Crude Oil Intraday Bias is Flipped Back to the Downside

Crude oil's sharp fall from 85.63 dragged 4 hours MACD below signal line and suggests that recovery from 80.53 has completed. Intraday bias is flipped back to the downside and deeper fall should be seen towards 38.2% retracement of 69.50 to 87.09 at 80.37 or further to 100% projection of 87.09 to 80.53 from 85.63 at 79.07. On the upside, above 85.63 will bring another rise to retest 87.09 high. But after all, sustained break there is needed to confirm rally resumption. Otherwise, another fall would still be seen before consolidation from 87.09 concludes.

In the bigger picture, medium term rise from 33.20 is viewed as a correction to the whole correction that started at 2008 at 147.27. Our preferred view is that rise from 33.2 is in form of a three wave structure (73.23, 65.05, ?) and should be near to completion. Strong resistance is expected around 90 psychological level, which coincide with 50% retracement of 147.27 to 33.2 at 90.24 and 61.8% projection of 33.2 to 73.23 from 65.05 at 89.79, and bring reversal. Hence, even though another rally cannot be ruled out, upside potential should be limited. On the downside, break of 69.50 support will break the series of higher low pattern from 33.2 and will be an important indication that the trend has reversed. In such case, we'll turn bearish on crude oil and expect the then down trend to target a new low below 33.2.....Nymex Crude Oil Continuous Contract 4 Hours Chart.



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Where is Crude Oil 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.




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Crude Oil Closes Below 20 Day, Signals Still Give Bulls The Advantage

Crude oil closed lower due to profit taking on Monday and below the 20 day moving average crossing at 84.97. The low range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI have turned bullish signaling that sideways to higher prices are possible near term. If June extends last Friday's rally, the reaction high crossing at 87.26 is the next upside target. Closes below last Thursday's high crossing at 81.73 would open the door for a larger degree decline into early May. First resistance is last Friday's high crossing at 85.19. Second resistance is the reaction high crossing at 87.26. First support is last Thursday's low crossing at 81.73. Second support is the 38% retracement level of the February-April rally crossing at 81.18.

Natural gas posted an inside day with a lower close on Monday and the mid-range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term. Multiple closes above the reaction high crossing at 4.421 are needed to confirm an upside breakout of this month's trading range. If June renews this winter's decline, weekly support crossing at 3.502 is the next downside target. First resistance is the reaction high crossing at 4.421. Second resistance is the 25% retracement level of the October-April decline crossing at 4.4438. First support is the reaction low crossing at 3.967. Second support is the early April low crossing at 3.914.

Gold closed slightly lower due to profit taking on Monday but remains above the 10 day moving average crossing at 1148.40. The low range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are turning neutral to bullish signaling that sideways to higher prices are possible near term. If June renews this year's rally, the 75% retracement level of the December-February decline crossing at 1184.00 is the next upside target. Closes below last Monday's low crossing at 1124.30 would confirm that a short term top has been posted. First resistance is today's high crossing at 1160.70. Second resistance is the reaction high crossing at 1170.70. First support is the 10 day moving average crossing at 1148.40. Second support is the 20 day moving average crossing at 1142.00.

The U.S. Dollar closed higher on Monday and the mid-range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term. If June extends this month's rally, March's high crossing at 82.52 is the next upside target. Closes below the 10 day moving average crossing at 81.07 are needed to confirm that a short term top has been posted. First resistance is last Friday's high crossing at 82.20. Second resistance is March's high crossing at 82.52. First support is the 20 day moving average crossing at 81.22. Second support is the 10 day moving average crossing at 81.07.



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Phil Flynn: Solid Economic Data

Solid economic data keeps the oil bulls dreams alive in an impressive drive to end the week. The market is still getting support from the calendar and found comfort in the fact that housing seemed to blow away market expectations. Sales of new homes increased by a stunning 26.9% over February, inspired by federal tax incentives for buyers that are set to expire in days. Still, as exciting as the numbers were by historical standards, they were not anything to write home about nor do they suggest that without government help they can be repeated. Yet it was enough to get the market to forget about Greece and their problems that had been weighing on the market in the morning.

