Gold Is Heavy But Could Rebound Here

Although December’s heavy sell off in the Gold (and Silver) market confirmed a significant set of monthly and weekly cycle highs, highs that may take this metal some time to meet/exceed, there now appears to be plenty of credible technical evidence to suggest that Gold may be ready to mount a minor rebound rally back up toward the $1,125 to $1,135 price zone. There are a couple of key market analysis tools that we can rely on to see if we can both confirm and then capitalize on a possible swing back up to a major Fibonacci resistance zone. Let’s take a closer look right now.



On December 22, March Gold made a major cycle low on its 78 minute chart at $1,075.20 (See point ‘A’ on the chart. Yes, ‘78’ is close to a significant Fibonacci ratio) and then began to slowly reverse higher. The spread between the 50 and 200 period exponential moving averages (EMA’s) was near an extreme at the time of the dead low but have begun to progressively narrow since then. Along with the narrowing spread (which typically indicates a period of price consolidation), March Gold also managed to make a higher swing low (point ‘B’ on the chart) on December 30, 2009. This higher swing low also permitted the plotting of a major uptrend line (gold dashed line), one that will be a wonderful trend determining assist for both intraday and daily based swing traders in the days and weeks to come.

Higher Lows
Once the first higher low was made (which was also a cycle low) at point ‘B,’ prices accelerated higher, bouncing back lower after colliding with the 200 period EMA (pink rectangle) before forming yet another higher swing low. Not surprisingly, this fresh 78 minute swing low has allowed us to plot a slightly more aggressive uptrend line (blue dashed line), which, if it should hold, is a prime clue that Gold intends to meet and then likely exceed the 200 day EMA (currently near $1,106) on a close. As most technicians know, a close above the 200 period EMA is a bullish development, and one that a zillion traders and money managers use to determine the long term trend for a given time frame. Additionally, if the 50-period EMA (red line) crosses above the 200 period EMA (blue line) a second bullish confirmation occurs, one known as a ‘Golden Cross.’ Traders frequently wait for a pullback toward the 50-period EMA after such a crossover to initiate new long positions. Should we see this crossover occur, that might also be an excellent way to help time a series of daily or intraday (60 or 78 minute) swing trade(s), looking for Gold to move higher into significant Fibonacci resistance.....Read the entire article

Just click here for your FREE trend analysis of GLD


Share

Crude Oil Rises on Optimism About Economic Recovery in the U.S.

Crude oil rose in New York on optimism fuel demand will increase amid improved prospects for an economic recovery in the U.S., the biggest energy consumer. Oil extended its rally to an eighth day amid forecasts the worst U.S. employment slump since World War II may have almost ended in December. Cold U.S. weather has increased demand for distillates, a category of products that includes heating fuels. “There are further indications that the recovery is progressing,” Ben Westmore, a minerals and energy economist at National Australia Bank in Melbourne, said today. The decline in distillate product supplies is “looking good,” he said. “The market is expecting further draw downs. Hopefully we see that this week.”

Crude oil for February delivery rose 48 cents, or 0.6 percent, to $79.84 a barrel on the New York Mercantile Exchange at 10:44 a.m. Sydney time. It closed at $79.36 on Dec. 31. Prices touched a 2009 low of $32.70 a barrel on Jan. 20 as the recession reduced demand, and reached as high as $82 on Oct. 21, partly because a weaker dollar bolstered the investment appeal of commodities, including gold. Futures climbed 78 percent last year and tripled over the past decade.....Read the entire article.

Get your favorite symbols' Trend Analysis TODAY!

Share

Commodites Shone in 2009, Will the Trend Keep in 2010?

The commodity sector performed very well in 2009 with the Reuters/ Jefferies CRB Index rising +23% on annual basis. Central banks worldwide reduced policy rates to record low levels and implemented stimulus programs to combat the worst recession since WWII. While it's yet to say the world has exited recession, improvements in economic data have showed that recovery is underway.



