Trade ideas, analysis and low risk set ups for commodities, Bitcoin, gold, silver, coffee, the indexes, options and your retirement. We'll help you keep your emotions out of your trading.
Arab Gulf states may get a boost from higher oil prices in 2010 but the region's real estate and banking sectors still face head winds. "We are going to see an improvement in macro economic conditions, mainly due to higher oil prices, which will trickle down to corporate activity," said Faisal Hassan, head of research at Global Investment House. The United Arab Emirates, Saudi Arabia and four other Arab Gulf states depend heavily on revenue from oil exports, which still provide about 60% of the regions foreign currency earnings.
Oil prices have more than doubled from lows of about $35 a barrel at the beginning of 2009 as fear of global economic Armageddon has given way to optimism about a recovery led from Asia. New York Mercantile Exchange crude futures averaged just above $62 a barrel in 2009, according to Zawya Dow Jones calculations. Saudi Arabia, the Middle East's economic powerhouse and its biggest oil producer, is expected to see real gross domestic product grow by 3% in 2010, after successfully averting contraction this year, according to Kuwait's Global. The kingdom is expected to record marginal real GDP growth of 0.15% in 2009.....Read the entire article.
Crude oil was higher overnight as it extends the rally off December'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 81.59 is the next upside target. Closes below the 20 day moving average crossing at 75.59 are needed to confirm that a short term top has been posted.
Monday's pivot point, our line in the sand is 79.51
First resistance is the overnight high crossing at 81.16 Second resistance is the reaction high crossing at 81.59
First support is the 10 day moving average crossing at 77.43 Second support is the 20 day moving average crossing at 75.59
Natural gas was higher due to short covering overnight as it consolidates some of last week's decline and is trading above the 10 day moving average crossing at 5.782. Stochastics and the RSI have turned bearish signaling that sideways to lower prices are possible near term.
Closes below the 20 day moving average crossing at 5.527 are needed to confirm that a short term top has been posted. If February resumes December's rally, the 87% retracement level of the October-December decline crossing at 6.077 is the next upside target.
Monday's pivot point for natural gas is 5.65
First resistance is last 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 20 day moving average crossing at 5.527 Second support is last Thursday's low crossing at 5.505
The U.S. Dollar was lower overnight and is trading below initial support marked by the 10 day moving average crossing at 78.21. 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 77.52 are needed to confirm that a short term top has been posted. If March renews last month's rally, the 38% retracement level of the 2008-2009 decline crossing at 79.72 is the next upside target.
First resistance is the reaction high crossing at 78.77 Second resistance is the 38% retracement level of the 2008-2009 decline crossing at 79.72
First support is last Tuesday's low crossing at 77.67 Second support is the 20 day moving average crossing at 77.52
Crude oil's rally from 68.59 extends further to as high as 81.16 so far and at this point, intraday bias remains on the upside for 82.0 resistance next. Recent development suggests that medium term rise from 33.2 is still in progress and bring of 82.0 high will bring rise resumption towards next key resistance level at 90. On the downside, below 79.12 minor support will turn intraday bias neutral and bring retreat, probably to 4 hours 55 EMA (now at 77.49). But break of 73.61 support is needed to indicate that crude oil has topped. Outlook short term outlook will now remain bullish.
In the bigger picture, the strong rally from 68.59 and sustained trading above 55 days EMA argues that whole medium term rise from 2009 low of 33.2 is still in progress for another high above 82.0. Above this 82.0 will target next key cluster resistance level at 50% retracement of 147.27 to 33.2 at 90.24, which is close to 90 psychological level. Nevertheless, we'll continue to look for reversal signal as rise from 33.2, which is treated as correction to whole fall from 147.27, is expected to conclude inside 76.77/90.24 fibo resistance zone. On the downside, though, break of 68.59 is needed to revive the case that crude oil has topped out in medium term. Otherwise, outlook will be neutral at worst even in case of deep pull back.
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.
Nymex Natural Gas (NG)
A short term top is in place in Natural gas at 6.035 on mild bearish divergence condition in 4 hours MACD. Intraday bias remains neutral for the moment and some more sideway consolidations could be seen below 6.035, with risk of pull back to 38.2% retracement of 4.157 to 6.035 at 5.319. Nevertheless, we'd expect 5.29 resistance turned support to hold and bring rise resumption. Above 6.035 will target 38.2% retracement of 13.694 to 2.409 at 6.72 next.
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 is still in progress and should target 38.2% retracement of 13.694 to 2.409 at 6.72 and beyond. On the downside, break of 4.157 support is needed to indicate that medium term rise from 2.409 has completed. Otherwise, outlook is neutral at worst even in case of deep pullback.....Nymex Natural Gas Continuous Contract 4 Hours Chart.
Welcome back everyone! It’s time to buckle up and get ready for another exciting year of trading.
When the market is moving on light volume I tend to focus on very short term plays to minimize my exposure to volatility. The past couple of weeks have been great for day traders and futures trades as we took advantage of the short term seasonal holiday rally in the broad market and also by shorting gold when bounces reached resistance levels.
This year I will be providing many more trades as I focus more on 60 minute trading charts to scalp the market with low risk quick reward setups. Also I will start providing futures trading analysis and signals for those who want to be more active and generate more income on a monthly basis.
DIA – Dow Jones Exchange Traded Fund – 60 Minute Chart The Dow has been trading in this range for a couple weeks providing some excellent short plays. Although I tell members not to short in a bull market, there are times when shorting in a bull market looks and feels right. The past month has been the perfect mix for shorting using the 60 minute charts.
GLD – Gold Exchange Traded Fund – 60 Minute Chart Gold is in a strong bull market but the short term charts have provided over 13 short trades in the past 2 weeks for futures traders playing the bounces to resistance levels. The triangle on the 60 minute chart with declining volume is a continuation pattern of the short term trend which is down.
Because gold is trading near a support level on the daily chart, I am waiting patiently for a perfect setup to go short, or long depending on what happens in the coming hours. I predict lower prices with $102 area for the next support level.
UNG – Natural Gas Fund – 60 Minute Chart Natural gas is trading at resistance on the daily and weekly charts. This 60 minute chart allows us to take a closer look at the intraday momentum which clearly shows there are more sellers than buyers at this level. I see lower prices in the coming hours/days.
UNG not a good fund for holding positions more than 2 weeks, it does provide excellent trading opportunities for day traders and 60 minute chart setups.
USO – Crude Oil Fund – 60 Minute Chart Crude oil had a perfect bounce off of a support level on the weekly and daily charts back on the 14th. Oil is now trading at a short term resistance level and I feel it will head lower in the coming days. We still need more price action before taking a position. Let’s watch and wait.
Trends of Gold, Dow, Oil and Natural Gas Conclusion The broad market and commodities listed above seem to be trading at resistance levels with signs of rolling over. As a technical trader the charts do all the talking and they are pointing to lower prices in the near term which falls in line with my gut feeling that a sharp pullback across the board is lurking in January. Once the big money start getting pushed around again we will know who is in control, buyers or sellers.
Let’s continue to focus on these short term charts to take advantage of any low risk setups which come our way.
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
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.
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.
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.
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
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
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
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!
