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.
Baker Hughes reported that the international rig count for March 2010 was 1,074, up 6 from the 1,068 counted in February 2010, and up 62 from the 1,012 counted in March 2009. The international offshore rig count for March 2010 was 295, down 6 from the 301 counted in February 2010 and up 14 from the 281 counted in March 2009.
The U.S. rig count for March 2010 was 1,419, up 69 from the 1,350 counted in February 2010 and up 314 from the 1,105 counted in March 2009. The Canadian rig count for March 2010 was 386, down 178 from the 564 counted in February 2010 and up 190 from the 196 counted in March 2009.
The worldwide rig count for March 2010 was 2,879, down 103 from the 2,982 counted in February 2010 and up 566 from the 2,313 counted in March 2009.
Crude oil made a temporary top at 87.09 after hitting mentioned 86.92 projection target and pull back from there is still in progress. More decline could be seen towards 4 hours 55 EMA (now at 84.40) and below. But after all, break of 78.56 support is needed to indicate that crude oil has topped. Otherwise, outlook will remain bullish. Sustained trading above 86.92 will target 90 psychological level next.
In the bigger picture, the strong break of 83.95 high confirmed that medium term rally from 33.2 has resumed. Nevertheless, there is no change in the view that it's the second wave of the whole correction that started in 2008 at 147.27. Hence, we'd continue to expect strong resistance near to 50% retracement of 147.27 to 33.2 at 90.24 to bring reversal. On the downside, below 78.56 support will be the first signal of topping and will turn focus back to 69.50 support for confirmation.....Nymex Crude Oil Continuous Contract 4 Hours Chart.
This week has been playing out as expected with prices grinding their way higher and lots of sharp intraday sell offs and rallies which is indicative of a market getting toppy.
Seems like the masses feel as though they are getting left behind which is why we are starting to see the panic buying in the market (new money buying at these lofty overbought prices).
Each time there is a new intraday or daily high on the major indexes there is a renewed bullishness created as breakout traders and novice traders buy into the market hoping for the next surge in price. It is these volume surges of new money entering the market which the big guys (smart money) are selling into. You can see it clear as day light on the intraday charts as new money gets sucked into the market new high and then 2 minutes later larger waves of selling hit the bids. I did explain and show a chart of how this looks to members of the FuturesTradingSignals.com today.
We have some very exciting times ahead and it’s just a matter of letting the market unfold over time as we take advantage of these carefully measured low risk setups.
On to the charts....
GLD ETF Trading – Gold Exchange Trading Fund
You can see how this chart has evolved from pattern to pattern as it bottomed over time.
Today we had a breakout and I expect to see a pullback which is normal when prices gap up and breakout of a pattern. An entry point would be considered on a pullback if the proper criteria are met.
SLV ETF Trading – Exchange Traded Fund
Silver has always been much more volatile than gold which is why the pullback early this year was so strong and why the recent rally has also covered so much ground. As you can see silver has broke out above resistance but is now looking overbought. A pullback in precious metals is expected, or a pause at least.
USO Crude Oil Fund
Oil has made a nice move higher the past week but I feel it will pullback also in the coming days for a breather. There are a couple sizable gaps to fill all the way back down to $40.50.
UNG Natural Gas Fund
This natural gas chart looks very interesting. In the chart I am comparing the 2009 low to today’s price action.
From looking at the chart, natural gas is way oversold and in dire need of a relief rally. As you can see the sharp rallies which occurred just before both the 2009 and the current possible bottom look identical. This type of price action is very common to see.
Let me explain: When an investment is this over sold, meaning it has sold lower for weeks if not months, then there is a large growing number of traders looking to pick a bottom. Once these traders see prices start to move higher they all jump in thinking its “The Bottom”. Some times it is but more times than not it’s just a suckers rally.
General rule is, if everyone can see it, then its most likely not going to happen.. this is also part of the reason the major indexes keep going up. It looks like a great short and a tone of traders are in cash waiting to take advantage of the drop. But the market will keep pushing higher until fear its not going to pullback. That’s when the new money buys back in fueling the GRIND higher.
Anyways, so after all the bottom pickers jump on the train and there are not any more buyers and the price tends to drift lower scaring these traders back out of the position. Eventually a new low is made and everyone is shaken out of the investment. The crazy part is that just as they get out, the price usually turns around and does exactly what they new was going to happen –Go Up.
Most traders have the direction correct, it’s just their timing is off. My general rule is when I see something I wait another bar, sometimes I keep saying that to my self after each new bar until I am confident in the predicted move or price I can get into the position at.
Mid-Week Trading Conclusion:
In short, the bull market continues to grind its way higher. Unfortunately we cannot do much until there is some type of correction because buying way up here after a 2 month rally is outside of my comfort zone.
I foresee a 3-5% correction starting any day now so I am keeping my gunpowder dry.
Oil declined for a second day after a government report yesterday showed a bigger than forecast inventory gain in the U.S., the world’s largest energy consumer. Oil dropped as the Energy Department said crude supplies rose 1.98 million barrels to 356.2 million last week. Stockpiles were expected to climb by 1.35 million barrels, according to a Bloomberg News analyst survey. Machinery orders in Japan, the world’s third largest oil user, unexpectedly fell in February.
