CNBC's Sharon Epperson discusses the day's activity in the commodities markets, and looks ahead to where oil is likely headed tomorrow.
Tuesday, January 5, 2010
Crude Oil Bull's Continue to Struggle With $82 Dollar Resistance
Crude oil closed higher on Tuesday as it extends the rally off December's low. The high range close sets the stage for a steady to higher opening on Wednesday. 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 82.28 is the next upside target. Closes below the 20 day moving average crossing at 75.85 would confirm that a short term top has been posted.
First resistance is today's high crossing at 81.99
Second resistance is the reaction high crossing 82.28
First support is the 10 day moving average crossing at 78.23
Second support is the 20 day moving average crossing at 75.85
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Natural gas closed lower on Tuesday and the low range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term.
Closes below the 20 day moving average crossing at 5.580 are needed to confirm that a short term top has been posted. If February resumes the rally off December's low, the 87% retracement level of this fall's decline crossing at 6.077 is the next upside target.
First resistance is last 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 the 20 day moving average crossing at 5.580
Second support is last Thursday's low crossing at 5.505
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The U.S. Dollar closed higher due to a late day short covering rally on Tuesday but remains below the 10 day moving average crossing at 78.19. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI remain neutral to bearish hinting that a short term top might be in or is near.
Closes below the 20 day moving average crossing at 77.60 are needed confirm that a short term top has been posted. If March renews the rally off November's low, 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 the 20 day moving average crossing at 77.60
Second support is today's low crossing at 77.39
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Gold Rally Triggers Buy Stops as Crude Oil Leads Commodities Surge
The price of gold eased back from its strongest Dollar and Euro prices in nearly three weeks in London on Tuesday, holding above a one month high of £700 per ounce for UK investors as European shares and US stock futures held flat. The CRB commodities index rose almost 2% as sugar neared a three decade high and US crude oil contracts touched $82 per barrel, more than twice the price of 12 months ago. Consumer price inflation in the 16 nation Eurozone leapt in Dec. to a 10 month high, the Eurostat agency said Tuesday morning, unwinding the last of 2009's second half deflation.
"Buy stops were triggered" as gold rose late in Asia says a Hong Kong dealer today, with professional traders re entering the gold market after last month's 12% drop. "The Dollar remains the key driver," says an analyst's note. "All commodities have benefited from an increase in risk appetite." But "Buying interest in the physical market seems to have faded on gold's [1.8%] rally yesterday," says Standard Bank's daily commodity briefing. "We need to see much more Dollar weakness on a trade weighted basis to sustain a rally in gold." (Is gold's 10 year run all about the Dollar? Read Dollar Nonsense here...)
Monday saw the 1128 tonne SPDR Gold trust shed five tonnes of the gold backing its exchange traded shares, the first such drop in almost a month but only equal to the annual 0.4% expense ratio it charges stock holders. Long dated government bonds fell Tuesday morning, pushing 30 year US Treasury yields up to 4.75% ahead of Pending US Home Sales data and Vehicle Sales figures for Dec.....Read the entire article.
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Crude Oil Fluctuates as Forecasts Show Warming U.S. Weather
Crude oil fluctuated, after rising for eight days in New York, on forecasts that temperatures in the northern U.S. will climb next week. The weather in the U.S. Northeast, the area responsible for about four-fifths of the country’s heating oil use, will return to normal between Jan. 12 and Jan. 18, according to the Climate Prediction Center of the National Weather Service. Oil surged yesterday on the cold, manufacturing growth in China and the U.S., rising equities and a decline in the dollar. “It looks like the worst of the cold will hit us between Jan. 7 and Jan. 10 before temperatures moderate,” said Tim Evans, an energy analyst at Citigroup Global Markets Inc. in New York. “Traders are actually paying more attention to the S&P and the dollar, neither of which are doing anything. We have to look at these markets for direction.”
Crude oil for February delivery fell 4 cents to $81.47 a barrel at 10:49 a.m. on the New York Mercantile Exchange. Futures reached $81.99 today, the highest intraday price since Oct. 21, when they touched $82. The Standard & Poor’s 500 Index was little changed at 1,133.23. The dollar traded at $1.4423 per euro, down 0.1 percent from yesterday. A weak U.S. currency bolsters the appeal of commodities to investors looking for alternative investments. “It’s a foregone conclusion that we will soon break through last year’s high of $82,” said Peter Beutel, president of trading adviser Cameron Hanover Inc. in New Canaan, Connecticut. “We’re getting some of the coldest weather in years and that’s bound to increase demand”.....Read the entire article.
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Phil Flynn: Weather or not?
I guess we can talk about the cold but I think it's already talking for itself. Heating degree days are piling up in the energy complex but to get the full picture on this New Year surge of bullishness, you really have to look beyond your frost-bit nose. It is not so much the transitory issue that we are freezing that inspired the big move but a growing sense that interest rates will be frozen for a longer time than the market anticipated. You see, weather was a major factor that drove oil and heating fuels and orange juice yet other markets like gold and silver and copper soared as well. Ok, I know some people think gold can keep you warm at night but this rally was about more than just weather. This was about the changing attitudes of when the Fed will raise rates and the resumption of the dollar carry trade that helped drive last year Fed inspired commodity rally.