The housing numbers made us forget all about Greece. Though Greece may be getting bailed out, the question remains if you will be next. Bloomberg News reports that Greece is unlikely to be the last euro nation to need an International Monetary Fund bailout, with Ireland, Spain and Portugal “conspicuously vulnerable, “the budget cuts needed in Europe in many countries are profound.” Bloomberg says that Portuguese, Spanish and Irish bond yields jumped last week as investors questioned their ability to reduce budget deficits and avoid Greece’s fate. Greece on April 23 triggered a 45 billion-euro ($60 billion) rescue package from the IMF and the euro region after its soaring deficit sent borrowing costs surging and sparked concern about a default. At 14.3 percent of gross domestic product, Ireland had the euro region’s largest deficit last year. Greece’s was 13.6 percent; Spain’s was 11.2 percent and Portugal’s 9.4 percent.

Yet despite the problems in Europe the oil market is getting caught up in a seeping wave of increasing economic optimism. Crude oil is getting its drive in part from fears that rates will continue to remain low as demand for the products rise increasing the chances for more commodity price inflation.

The Deepwater Horizon site is said to be leaking about 1000 barrels of oil per day. NOAA says that an attempt to control the leaking well using a Remotely Operated Vehicle (ROV) was not successful, and the well continues to leak. All available assets are being brought on-scene to address well control and cleanup of the floating oil. Over 1000 people are supporting the operational response. Efforts are now focused on gathering more information about the spill (amount, fate and effects), plans for possible undersea containment, drilling relief wells, maximizing oil recovery and readying for shoreline assessments. NOAA says the plan for attacking the spill has elements that try to activate the blow out preventer (BOP), a cut-off valve at the well head using ROVs, then if successful use an undersea dome to contain leaking oil. This process could take several months.

Phil Flynn can be reached at pflynn@pfgbest.com And make sure to watch him everyday on the Fox Business Network!


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Exxon Chevron Showdown

Chevron has been gaining while Exxon has been dropping, but based on valuations and smart money flows Exxon looks like the better investment.



Just click here for your FREE trend analysis for ExxonMobil, ticker XOM

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Crude Oil Daily Technical Outlook For Monday

Intraday bias in crude oil remains mildly on the upside and recovery from 80.53 could still continue towards 87.09 resistance. Nevertheless, sustained break there is needed to confirm rally resumption. Otherwise, another fall would still be seen before consolidation from 87.09 concludes. On the downside, below 82.86 minor support will flip intraday bias back to the downside for 38.2% retracement of 69.50 to 87.09 at 80.37 or possibly further to 61.8% retracement at 76.22.

In the bigger picture, medium term rise from 33.20 is viewed as a correction to the whole correction that started at 2008 at 147.27. Our preferred view is that rise from 33.2 is in form of a three wave structure (73.23, 65.05, ?) and should be near to completion. Strong resistance is expected around 90 psychological level, which coincide with 50% retracement of 147.27 to 33.2 at 90.24 and 61.8% projection of 33.2 to 73.23 from 65.05 at 89.79, and bring reversal. Hence, even though another rally cannot be ruled out, upside potential should be limited. On the downside, break of 69.50 support will break the series of higher low pattern from 33.2 and will be an important indication that the trend has reversed. In such case, we'll turn bearish on crude oil and expect the then down trend to target a new low below 33.2.....Nymex Crude Oil Continuous Contract 4 Hours Chart.


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Crude Oil Rises a Fifth Day on Signs Global Fuel Demand to Recover

Crude oil rose for a fifth day on speculation demand will increase as the world economy recovers from recession. Oil traded above $85 a barrel as a Conference Board report tomorrow in the U.S., the world’s largest energy user, will probably show consumer confidence climbed to a three month high. Asian stock markets rose by the most in five weeks on expectations of higher earnings at Toyota Motor Corp. in Japan.

“People are becoming more bullish on oil demand growth,” said Serene Lim, an energy commodity strategist at Australia & New Zealand Banking Group Ltd. in Singapore. “The more positive world economic data, especially in the U.S. data, is bringing about more optimism.” Crude oil for June delivery rose as much as 44 cents, or 0.5 percent, to $85.56 a barrel in after hours electronic trading on the New York Mercantile Exchange. It was at $85.36 at 1:39 p.m. in Singapore.

