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.
Commodities move with great volatility but ended up with little changes Thursday. The benchmark contract for crude oil plunged to as low as 72.93 before recovering to 73.64, compare with Wednesday's close at 73.67. While heating oil price also closed almost flat gasoline slid -1.1% to 19.174 as higher than expect jobless claims data implied weaker gasoline consumption.
Initial jobless claims reduced to 470K in the week ended January 23, compared with an expected drop to 452K, from 482K a week ago. The 4 week average increased +10K to 456K while continuing claims dipped -57K to 4602K, the lowest level in a year. We believe the overall trend continues to suggest improvement in the job market, though at a pace slower than previously anticipated.
Headline of durable goods orders disappointed the market by recording only +0.3% mom in December after dropping -0.4% a month ago. However, the reading with transportations excluded showed a +0.9% increase on monthly basis. November's reading was also revised up slightly to +2.1%.
Strength in USD and JPY indicated investors gave up higher-yield investment and sought safe assets yesterday. This was probably a major reason for the softness in commodity prices. The euro slumped against the dollar and the yen as investors doubted if Greece can reduce its huge deficit without the help from outside. The 16 nationed single currency fell to a 6 month low against USD on concerns that the Greek problem will spread to other high deficit economies in Europe.....Read the entire article.
Crude oil closed slightly higher due to short covering on Thursday but remains below the 87% retracement level of the December-January rally crossing at 73.95. The high range close sets the stage for a steady to higher opening on Friday.
Stochastics and the RSI are oversold but remain neutral to bearish signal that sideways to lower prices are possible near term. If March extends today's decline, December's low crossing at 72.45 is the next downside target. Closes above the 20 day moving average crossing at 79.11 are needed to confirm that a short term low has been posted.
Crude oil pivot point for Thursday evening is 73.77
First resistance is the 10 day moving average crossing at 76.33 Second resistance is the 20 day moving average crossing at 79.11
First support is Wednesday's low crossing at 72.65 Second support is December's low crossing at 72.45
Natural gas closed lower on Thursday and tested the 62% retracement level of the December-January rally crossing at 5.114. The mid range close sets the stage for a steady opening on Friday. Stochastics and the RSI have turned bearish signaling that sideways to lower prices are possible near term.
If March extends this week's decline, the 75% retracement level of the December-January rally crossing at 4.919 is the next downside target. Closes above the 20 day moving average crossing at 5.589 are needed to confirm that a low has been posted.
Thursday evenings natural gas pivot point is 5.166
First resistance is broken trading range support crossing at 5.327 Second resistance is the 10 day moving average crossing at 5.504
First support is today's low crossing at 5.060 Second support is the 75% retracement level of the December-January rally crossing at 4.919
The March Dollar closed higher on Thursday as it extends this month's rally. The high range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI remain neutral to bullish signaling that sideways prices are possible near term.
If March extends this month's rally, the 38% retracement level of the 2009-2010 decline crossing at 79.71 is the next upside target. Closes below the 20 day moving average crossing at 77.91 would confirm that a short term top has been posted.
First resistance is today's high crossing at 79.27 Second resistance is the 38% retracement level of the 2009-2010 decline crossing at 79.71
First support is the 10 day moving average crossing at 78.27 Second support is the 20 day moving average crossing at 77.91
Oil may rise to $79.50 a barrel after holding above its 200 day moving average, according to a technical analysis by Lind-Waldock & Co. in Chicago.
Prices will probably “bounce” next week after March oil futures dropped for 10 of the past 12 sessions without sliding below support at the 200 day level, said Richard Ilczyszyn, a senior market strategist with Lind-Waldock, a division of MF Global Ltd. Oil dropped $1.04, or 1.4 percent, to $73.67 yesterday, the lowest settlement since Dec. 21.
“The 200 day moving average held, which is a sign that prices are headed back up,” Ilczyszyn said in a telephone interview.
The contract will next hit resistance at the 50 day and 21 day moving averages, which were $78.33 and $79.41, respectively, yesterday, Ilczyszyn said.
“If the market closes below $72, there is going to be a big flood,” Ilczyszyn said. “There would be repercussions across the board and we would see big drops in both gasoline and heating oil.”
A settlement below $72, which last occurred on Oct. 7 on the New York Mercantile Exchange, would be a signal for the contract to test $67.99, the price on Sept. 25, he said.
The stock indexes have been trading very choppy making it difficult for swing/trend traders. It’s during times like this when seasoned traders rise above the herd of average traders.
If you only trade one strategy like swing trading or trend trading then you are likely finding it difficult to make money right now. On the other hand, day traders are having a blast right now as they take advantage of the powerful intraday rallies and sell offs.
I personally like swing trading but during times like this, when I know it will not work, I have to switch my strategy to day trading and focus on the 60 minute and 5 minute charts.
SP500 Index Fund – Intraday Setup I posted this chart earlier this week and I want to be sure everyone takes something away from this chart as I believe it shows a perfect low risk setup for shorting the market, or you could buy a reverse fund which goes up as the market moves down.
