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.
Crude oil's correction from 83.95 resumed and dropped to as low as 75.82 so far. While another fall could still be seen, downside is expected to be contained by 61.8% retracement of 68.59 to 83.95 at 74.46 and bring strong rebound. Above 78.25 minor resistance will flip intraday bias back to the upside for 83.95 resistance first. However, note that sustained trading below 74.46 fibo support will argue that rise from 68.59 has completed and will turn focus back to this key support level.
In the bigger picture, whole medium term rise from 33.2 is still in progress but after all, there is no change in the view that it's merely a correction to fall from 147.27. Therefore, we'd continue to look for reversal signal in case of another rise and as crude oil approaches 50% retracement of 147.27 to 33.2 at 90.24, which is close to 90 psychological level. On the downside, however, considering continuous bearish divergence condition in daily MACD, a break of 68.59 support will confirm that a medium term top is in place and will turn outlook bearish for a retest on 33.2 low as correction from 147.27 resumes.....Nymex Crude Oil Continuous Contract 4 Hours Chart.
Crude oil was steady to slightly lower overnight as it extends this week's decline. Stochastics and the RSI are oversold but remain bearish signaling that sideways to lower prices are possible near term.
If March extends this week's decline, the 75% retracement level of the aforementioned rally crossing at 75.46 is the next downside target. Closes above the 20 day moving average crossing at 80.05 are needed to confirm that a short term low has been posted.
Friday's pivot point, our line in the sand is 76.70
First resistance is the 10 day moving average crossing at 79.46 Second resistance is the 20 day moving average crossing at 80.05
First support is the overnight low crossing at 75.62 Second support is the 75% retracement level at 75.46
Stephanie Link, director of research for Action Alerts Plus Portfolio, reveals why they still love Chevron and are buying the stock despite its recent 40% move.
Crude oil closed lower on Thursday as it extends last week's decline. The low range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI remain bearish signal that sideways to lower prices are possible near term.
If March extends last week's decline, the 75% retracement level of the December-January rally crossing at 75.46 is the next downside target. Closes above the 10 day moving average crossing at 80.21 would confirm that a short term low has been posted.
First resistance is the 20 day moving average crossing at 80.02 Second resistance is the 10 day moving average crossing at 80.21
First support is today's low crossing at 75.66 Second support is the 75% retracement level of the December-January rally crossing at 75.46
Natural gas closed higher due to short covering on Thursday but the mid range close sets the stage for a steady opening on Friday. Stochastics and the RSI are bearish hinting that additional weakness is possible near term.
If February renews last week's decline, the 50% retracement level of the December-January rally crossing at 5.314 is the next downside target. Closes above last Thursday's high crossing at 5.804 would temper the near term bearish outlook in the market.
First resistance is last Thursday's high crossing at 5.804 Second resistance is the reaction high crossing at 6.108
First support is last Tuesday's low crossing at 5.354 Second support is the 50% retracement level of the December-January rally crossing at 5.314
The U.S. Dollar closed higher on Thursday but well off session highs due to profit taking, which erased most of its early gains. The low range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term.
If March extends this week's rally, the 38% retracement level of the 2009-2001 decline crossing at 79.71 is the next upside target. Closes below the 10 day moving average crossing at 77.52 would confirm that a short term top has been posted.
First resistance is today's high crossing at 79.00 Second resistance is the 38% retracement level of the 2009-2001 decline crossing at 79.71
First support is the 20 day moving average crossing at 77.79 Second support is Tuesday's low crossing at 77.52
Crude oil fell to a four week low after a U.S. Energy Department report showed that refineries slashed operating rates as fuel demand declined. Plants ran at 78.4 percent of capacity last week, the lowest rate since September 2008 when hurricanes struck the Gulf of Mexico. Gasoline supplies surged to the highest level since March 2008. Fuel use in the past four weeks fell 1.8 percent from a year earlier. Oil also dropped as the dollar strengthened and stocks declined. “Refineries aren’t running and we still got a big build in gasoline inventories,” said Phil Flynn, vice president of research at PFGBest in Chicago. “This is a signal that demand is very weak in the U.S., and there is no sign that it will increase anytime soon.”
