Crude Trades Lower on Stronger Dollar, Can The Bulls Maintain Their Advantage?

Crude oil was lower due to profit taking overnight as it consolidates some of the rally off this month's low. Stochastics and the RSI are overbought but remain bullish signaling that sideways to higher prices are possible near term.

If March extends this month's rally, the 75% retracement level of the January-February decline crossing at 80.72 is the next upside target. Closes below the 20 day moving average crossing at 74.93 would confirm that a short term top has been posted.

Friday's pivot point, our line in the sand is 78.22

First resistance is Thursday's high crossing at 79.29
Second resistance is the 75% retracement level of the January-February decline crossing at 80.72

First support is the 10 day moving average crossing at 75.21
Second support is the 20-day moving average crossing at 74.93

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Natural gas was lower overnight as it extends this month's choppy sideways trading pattern. Stochastics and the RSI are neutral signaling that sideways trading is possible near term.

Closes above the reaction high crossing at 5.680 or below 5.060 are needed to confirm a breakout of this month's trading range and point the direction of the next trending move.

Natural gas pivot point for Friday is 5.242

First resistance is Tuesday's high crossing at 5.560.
Second resistance is the reaction high crossing at 5.680.

First support is the overnight low crossing at 5.120.
Second support is the reaction low crossing at 5.060.

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The U.S. Dollar was higher overnight and tested the 50% retracement level of the 2009 decline crossing at 81.32. Stochastics and the RSI are diverging but are turning bullish signaling that sideways to higher prices are possible near term.

If March extends this winter's rally, the 62% retracement level of the 2009 decline crossing at 82.92 is the next upside target. Closes below the 20 day moving average crossing at 79.85 are needed to confirm that a short term top has been posted.

First resistance is the overnight high crossing at 81.43
Second resistance is the 62% retracement level of the 2009 decline crossing at 82.92

First support is the 10-day moving average crossing at 80.35
Second support is the 20 day moving average crossing at 79.85

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Crude Oil Technical Outlook For Friday Morning

Crude oil's rebound resumed after brief retreat and reached as high as 79.29 so far. The break of 78.04 resistance argues that fall from 83.95 has completed with three waves down to 69.50 already. Further rise is now in favor to retest this high first. On the downside, below 76.32 minor support will turn intraday bias neutral. Further break of 72.66 support will in turn indicate that rebound from 69.50 is finished and revive the case that fall from 83.95 is still in progress for another low below 69.50.

In the bigger picture, crude oil was supported above 68.59 and the stronger than expected rebound from 69.50 mixed up the outlook. Fall from 83.95 could have completed already and whole medium term rise from 33.2 might be set to resume. Nevertheless, even in case of another rise, we'd still expect strong resistance as crude oil approaches 50% retracement of 147.27 to 33.2 at 90.24 to conclude the medium term rebound from 33.2. Hence, focus will remain on reversal signal.

On the downside, break of 69.50 will revive the case that medium term rise from 33.2, which is treated as a correction to fall from 147.27, should have completed at 83.95 already, on bearish divergence condition in daily MACD. Further break of 68.50 will confirm and target next key cluster level at 58.32 (50% retracement of 33.2 to 83.95 at 58.58).....Nymex Crude Oil Continuous Contract 4 Hours Chart.

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Crude Oil Declines for First Day in Four as Dollar, Stockpiles Increase

Oil declined for the first time in four days as the dollar rose against the euro and a government report showed a bigger than forecast increase in crude oil supplies in the U.S., the world’s biggest energy consumer. Oil pared yesterday’s 2.2 percent gain after crude stockpiles rose 3.09 million barrels to 334.5 million last week, according to a report from the Department of Energy. An increase of 1.73 million barrels was forecast, according to the median estimates in a Bloomberg News survey. A stronger dollar damps investor demand for commodities.

Crude oil for March delivery dropped as much as 91 cents, or 1.2 percent, to $78.15 a barrel in electronic trading on the New York Mercantile Exchange. It was at $78.20 at 10:32 a.m. in Sydney. Yesterday, the contract rose $1.73 to $79.06, the highest settlement price since Jan. 14. Futures have gained 5.5 percent this week. The dollar rose after the Federal Reserve raised the discount rate charged to banks for direct loans for the first time in more than three years. The U.S. currency traded at $1.3493 per euro at 10:36 a.m. in Sydney, from $1.3527 yesterday.

Inventories of distillate fuel, a category that includes heating oil and diesel, fell 2.94 million barrels to 153.3 million, according to the department. Gasoline stockpiles climbed 1.62 million barrels to 232.1 million. An increase of 1.5 million barrels was forecast. Brent crude for April delivery rose $1.51, or 2 percent, to end the session at $77.78 a barrel on the London based ICE Futures Europe exchange yesterday.


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Phil Flynn: Have It Your Way

Have it your way, have it your way. The bulls have it their way yet beware because today is a brand new day. With bond yields rising, the Fed Minutes, talking about an exit strategy and the Euro giving back most of its one day gains, the big question yesterday was why oil did not get crushed. If all of oil's strength was because of the Euro and the dollar then shouldn’t oil have fallen a lot harder?