At first glance this chart is noisy, but if you simply focus on the all the different color analysis separately you will notice how simple trading can be and what you should be looking for.
Red Analysis: 1. Overall market trend is down so we are looking for a short trade, signs of weakness. 2. First we see a light volume test of the previous high set earlier in the day. The low volume indicates there are not many participants in the move up and that is a weak sign. 3. Between 14:30- 15:30 we notice the price start to drift higher on very light volume. Also, the price moved up into a resistance level. This to me is a perfect setup. 4. You would sell short or buy a reverse index fund at this point hoping for the market to start selling. You could also wait until it started to drop before taking a position but when a chart looks this good I try to get in at the highest price possible.
Blue Analysis: 1. The price starts to drop forming several small bear flags going into 14:30 before bouncing. Also note the volume began to rise as more selling was happening. This tells us that trading activity is predominately selling and that we should also focus on shorting when the time is right. 2. Again, the price starts to drop forming several small bear flags going from 15:00 – 15:45 before bouncing. Also note the volume began to rise as more sellers took part in this short term trend.
Black Analysis: 1. This shows more or less the resistance level, area to short the index and the nice trend down.
Gold GLD ETF Trading Gold has been under selling pressure since early December. That powerful drop and the chart pattern it has formed will generally resolves itself after an ABC retrace pattern. I have drawn this on the chart which is what I think will happen in the near term. This daily chart of GLD ETF has a small 4 day bear flag and bearish reversal candle which is pointing to lower prices in the near term.
Silver SLV ETF Trading Silver has a funky looking chart. It has formed a large megaphone pattern and possible head & shoulders pattern. Both are bearish and if we use the Head & Shoulders to calculate where silver could end up trading if it continues to break down, then $14.00 would be a level to look for a bounce.
Natural Gas UNG Fund The natural gas fund UNG has been in a down trend for over a year and the recent drop looks to be the start of another sell off. This could possibly form a reverse head & shoulders pattern with this drop moving UNG down to the $8.75 – $9.00 area. We will have to wait and watch things unfold for now.
Crude Oil USO Fund USO looks to be trading at support. I am inclined to patiently wait another session before possibly taking a position.
Mid-Week Trading Conclusion: In short, I feel the overall market could bounce including stocks and possibly commodities, but the selling is not over yet in my opinion. The drop we have seen in the past week is the half way mark. So this bounce would be the starting of an ABC retrace for stock indexes. During choppy times I like to be sitting in cash and or day trading for short term profits.
Precious metals do look oversold and ready for a small bounce or sideways move; I do think they will head lower. Too many traders are still holding on to their gold positions and until a large number of them get scared out of their positions, we will not see gold rocket higher.
Natural gas looks like it’s about to head much lower this week while oil looks ready for a solid bounce off support.
We continue to wait for new low risk setups as different investment scenarios unfold.
Crude oil extended fall from 83.95 to as low as 72.65 before recovering. Downside momentum is a bit unconvincing with 4 hours MACD staying above signal line. Nevertheless, further decline is still in favor as long as 75.42 minor resistance holds. Next target will be a retest of 68.59 support. On the upside, above 75.42 will indicate that a short term bottom is possibly formed and should bring strong recovery then.
In the bigger picture, upside momentum is clearly diminishing as seen in bearish divergence condition in daily MACD. However, there is no confirmation that medium term rise has topped out yet as long as 68.59 support holds. Such medium term rise could still continue and above 83.95 will target 50% retracement of 147.27 to 33.2 at 90.24, which is close to 90 psychological level. Nevertheless, even in such case, we'll continue to look for reversal signal and expect crude oil to top out finally as it approaches 90 level. On the downside, 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 higher overnight due to short covering and is trading above the 87% retracement level of the December-January rally crossing at 73.95. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term.
If March extends this month's decline, December's low crossing at 72.45 is the next downside target. Closes above the 10 day moving average crossing at 76.36 are needed to confirm that a short term low has been posted.
Thursdays pivot point for crude oil is 73.80
First resistance is the 10 day moving average crossing at 76.36 Second resistance is the 20 day moving average crossing at 79.13
First support is Wednesday's low crossing at 72.65 Second support is December's low crossing at 72.45
Natural gas was lower overnight as it extends this week's decline. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term. If March extends this week's decline, the 75% retracement level of the December-January rally crossing at 4.919 is the next downside target.
Closes above the 20 day moving average crossing at 5.591 would confirm that a short-term low has been posted.
Natural gas pivot point for Thursday is 5.282
First resistance is broken trading range support crossing at 5.327 Second resistance is the 10 day moving average crossing at 5.507
First support is the overnight low crossing at 5.130 Second support is the 75% retracement level of the December-January rally crossing at 4.919
The U.S. Dollar was slightly higher overnight as it extends this week's rally. Stochastics and the RSI are diverging but remain neutral to bullish signaling that sideways to higher prices are possible near term.
If March extends this month's rally, the 38% retracement level of the 2009 decline crossing at 79.71 is the next upside target. Closes below the 20 day moving average crossing at 77.90 would confirm that a short term top has been posted.