The MSCI Asia Pacific Index rose 1.5 percent to 127.24 as of 12:40 p.m. in Tokyo, with more than seven times as many stocks advancing as declining. Oil climbed 1.7 percent to $85.12 on April 23, the highest settlement since April 15, after government reports showed that U.S. sales of new homes surged in March and orders for non transport durable goods climbed. Commodities had rallied as the dollar fell against the euro for the first time in seven days.

A Commerce Department report on April 23 showed that sales of new U.S. homes increased 27 percent in March, the most in 47 years. Bookings for goods meant to last at least three years, excluding cars and aircraft, climbed 2.8 percent.....Read the entire article.


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Weekend Gold, Silver, Natural Gas, Crude Oil & SP500 Report

Last week the market slowly recovered from the recent sell off in stocks and commodities. So far the market is unfolding as we expected and with any luck there will be a surge of low risk setups across the market in the near future. Take a look at the charts below.

GLD – Gold Chart
GLD/Gold is trading at a key pivot point. This week there will most likely be a sizable move either up or down. Past chart analysis is pointing to lower prices which would complete an ABC trace pattern and this makes for a larger and stronger rally once prices to turn back up. Silver is trading in much the same situation. Gold and silver tend to move together with silver having more volatility than gold.



UNG – Natural Gas Chart
Natural Gas continues to try and bottom and posted some solid gains last Thursday & Friday with rising volume. But we have seen this pattern form over and over again in the past year so I am not excited yet. Once the base is formed and the trend starts up we will find low risk entry points for this commodity. I would look for shorting opportunities but natural gas is so oversold I feel the risk is higher than I prefer.



USO – Crude Oil Chart
Looks like the trend line break down flushed out a lot of weak positions as seen in the volume surge. Oil momentum is still down but we are now starting to look for a buy signal.



SPY – SP500 Chart
Equities recovered nicely from the previous week’s sharp sell off. We saw volume rise with higher prices which is a strong sign of the overall strength of the market. But it is important to note that the market sentiment has reached an extreme level with 53% of traders now being bullish on the market and only 17% being bearish. This extreme level is the same level reached just before the January correction earlier this year.



Equities and Commodity Trading Conclusion:
If recent historical prices repeat again then we are looking for a small move higher on Monday and then a couple days of weakness for both stocks and commodities later in the week. The market is very close to generating several low risk trading signals which is very exciting.

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Where is Crude Oil Headed Next Week?

CNBC's Sharon Epperson discusses the day's activity in the commodities market and looks ahead to where oil is likely headed next week.





Just click here for your FREE trend analysis of crude oil ETF USO



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Crude Oil Weekly Technical Outlook

Crude oil's rebound from 80.53 resumed towards the end after initial setback and closed strongly at 85.12. Further rise would be in favor to retest 87.09 high but after all, sustained break there is needed to confirm rally resumption. Otherwise, another fall would still be seen before consolidation from 87.09 concludes. On the downside, below 81.73 minor support will flip intraday bias back to the downside for 38.2% retracement of 69.50 to 87.09 at 80.37 or possibly further to 61.8% retracement at 76.22.

In the bigger picture, medium term rise from 33.20 is viewed as a correction to the whole correction that started at 2008 at 147.27. Our preferred view is that rise from 33.2 is in form of a three wave structure (73.23, 65.05, ?) and should be near to completion. Strong resistance is expected around 90 psychological level, which coincide with 50% retracement of 147.27 to 33.2 at 90.24 and 61.8% projection of 33.2 to 73.23 from 65.05 at 89.79, and bring reversal. Hence, even though another rally cannot be ruled out, upside potential should be limited. On the downside, break of 69.50 support will break the series of higher low pattern from 33.2 and will be an important indication that the trend has reversed. In such case, we'll turn bearish on crude oil and expect the then down trend to target a new low below 33.2.

In the long term picture, there is no change in the view that fall from 147.27 is part of the correction to the five wave sequence from 98 low of 10.65. While the rebound from 33.2 is strong and might continue, there is no solid evidence that suggest fall 147.27 is completed and we're still preferring the case that rebound from 33.2 is merely a corrective rise only. Having said that, strong resistance should be seen between 76.77/90.24 fibo resistance zone and bring reversal for another low below 33.2 before completing the whole correction from 147.27.....Nymex Crude Oil Continuous Contract 4 Hours Chart.



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