resistance is today's high crossing at 79.39
Second resistance is the reaction high crossing 80.40

First support is the 10 day moving average crossing at 75.59
Second support is the 20 day moving average crossing at 75.43

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Natural gas closed lower due to profit taking on Tuesday as it consolidates some of this month's rally. The low range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are overbought but are neutral to bullish signaling that sideways to higher prices are possible near term.

If February extends this month's rally, the 87% retracement level of this fall's decline crossing at 6.077 is the next upside target. Closes below the 20 day moving average crossing at 5.374 would temper the near term friendly outlook in the market.

First resistance is today's high crossing at 6.038
Second resistance is the 87% retracement level of this fall's decline crossing at 6.077

First support is the 10 day moving average crossing at 5.762
Second support is the 20 day moving average crossing at 5.374

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The U.S. Dollar closed higher due to short covering on Tuesday as it consolidated some of the decline off last week's high. The high range close sets the stage for a steady to higher opening on Wednesday.

Stochastics and the RSI are overbought and are turning bearish hinting that a short term top might be in or is near. Closes below the 10 day moving average crossing at 78.06 would signal that a short term top has likely been posted.

Closes below the 20 day moving average crossing at 77.05 would confirm that a short term top has been posted. If March renews the current rally, the 38% retracement level of the 2008-2009 decline crossing at 79.72 is the next upside target.

First resistance is last Tuesday's high crossing at 78.77
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 78.06
Second support is the 20 day moving average crossing at 77.05

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Oil Hits Five Week High, Nears $80

Oil prices gained for a fourth straight session, climbing to their highest level in more than five weeks as cold weather swept across the country and the dollar weakened. Crude oil for February delivery rose 72 cents, or nearly 1%, to settle at $78.77 a barrel, the highest since Nov. 18, when prices settled at $79.58 a barrel.

Cooler than normal temperatures have supported rising oil prices, said James Cordier, president of Liberty Trading Group. He added that temperatures in the Northeast have been about five degrees lower than average and are expected to remain that way for the near term.

Prices were also boosted by a softer dollar, which edged lower against its major rivals. Crude oil, like other commodities, is priced in dollars, and a weaker greenback can help support prices.....Read the entire post.

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Oil Fluctuates as Heating Oil Climbs, U.S. Dollar Gains Against Euro

Crude oil fluctuated as heating oil rose to a two-month high on forecasts for cold weather in the U.S. and the dollar strengthened against the euro, reducing the appeal of commodities as an alternative investment. Oil touched a five week high earlier today on the outlook for below normal temperatures for much of the nation next week. Reports signaling that the U.S. economy may be rebounding from the worst recession since World War II bolstered the dollar, pressuring commodities.

“Another arctic blast is supportive,” said Phil Flynn, vice president of research at PFGBest in Chicago. “Still, we’re up a little bit on the dollar, and that’s a reason for people to get out of the upside on crude.” Crude oil for February delivery rose 2 cents to $78.79 a barrel at 12:39 p.m. on the New York Mercantile Exchange. Earlier, it touched $79.39, the highest level since Nov. 23.

Heating demand is expected to be above normal in the Northeast, Southeast and central U.S. for most of the week through Jan. 5, David Salmon, a forecaster at Weather Derivatives in Belton, Missouri, said in a report today.....Read the entire article.

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Crude Oil Technical Outlook For Tuesday

With 4 hours MACD crossed below signal line, an intraday top might be in place and bias is turned neutral for some consolidations. Nevertheless, we'd expect downside to be contained by 76.19 support and bring another rise. Current development indicates that choppy fall from 82.0 has completed at 68.59 already. Rise from there is expected to continue to retest this 82.0 resistance next.

In the bigger picture, the strong rebound from put crude oil back above 55 days EMA and dampens the bearish view that it has topped out at 33.2. We'll stay neutral for the moment with focus on 82.0 resistance. Break there will indicate that whole medium term rise from 33.2 is still in progress. Nevertheless, focus will remain on reversal signal as we'd expect such rise to conclude inside 76.77/90.24 fibo resistance zone.....Nymex Crude Oil Continuous Contract 4 Hours Chart.

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Crude Oil and Natural Gas Market Commentary For Tuesday Morning

Crude oil was slightly lower due to light profit taking overnight as it consolidates some of last week's rally. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term.

If February extends this rally, the reaction high crossing at 80.40 is the next upside target. Closes below the 20 day moving average crossing at 75.42 are needed to confirm that a short term top has been posted.

Monday's pivot point, our line in the sand is 78.55

First resistance is Monday's high crossing at 79.12
Second resistance is the reaction high crossing at 80.40

First support is the 10 day moving average crossing at 75.58
Second support is the 20 day moving average crossing at 75.42

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Natural gas was lower due to light profit taking overnight as it consolidates some of Monday's rally. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term.

If February extends this month's rally, the 87% retracement level of the October-December decline crossing at 6.077 is the next upside target. Closes below the 20 day moving average crossing at 5.380 would confirm that a short term top has been posted.

First resistance is the overnight high crossing at 6.025
Second resistance is the 87% retracement level of the October-December decline crossing at 6.077

Natural gas pivot point for Monday is 5.938

First support is the 10 day moving average crossing at 5.774
Second support is the 20 day moving average crossing at 5.380

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The U.S. Dollar was lower overnight and trading below initial support marked by the 10 day moving average crossing at 78.02. Stochastics and the RSI are overbought and are turning bearish hinting that a short term top might be in or is near.

Closes below the 20 day moving average crossing at 77.03 would confirm that a short term top has been posted. If March renews this month's rally, the 38% retracement level of the 2008-2009 decline crossing at 79.72 is the next upside target.

First resistance is last Tuesday's high crossing at 78.77
Second resistance is the 38% retracement level of the 2008-2009 decline crossing at 79.72

First support is the overnight low crossing at 77.71
Second support is the 20 day moving average crossing at 77.03

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