First resistance is the overnight high crossing at 79.26 Second resistance is the 38% retracement level of the 2009 decline crossing at 79.71
First support is the 10 day moving average crossing at 78.26 Second support is the 20 day moving average crossing at 77.90
Crude oil closed lower on Wednesday and below the 87% retracement level of the December-January rally crossing at 73.95. The mid range close sets the stage for a steady opening on Thursday. Stochastics and the RSI are oversold but remain neutral to bearish signal that sideways to lower prices are possible near term.
If March extends today's decline, December's low crossing at 72.45 is the next downside target. Closes above the 20 day moving average crossing at 79.40 are needed to confirm that a short term low has been posted.
Crude oil pivot point for Wednesday evening is 73.83
First resistance is the 10 day moving average crossing at 76.94 Second resistance is the 20 day moving average crossing at 79.40
First support is today's low crossing at 72.65 Second support is December's low crossing at 72.45
Natural gas closed lower on Wednesday and below trading range support crossing at 5.327. The low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are turning bearish signaling that sideways to lower prices are possible near term.
If March extends today's decline, the 62% retracement level of the December-January rally crossing at 5.114 is the next downside target. Closes above the 20 day moving average crossing at 5.622 are needed to confirm that a low has been posted.
Natural gas pivot point for Wednesday evening is 5.280
First resistance is broken trading range support crossing at 5.327 Second resistance is the 10 day moving average crossing at 5.559
First support is today's low crossing at 5.182 Second support is the 62% retracement level of the December-January rally crossing at 5.114
The U.S. Dollar closed higher on Wednesday as it extends this month's rally. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI remain neutral to bullish signaling that sideways prices are possible near term.
If March extends this month's rally, the 38% retracement level of the 2009-2010 decline crossing at 79.71 is the next upside target. Closes below the 20 day moving average crossing at 77.87 would confirm that a short term top has been posted.
First resistance is today's high crossing at 79.01 Second resistance is the 38% retracement level of the 2009-2010 decline crossing at 79.71
First support is the 10 day moving average crossing at 78.05 Second support is the 20 day moving average crossing at 77.87
Crude oil and gasoline fell to five week lows after a U.S. government report showed inventories of the motor fuel rose to a 22 month high. Oil dropped as much as 2.8 percent after the Energy Department said that gasoline supplies climbed 1.99 million barrels to 229.4 million last week, the highest level since March 2008. Oil stockpiles tumbled amid expectations that they would increase.
“The crude number was certainly supportive for prices, but the product numbers were negative,” said Tom Bentz, senior energy analyst at BNP Paribas Commodity Futures Inc. in New York. “We headed for some new lows and the selling dried up.” Crude oil for March delivery fell $1.45, or 1.9 percent, to $73.26 a barrel at 1:38 p.m. on the New York Mercantile Exchange. Oil touched $72.65, the lowest level since Dec. 21.
Oil supplies dropped 3.89 million barrels, or 1.2 percent, to 326.7 million, the department said. They were forecast to rise 1.5 million barrels in the Bloomberg survey, according to the median estimate of 19 analysts in a Bloomberg News survey. Gasoline stockpiles were estimated to increase 900,000 barrels.
“The only bullish number in today’s report was crude oil, and that was apparently due to the closure of the Houston Ship Channel,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. The Houston Ship Channel, which serves the largest U.S. petroleum port, reopened Jan. 21 after shutting two days earlier because of fog.....Read the entire article.
Crude oil was slightly higher overnight as it consolidates above the 87% retracement level of the December-January rally crossing at 73.95. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term.
If March extends this month's decline, December's low crossing at 72.45 is the next downside target. Closes above the 10 day moving average crossing at 77.07 are needed to confirm that a short term low has been posted.
Wednesday's pivot point for crude oil is 74.64
First resistance is the 10 day moving average crossing at 77.07 Second resistance is the 20 day moving average crossing at 79.47
First support is Tuesday's low crossing at 73.82 Second support is December's low crossing at 72.45
With 4 hours MACD crossed above signal line, some more sideway trading could be seen in crude oil and another recovery might be seen to 4 hours 55 EMA (now at 76.52). Nevertheless, fall fro 83.95 is still in favor to continue as long as 79.16 resistance holds. Sustained break of 61.8% retracement of 68.59 to 83.95 at 74.46 will target a retest on 68.59 support. However, note that break of 79.16 will indicate that fall from 83.95 has completed and will flip intraday bias back to the upside for retesting this resistance.
In the bigger picture, upside momentum is clearly diminishing as seen in bearish divergence condition in daily MACD. However, there is no confirmation that medium term rise has topped out yet as long as 68.59 support holds. Such medium term rise could still continue and above 83.95 will target 50% retracement of 147.27 to 33.2 at 90.24, which is close to 90 psychological level. Nevertheless, even in such case, we'll continue to look for reversal signal and expect crude oil to top out finally as it approaches 90 level. On the downside, 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.