The dollar got whacked in the aftermath of weekend comments by Fed Chairman Ben Bernanke on his talk of an aggressive exit strategy. The markets seemed to not take his comment seriously or at least they had the perception that rates may stay lower longer than they thought. This perception grew stronger when Federal Reserve Board Governor Elizabeth Duke said she sees inflation remaining subdued. Fed Fund futures rallied, lowering expectations of an interest rate hike in June to a mere 58% chance, down from 78% chance at the close last week. This significant change and could have a significant impact on commodity prices.....Read the entire article.
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Crude Oil and Natural Gas Technical Outlook For Tuesday Morning
Nymex Crude Oil (CL)
Crude oil's rally is still in progress today and reaches as high as 81.99 so far, just shy of 82.0 high. At this point, further rise is still expected as long as 79.12 support holds. Firm break of 82.0 will confirm that whole medium term rise from 33.2 has resumed and should target next key resistance level at 90. On the downside, break of 79.12 will argue that a short term top is formed, possibly with bearish divergence condition in 4 hours MACD. In such case, intraday bias will be flipped back to the downside for pull back to 4 hours 55 EMA (now at 78.28) and below.
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.....Nymex Crude Oil Continuous Contract 4 Hours Chart.
Nymex Natural Gas (NG)
Natural gas continues to consolidate below 6.035 today and intraday bias remains neutral for the moment. Some more sideway trading could be seen but after all, we'd expect 5.29 resistance turned supprot, which is close to 38.2% retracement of 4.157 to 6.035 at 5.319, to hold and bring rally resumption. Break of 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.
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Crude Oil Reaction Crossing at 82.28 is the Next Upside Target
Crude oil was slightly 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 82.28 is the next upside target. Closes below the 20 day moving average crossing at 75.84 are needed to confirm that a short term top has been posted.
Tuesday's pivot point, our line in the sand is 80.98
First resistance is the overnight high crossing at 81.99
Second resistance is the reaction high crossing at 82.28
First support is the 10 day moving average crossing at 78.21
Second support is the 20 day moving average crossing at 75.84
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Natural gas was lower overnight as it consolidates some of Monday's rally. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term. Closes below the 20 day moving average crossing at 5.587 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.
Natural gas pivot point for Tuesday is 5.828
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 5.587
Second support is last Thursday's low crossing at 5.505
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The U.S. Dollar was slightly lower overnight as it extends Monday's decline below initial support marked by the 10 day moving average crossing at 78.18. Stochastics and the RSI are bearish hinting that a short term top might be in or is near.
Closes below the 20 day moving average crossing at 77.60 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 10 day moving average crossing at 78.18
Second resistance is the reaction high crossing at 78.77
First support is the 20 day moving average crossing at 77.60
Second support is the overnight low crossing at 77.39
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Monday, January 4, 2010
Where is Crude Oil and Commodities Headed on Tuesday?
CNBC's Sharon Epperson discusses the day's activity in the commodities markets, and looks ahead to where oil is likely headed tomorrow.
High Range Crude Oil Close Set's up Possible Higher Open on Tuesday
Crude oil closed sharply higher on Monday as it extends the rally off December's low. The high range close sets the stage for a steady to higher opening on Tuesday. 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 82.28 is the next upside target. Closes below the 20 day moving average crossing at 75.63 would confirm that a short term top has been posted.
First resistance is today's high crossing at 81.68
Second resistance is the reaction high crossing 82.28
First support is the 10 day moving average crossing at 77.50
Second support is the 20 day moving average crossing at 75.63
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Natural gas closed higher on Monday ending a three day correction off last week's high. The high range close sets the stage for a steady to higher opening on Tuesday. Despite today's rally, 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 5.530 are needed to confirm that a short term top has been posted. If February resumes the rally off December's low, the 87% retracement level of this fall's decline crossing at 6.077 is the next upside target.
First resistance is last 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 the 20 day moving average crossing at 5.530
Second support is last Thursday's low crossing at 5.505
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The U.S. Dollar closed sharply lower on Monday and below the 10 day moving average crossing at 78.21 signaling that a short term top has likely been posted. The low range close sets the stage for a steady to lower opening on Tuesday.
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 77.52 are needed confirm that a short term top has been posted. If March renews the rally off November's low, 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 today's low crossing at 77.57
Second support is the 20 day moving average crossing at 77.52
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MF Global: Oil Rally May Falter at $82
Crude oil’s rally to a two month high may sputter around $82 a barrel as the commodity’s relative strength index signals that gains have been excessive, according to technical analysis by MF Global Ltd. Oil advanced for an eighth day in New York today, trading above $81 a barrel for the first time since November, as freezing temperatures around the Northern Hemisphere bolstered the outlook for fuel demand. The surge will probably founder before it reaches last year’s peak of $82 a barrel, MF Global said in a report.
The relative strength index for crude oil indicates that prices may have overshot, according to the brokerage. An asset’s RSI is a ratio based on daily closing prices that measures how far prices have advanced or dropped during a specified period. An RSI reading of 70 or above typically suggests an asset has risen too far, too fast. The last 14 day reading for crude was 67.8, the highest since October. “Technically, most complexes are approaching the upper bands of the trading range,” said Edward Meir, an MF Global analyst in Connecticut. “Crude is approaching overbought territory. We find it unlikely that prices will take out $80.50- $82 resistance”.....Read the entire article.
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