Crude Oil

Geopolitical tension, inventory decline, cold weather and strong macro data firmed oil price in the last week of 2009 and paved the way for a good start in 2010. The February contract touched 80 and closed at 79.36 Thursday, up 1.7% on weekly basis. Crude oil experienced a volatile 2009 with price diving to as low as 32.7 in January and then rallying to 82 in October. The annual gain of 78% has marked the best performance since 1999. Both industry-specific and macro data were supportive for crude oil last week. Crude inventory drew -1.54 mmb to 326 mmb in the week ended December 25. This 4th-consecutive weekly decline has brought the stockpile to the lowest level since January. Distillate stockpile also dipped for the 3rd week, by -2.06 mmb, to 159.3 mmb while gasoline stockpile drew -0.37 mmb to 216 mmb.

Economic indicators released over the week indicated recovery is underway. Initial jobless claims dropped to 432K, the lowest level since 2008, (consensus: 455 K) in the week ended December 26 from 452K in the prior week. Moreover, continuing claims also slid -57K. On manufacturing and sentiment fronts, Chicago PMI rose to 60 in December from 56.1 a month ago while consumer confidence improved to 52.9 from 49.5. The data fueled optimism about US' growth in 2010.....Read the entire article on crude oil, natural gas and precious metals.

Check out the new "Trend TV"

Share

Heating Oil Hits 13 Month High as Frigid Weather Cuts Supplies

Heating oil reached a 13 month high as the frigid weather that has drained distillate supplies was projected to extend into January, increasing demand for the motor fuel.
The U.S. Climate Prediction Center forecast below normal temperatures from Texas to Maine from Jan. 5 to Jan. 13. Distillate stockpiles fell to the lowest since July, the Energy Department reported yesterday. “Heating oil is going out stronger for the year primarily because they keep extending the cold weather forecast,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut.

Heating oil for January delivery rose a seventh straight day, gaining 0.95 cent, or 0.5 percent, to settle at $2.1188 a gallon on the New York Mercantile Exchange, the highest settlement price since Nov. 4, 2008. Futures advanced 4.1 percent this week and gained 5 percent in December. January contracts for heating oil and gasoline expired at the end of trading today. The more actively traded February heating oil contract fell 0.46 cent to settle at $2.1156. January flipped to a 0.32 cent premium to February, from a discount of 2.06 cents on Dec. 24, indicating tighter supplies.....Read the entire article.

Check out the new "Trend TV"

Share

Do I Hear Seven Days? Crude Oil Closes Higher....AGAIN!

Crude oil closed higher for the seventh day in a row on Thursday as it extends the rally off this month's low. Profit taking tempered early gains and 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 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 75.47 would confirm that a short term top has been posted.

First resistance is today's high crossing at 80.00
Second resistance is the reaction high crossing 80.40

First support is the 10 day moving average crossing at 76.77
Second support is the 20 day moving average crossing at 75.47

Check out the new "Trend TV"

Natural gas closed sharply lower for the third day in a row on Thursday. The low range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are overbought, diverging and are turning bearish signaling that sideways to lower prices are possible near term.

Closes below the 20 day moving average crossing at 5.465 would confirm that a short term top has been posted. If February extends December's rally, the 87% retracement level of this fall's decline crossing at 6.077 is the next upside target.

First resistance is Tuesday'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 today's low crossing at 5.505
Second support is the 20 day moving average crossing at 5.465

Get 4 FREE Trading Videos from INO TV!

The U.S. Dollar closed lower on Thursday ending a two day short covering bounce. However, the high range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are neutral to bearish hinting that a short term top might be in or is near.

Closes below the 20 day moving average crossing at 77.38 are needed 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 Tuesday's low crossing at 77.67
Second support is the 20 day moving average crossing at 77.38

MarketClub Alerts in Action and Explained

Share

Year End Commodity & ETF Trend Trading Signals

Well, here we are with only hours left before the year is over. Virtually every investment is up other than the US dollar. Not much has changed since my last gold market trends report. But I have provided some interesting charts that show us what is possible in the coming weeks for the dollar, gold and natural gas.