Crude oil for March delivery fell $1.22, or 1.6 percent, to $76.52 a barrel at 11:57 a.m. on the New York Mercantile Exchange. Futures touched $76.02, the lowest level since Dec. 23. Oil traded at $77.41 before the release of the report at 11 a.m. in Washington. The greenback strengthened after a report said the European Union was preparing a loan for Greece, which Finance Minister George Papaconstantinou denied. The U.S. currency traded at $1.4095 per euro, from $1.4106 yesterday. The greenback touched $1.4029, the highest level since July 30. The Standard & Poor’s 500 Index slipped 1.5 percent to 1,121.37 and the Dow Jones Industrial Average declined 1.8 percent to 10,416.79.....Read the entire article.
Crude oil was steady to slightly lower overnight but remains above the 50% retracement level of the December-January rally crossing at 77.41. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near-term.
If February extends this month's decline, the 62% retracement level of the aforementioned rally crossing at 75.85 is the next downside target. Closes above the 10 day moving average crossing at 80.00 are needed to confirm that a short term low has been posted.
Thursday's pivot point for crude oil is 78.08
First resistance is the 20 day moving average crossing at 79.59 Second resistance is the 10 day moving average crossing at 80.00
First support is Tuesday's low crossing at 77.07 Second support is the 62% retracement level of the December-January rally crossing at 75.85
Intraday bias in crude oil remains neutral as it's still staying is tight range above 76.76. Another fall is expected as long as 79.62 minor resistance holds and below 76.76 will target 83.95 towards 61.8% retracement of 68.59 to 83.95 at 74.46. But downside should be contained there and bring rally resumption. On the upside, above 79.26 minor resistance will flip intraday bias back to the upside for retesting 83.95 resistance first. Further break of 83.95 high will target upper trend line resistance at 87/88 level again. However, note that sustained trading below 74.46 fibo support will argue that rise from 68.59 has completed and will turn focus back to this key support level.
In the bigger picture, whole medium term rise from 33.2 is still in progress but after all, there is no change in the view that it's merely a correction to fall from 147.27. Therefore, we'd continue to look for reversal signal in case of another rise and as crude oil approaches 50% retracement of 147.27 to 33.2 at 90.24, which is close to 90 psychological level. On the downside, however, considering continuous bearish divergence condition in daily MACD, a break of 68.59 support will confirm that a medium term top is in place and will turn outlook bearish for a retest on 33.2 low as correction from 147.27 resumes.....Nymex Crude Oil Continuous Contract 4 Hours Chart.
For the past few weeks I have been expecting the market to correct. By looking at the price action on the weekly and daily charts we can see that there has not been any real pullback since November and that is important to note. Without regular market corrections stocks start to become over bought meaning everyone has/is buying them and no real sellers have jumped off the trend. So when the price in an over bought market starts to slide lower we generally see everyone rush to hit their sell buttons. This is what causes the high volume breakdowns similar to the GLD (Gold) breakdown last December.
Another way of getting a feel for the market to know if it is over bought is to look at market sentiment for bulls vs. bears (buyers vs. sellers). Currently almost everyone is bullish and with this high of a reading we must start protecting our positions by tightening stops and/or get ready to play the coming correction with a short term trading strategy.
We can add another level of analysis to assist our understanding of the market if we look at the 60 minute charts of the SPY & IBM.
The chart below of the SPY (SP500) clearly shows we are in choppy times. With the majority of investors buying up stocks left, right and center because they are bullish on both the economy and individual companies, we have continued to see the index crawl higher. This has been going on for almost 3 months now but the more recent price action in the SPY chart clearly shows there are some BIG sellers unloading positions into this buying pressure. When the big sellers slow their selling we see the price drift back up until selling kicks back in. This is a warning signal for lower prices in the coming days.
The IBM chart shows a perfect example of the ‘Buy on the Rumor – Sell on the News’ saying we all know. The share price of IBM ran up into their earning news as traders know IBM is great for beating estimates. Once the great news came out which actually beat the estimates, the price sold off. This is happening everywhere with stocks.
In short, the market looks top heavy and has also rallied into earning season. These two points really have me on edge for taking a long trade at the moment.