“The report was bearish really any way you look at it,” said Anthony Nunan, an assistant general manager for risk management at Mitsubishi Corp. in Tokyo. “So there was a bit of heat coming out of the market but it’s OK since were trading on expectations on the economy. And the economy is going to be going in fits and starts.” Crude oil for May delivery fell as much as 39 cents, or 0.5 percent, to $85.49 a barrel and was at $85.74 in electronic trading on the New York Mercantile Exchange at 11:55 a.m. Singapore time. Yesterday, the contract declined 96 cents, or 1.1 percent, to settle at $85.88, dropping from an 18-month intraday high of $87.09 made April 6.
Orders for factory equipment and items such as power generators, an indicator of business investment in three to six months, declined 5.4 percent from January, the Cabinet Office said today in Tokyo. The median estimate of 31 economists surveyed by Bloomberg was for a 3.7 percent gain. “Oil was getting a little bit frothy and probably out of line with where the fundamentals are at the moment,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. “We had a rise in crude stocks, which is not an isolated incident. It does seem that the supply overhang in the U.S. isn’t being properly addressed”.....Read the entire article.
Crude oil closed lower on Wednesday due to an increase in oil inventories and a decline in the equity markets. The low range close sets the stage for a steady to lower 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 May extends the rally off February's low, the 50% retracement level of the 2008-2009 decline crossing at 97.31 is the next upside target. Closes below the 20 day moving average crossing at 82.60 are needed to confirm that a short term top has been posted. First resistance is Tuesday's high crossing at 87.09. Second resistance is the 50% retracement level of the 2008-2009 decline crossing at 97.31. First support is the 10 day moving average crossing at 83.34. Second support is the 20 day moving average crossing at 82.60.
Natural gas closed lower due to profit taking on Wednesday as it consolidated some of Monday's rally. The low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. Multiple closes above Tuesday's high crossing at 4.334 are needed to confirm that a low has been posted. If May renews this winter's decline, weekly support crossing at 3.502 is the next downside target. First resistance is Tuesday's high crossing at 4.334. Second resistance is the 25% retracement level of the October-April decline crossing at 4.405. First support is today's low crossing at 4.010. Second support is last Thursday's low crossing at 3.810.
The U.S. Dollar closed higher due to short covering on Wednesday as it consolidated some of last week's decline but remains below the 10 day moving average crossing at 81.59. The low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near term. Closes below last week's low crossing at 80.52 are needed to confirm that a short term top has been posted. If June renews this winter's rally, the May 2009 high on the weekly continuation chart crossing at 83.34 is the next upside target. First resistance is March's high crossing at 82.52. Second resistance is the May 2009 high on the weekly continuation chart crossing at 83.34. First support is the 20 day moving average crossing at 81.12. Second support is last Thursday's low crossing at 80.52.
Crude oil fell for the first time in seven days after a government report showed a bigger than forecast increase in U.S. inventories as imports surged. Supplies rose 1.98 million barrels to 356.2 million last week, the Energy Department said today. Stockpiles were forecast to climb by 1.35 million barrels, according to a Bloomberg News survey of analysts. Imports gained 5.5 percent to 9.56 million barrels a day, the most since September. Refineries operated at the highest rate since October.
“The fundamentals don’t support prices at these levels,” said Michael Fitzpatrick, vice president of energy at MF Global in New York. “Oil supplies increased even as refineries boosted operating rates, which shows there is no problem with supply.” Crude oil for May delivery fell 22 cents, or 0.3 percent, to $86.62 a barrel at 1:43 p.m. on the New York Mercantile Exchange. Prices reached $87.09 yesterday, the highest level since Oct. 9, 2008. Futures are up 9.1 percent this year.
Imports of crude oil increased by an average 501,000 barrels a day last week, the report showed. Fuel imports climbed 7.5 percent to 2.76 million barrels, the highest level since the week ended Feb. 5. “Imports were very strong at over 9.5 million barrels a day,” said Rick Mueller, director of oil markets at Energy Security Analysis Inc. in Wakefield, Massachusetts. “That tells me that refiners are stocking up now because they are concerned that prices will rise further in the months ahead”....Read the entire article.
Dan Dicker, senior TSC contributor, and Chris Jarvis, president and founder of Caprock Risk Management, reveal how oil could head to $90 and what stocks to buy.
Crude oil continues to struggle around mentioned target of 61.8% projection of 69.50 to 83.16 from 78.56 at 86.92 and has possibly formed a temporary top with 4 hours MACD staying below 4 hours MACD. Some consolidations would likely be seen for the moment with risk of pull back to 4 hours 55 EMA (now at 84.11). But break of 78.56 support is needed to indicate that crude oil has topped. Otherwise, outlook will remain bullish. Sustained trading above 86.92 will target 90 psychological level next.
In the bigger picture, the strong break of 83.95 high confirmed that medium term rally from 33.2 has resumed. Nevertheless, there is no change in the view that it's the second wave of the whole correction that started in 2008 at 147.27. Hence, we'd continue to expect strong resistance near to 50% retracement of 147.27 to 33.2 at 90.24 to bring reversal. On the downside, below 78.56 support will be the first signal of topping and will turn focus back to 69.50 support for confirmation.....Nymex Crude Oil Continuous Contract 4 Hours Chart.