US Dollar Trend Analysis – Resistance Levels
The dollar has shown some strength in the past month. It was a no brainer trade for 2009. You were either long gold or short the dollar. The chart below shows the key resistance levels for the $USD. I have a feeling we are going to see the dollar test the 80 -81 levels before rolling over and heading south again.

If this happens then gold and silver will continue to pull back. I am actually hoping the dollar moves higher and gold drops back to test the $1000-1060 level. This would clear the way for gold and the dollar to continue with their longer term trends with increased momentum (dollar collapses, gold goes parabolic).



GLD Gold ETF – Daily Chart
The daily gold swing trading chart is really starting to look attractive for a buy signal. Depending on what the US dollar does in the coming days will set the tone for gold.

We could see gold start to rally starting tomorrow or it will become volatile and start to sell off sharply in the coming days. Right now we have very light volume so any moves/breakouts cannot be taken seriously or with a large position.

If the dollar starts to rally we could see the GLD ETF drop to the $97.50 – $103 level.



Spot Gold Trend Analysis – 18 Day, 1hr Bar Chart
Starting in 2010 I will be providing futures trading analysis and signals so I thought I would provide a chart of the spot gold trend I have been day trading over the holidays.

This may seem like I am going against my #1 trading Rule – Never Trade Against the Trend, but the trend changes depending on time frame and trading style you are using. In short, gold reversed very strong 18 days ago just as we anticipated it would. The selling momentum was so strong it made for excellent gold futures day trading setups which I took advantage of over the past 10 trading days.

The chart below is of the 100 ounce gold GC Feb 10 futures contract which I traded. The chart is shrunk down and does not show my setups, nor does the chart look very sexy, but it clearly shows the direction of the trend and the BIG SELLING VOLUME.

The table shows my recent trades and if you take a close look all of the trades I did were Short Trades. Because the momentum and trend is down on this time frame I only traded perfect short setups (profiting from gold as it loses value).



UNG Natural Gas Trading Fund
UNG appears to be trading at resistance and starting to look like its rolling over. It did move above last weeks high which voids the reversal candle we had Tuesday and Thursday, or else it would have been a short setup for us. I don’t chase a trade, that’s my #2 rule, so I am waiting for a possible bounce here, test of resistance then another reversal back down.



Commodity & ETF Year End Trends
In short, we continue the waiting game for more setups in the coming weeks as volatility and volume creep back into the market. The dollar and gold are currently trading at pivot points and no one knows which way to play them.

Trading futures run virtually 24 hours a day and have provided some excellent trading opportunities that I will be providing in the coming weeks for traders.

Natural Gas is trading at pivot point and looking ready for another move down.

Crude oil and the board market I feel will top out in the next 2-5 days but nothing worth putting any money on at this time.

I would like to thank everyone for their kind words and support over the past 12 months. I wish you all a happy and safe New Years!

Just Click Here to sign up for FREE Weekly Newsletter and so much more from The Gold and Oil Guy.



Share

Crude Oil to Record the Strongest Annual Gain in a Decade

Crude oil edged higher to settle at 79.28, up +0.5%, Wednesday as the EIA report showed inventory draw in crude and major oil products. Tension between Iran and the Western world, potential oil exports from OPEC and market optimism after strong macro-economic data also boosted price. The February contract, currently trading at 79.6, is prone to record the third weekly gain. Crude oil price, surging almost +80% in 2009, will probably record the biggest annual increase since 1999. According to the US Energy Department, crude inventory drew -1.54 mmb to 326 mmb in the week ended December 25. Cushing stock also drew -0.19 mmb. For oil products, distillate stockpile dipped -2.06 mmb (consensus: -2.23 mmb) to 159.3 mmb. This an initial sign of moderation in the pace of inventory draw. Gasoline inventory also dropped -0.37 mmb to 216 mmb.