Gold Stocks and the Dollar
The HUI (Gold Stock Index) has been on fire the past 10 months. Both gold and gold stocks have been leading the market higher. But the past month we have seen gold stocks under perform the SP500 and as of today are testing a key support level. Only time will tell if it bounces or breaks, so keep a close eye on your positions.
I use the UUP etf of the US Dollar to show the price action of today’s price move. The US Dollar is now above a key resistance level and has started to move higher. If the Dollar continues higher commodities across the board will have downward pressure. This could trigger a large sell off in the gold and gold stocks which I think are still over bought using a short term time frame.
Gold & Oil Futures Trends
The trend of gold and oil has been down the past few days. Gold broke down in the past 24 hours in overnight trading which triggered a wave of selling when the US market opened.
Gold and oil are currently trading between key support and resistance levels. I am looking for gold to drift back up to the $1130 level where I will look for a short setup as the current price action is not bearish on the intraday charts.
Oil is still bullish so I am not really looking to short it at this time. I will wait for another low risk buy signal.
Commodity Trading Conclusion
I feel the broad market could be ready for a large correction ranging from 5-10%. I am calling it a correction as I want to stay positive thinking. But it could be the start of a major market top. Market tops tend to be a process and take several months to roll over. So let’s focus on protecting our money and wait for a pullback that will allow us to load up with some great positions in the coming weeks.
Patience is how money is made in the market. Waiting for the market to come to you is vital for success. Also having the patience to let winners run by scaling out (selling a portion) of a position when the price reaches a support or resistance level makes it easier to let them run. Each time you sell some of a position you are locking in a profit and lowering your risk for the balance of that trade.
Crude oil closed lower on Wednesday as it extends last week's decline. The low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI remain bearish signal that sideways to lower prices are possible near term.
If February extends last week's decline, the 62% retracement level of the 2008 decline crossing at 75.85 is the next downside target. Closes above the 10 day moving average crossing at 80.55 would confirm that a short term low has been posted.
First resistance is the 20 day moving average crossing at 79.39 Second resistance is the 10 day moving average crossing at 80.55
First support is Tuesday's low crossing at 76.76 Second support is the 62% retracement level of the 2008 decline crossing at 75.85
Natural gas closed lower on Wednesday and the low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are neutral to bearish hinting that additional weakness is possible near term.
If February extends last week's decline, the 50% retracement level of the December-January rally crossing at 5.314 is the next downside target. Closes above last Thursday's high crossing at 5.804 would temper the near term bearish outlook in the market.
First resistance is last Thursday's high crossing at 5.804 Second resistance is the reaction high crossing at 6.108
First support is last Tuesday's low crossing at 5.354 Second support is the 50% retracement level of the December-January rally crossing at 5.314
The U.S. Dollar closed sharply higher on Wednesday and above the 20 day moving average crossing at 77.79 confirming that a low has been posted. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term.
If March extends this week's rally, December's high crossing at 78.77 is the next upside target. Closes below the 10 day moving average crossing at 77.48 would confirm that a short term top has been posted.
First resistance is today's high crossing at 78.64 Second resistance is December's high crossing at 78.77
First support is the 20 day moving average crossing at 77.79 Second support is Tuesday's low crossing at 77.09
Can the oil bulls catch a break as the Senate Super Majority is broken? Well maybe they might have if it weren’t for the fact that China is hitting the brakes.
The election in Massachusetts gave oil bulls a thrill but news today out of China may change that bullish mood. The petroleum market reversed course yesterday as the market correctly predicted that Republican Scott Brown would pull off an upset victory in the Massachusetts special Senate campaign to fill Senator Ted Kennedy’s vacant seat. Or as Senate elect Brown would say “The people’s seat”. The man who will block the Democrats super majority and vote against the universal health care bill sent healthcare stocks soaring helping inspire the Dow on to 115.78 point rally turning oil around on its coattails. Yet today we may see the oil market come back down to earth as reports out of China may once again zap that bullish momentum.
Just when the oil bulls thought they might catch a break, China put the squeeze on. Reuter’s News reported that the Chinese government has told several major Chinese banks to hit the brakes by making them increase their reserve requirement ratio by half a percentage point. Not only that they told these lending institutions to stop lending money for the rest of this month.....Read the entire article.