Well obviously it is not all about the dollar and the Euro and the problems with Europe. There is still supply and demand to consider and there is also geo politics but ultimately we know the market's fate still resides in the hands of the world’s global central banks. Yet yesterday oil prices followed through on Tuesday’s technical breakout. The breakout was inspired by a sharp rebound in the Euro and a suddenly sinking dollar.

Yet as those markets reversed yesterday oil kept hanging in there. Oh sure, oil garnered some support from some strong corporate earnings and better than expected economic data but more than anything it seemed to go higher because there was not a lot of resistance to stop it. Oil is in a bit of clear air on the charts so the bulls do not need as much news to keep us higher and they had their way with it yet with the Energy Information Report looming and continuing dollar strength overnight, oil may have a harder time have it its own way.....Read the entire article.

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15 Countries That Will Get Creamed In An Oil Spike

The threat of a spike in oil prices continues to linger over the economy.
Oil shot up this week and the slightest signs of optimism, suggesting that prices are highly leveraged to growth and that investors see little slack in the system.

But not all countries will be hit the same if there is a mega spike.

Countries that import an exceptional amount of oil on a per-capita basis will be hit the hardest.

Here are those countries that will get slammed > Slide Show




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Sign up for the "Perfect Portfolio" Webinar this Friday

On Friday, Adam Hewison of the MarketClub is going to go into detail about this hypothetical portfolio and it's conservative strategy. This set up is "perfect"
for those of us who don't want to look at our brokerage accounts every day.

The "Perfect Portfolio" covers 4 ETF's and Adam will look at each and also cover the strategy used to trade them.

Simply click here in order to register for this free web seminar which is available to all of our readers.

See you Friday!
Ray C. Parrish
President/CEO The Crude Oil Trader


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Crude Oil Trades Lower Overnight, Bulls Maintain The Advantage

Crude oil was lower due to profit taking overnight as it consolidates some of the rally off this month's low. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term.

If March extends this month's rally, the reaction high crossing at 78.04 is the next upside target. Closes below the 10 day moving average crossing at 74.49 would confirm that a short term top has been posted.

Thursday's pivot point, our line in the sand is 77.23

First resistance is Wednesday's high crossing at 77.82
Second resistance is the reaction high crossing at 78.04

First support is the 20 day moving average crossing at 74.71
Second support is the 10 day moving average crossing at 74.49

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Natural gas was lower overnight as it extends this month's choppy sideways trading pattern. Stochastics and the RSI are neutral signaling that sideways trading is possible near term.

Closes above the reaction high crossing at 5.680 or below 5.060 are needed to confirm a breakout of this month's trading range and point the direction of the next trending move.

Natural gas pivot point for Thursday is 5.358

First resistance is last Friday's high crossing at 5.556
Second resistance is the reaction high crossing at 5.680

First support is last Friday's low crossing at 5.204
Second support is the reaction low crossing at 5.060

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The U.S. Dollar was higher overnight as it consolidates above the 38% retracement level of the 2009 decline crossing at 79.71. Stochastics and the RSI are diverging but are turning bearish hinting that a short term top might be in or is near.

Closes below the 20 day moving average crossing at 79.71 are needed to confirm that a short term top has been posted. If March extends this winter's rally, the 50% retracement level of the 2009 decline crossing at 81.32 is the next upside target.

First resistance is last Friday's high crossing at 80.83
Second resistance is the 50% retracement level of the 2009 decline crossing at 81.32

First support is the 10 day moving average crossing at 80.30
Second support is the 20 day moving average crossing at 79.71

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Crude Oil Daily Technical Outlook For Thursday

With 4 hours MACD crossed below signal line, an intraday top is in place at 77.68 and bias is turned neutral. With 78.04 resistance intact, we're still favoring the case that whole decline from 83.95 is not finished. Below 72.60 minor support will suggest that recovery from 69.50 has completed and will flip intraday bias back tot he downside for 69.50 and then 68.59 support next. However, note that decisive break of 78.04 resistance will dampen this view and argue that fall from 83.95 has completed and will bring stronger rally to retest this high.

In the bigger picture, prior break of medium term trend line support added some credence to the case of reversal. Medium term rise from 33.2, which is treated as a correction to fall from 147.27, should have completed at 83.95 already, on bearish divergence condition in daily MACD. Current fall from 83.95 should extend through 68.59 support towards next key cluster level at 58.32 (50% retracement of 33.2 to 83.95 at 58.58). Decisive break there will strongly suggest that whole decline from 147.27 is resuming for a new low below 33.2. On the upside, break of 78.04 resistance is needed to confirm that fall from 83.95 has completed. Otherwise, outlook will remain bearish.....Nymex Crude Oil Continuous Contract 4 Hours Chart.

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Where is Crude Oil Headed on Thursday?

CNBC's Sharon Epperson discusses the day's activity in the commodities markets, and looks ahead to where oil is likely headed tomorrow.




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New Video: Five Reasons Why Gold Will Not....

Gold has made some exciting moves recently, but what can we expect in the future? In today’s video, we point out five reasons that we do not expect gold to make a new high just yet.

If the current cycle persists, there will be some interesting trades to be had in this market and a possible new high before summer.

The video is free to watch and there are no registration requirements. We hope you enjoy this gold update and please leave a comment about how you feel about this video and this market.


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