Decline in inventory levels in recent weeks has been sending a positive signal to investors that the energy market is improving. This is also the major reason for oil's rally these 2 weeks. However, details in fuel demand suggest we should be more cautious. 4 week averaged demand for gasoline was 9.024M bpd, compared with 9.041M bpd the same period in 2009, while the 4-week averaged demand for distillate, at 3.689M bpd , was -8.8% below the same period last year. Since the protest began on December 27 in Tehran, the Iranian government has detained about 1000 people. At the same time, Iran accuses Western countries of spurring the demonstrations. Oil prices usually get supported when turmoil occurs, especially in the Middle East as the region in rich in oil. Iran, the world's second largest oil producer, may threaten to suspend oil exports if the tension escalates.....Read the entire article.

What are you waiting for....Get 10 Trading Lessons FREE

Share

Crude Oil and Natural Market Commentary For Thursday Morning

Crude oil was higher overnight as it extends the rally off this month's low. 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 rally, the reaction high crossing at 80.40 is the next upside target. Closes below the 20 day moving average crossing at 75.47 are needed to confirm that a short term top has been posted.

Thursday's pivot point, our line in the sand is 79.18

First resistance is the overnight high crossing at 79.98
Second resistance is the reaction high crossing at 80.40

First support is the 10 day moving average crossing at 76.77
Second support is the 20 day moving average crossing at 75.47

Just click here for your FREE trend analysis of USO

Natural gas was higher due to short covering overnight as it consolidates some of Wednesday's decline but remains below broken support marked by the 10 day moving average crossing at 5.801. Stochastics and the RSI are overbought, diverging and are turning bearish signaling that sideways to lower prices are possible near term.

Closes below the 20 day moving average crossing at 5.475 are needed to confirm that a short term top has been posted. If February resumes this month's rally, the 87% retracement level of the October-December decline crossing at 6.077 is the next upside target.

Natural gas pivot point for Thursday is 5.770

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 overnight low crossing at 5.679
Second support is the 20 day moving average crossing at 5.475

Just click here for your FREE trend analysis of UNG

The U.S. Dollar was lower overnight and is trading below initial support marked by the 10 day moving average crossing at 78.20. Stochastics and the RSI have turned bearish hinting that a short term top might be in or is near.

Closes below the 20 day moving average crossing at 77.36 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 77.36

Just click here for your FREE trend analysis of UUP


Share

Do I Hear Six Days? Crude Oil Closes Higher Yet Again

Crude oil closed higher for the sixth day in a row on Wednesday as it extends the rally off this month's low. Tighter crude oil inventories were the primary factor behind today's strength in the crude oil market. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are becoming 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 75.40 would confirm that a short term top has been posted.

First resistance is today's high crossing at 79.80
Second resistance is the reaction high crossing 80.40

First support is the 10 day moving average crossing at 76.26
Second support is the 20 day moving average crossing at 75.40

Today’s Stock Market Club Trading Triangles

Natural gas closed lower due to profit taking on Wednesday and below the 10 day moving average crossing at 5.774 signaling that a short term top has likely been posted. The low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are overbought but are neutral 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 5.416 would confirm that a short term top has been posted.

First resistance is Tuesday'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 today's low crossing at 5.695
Second support is the 20 day moving average crossing at 5.416

For a free online tour of MarketClub....a risk FREE 30 day test drive...Just Click Here

The U.S. Dollar closed higher due to short covering on Wednesday as it consolidated some of the decline off last week's high. Profit taking tempered early session gains and the low range close sets the stage for a steady to lower opening on Thursday. 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 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 Tuesday's low crossing at 77.67
Second support is the 20 day moving average crossing at 77.22

What You Get with a MarketClub Membership

Share

OPEC Has Way Too Much Oil For 2010

According the Energy Information Administration's (EIA) latest energy outlook, while world energy consumption is expected to grow in 2010, it will only be adding 1.1 million barrels of consumption and will remain below its past peak consumption.
This tepid demand growth will butt against production increases for many non OPEC oil producers, which means that OPEC will be under substantial pressure to limit its output, and obviously will.

Yet this will require massive discipline for the member nations given that OPEC's surplus crude oil production capacity will actually rise in 2010, after a huge increase is surplus capacity during 2009. 2010 will see the worst OPEC overcapacity situation since 2002.....Let's go to the charts!.

Check out the new "Trend TV"

Share