Crude Oil Market Commentary For Tuesday Evening

Crude oil closed down $3.44 at $82.75 a barrel today. Prices closed near the session low today amid the EU debt crisis that is playing out. The bulls faded badly today but still have the overall near term technical advantage.

Natural gas closed up 1.6 cents at $4.016 today. Prices closed near mid range today and saw tepid short covering in a bear market. Prices last Friday hit a fresh contract low. The bears have the solid near term technical advantage.

The U.S. dollar index closed up 102 points at 83.42 today. Prices closed near the session high today and hit a fresh contract and 12 month high. European Union sovereign debt troubles will continue to support the dollar index. The bulls have the solid overall near term technical advantage. There are no early technical clues to suggest a market top is close at hand.

Gold futures closed down $11.00 at $1,172.30 today. Prices closed nearer the session low and scored a bearish "outside day" down on the daily bar chart, whereby the high was higher and low was lower than Monday's trading range, with a lower close. Profit taking pressure was seen today following recent gains in gold. Gold prices hit a fresh five month high early on today. Gold was also pressured by a stronger U.S. dollar index today. No significant chart damage occurred today, but strong follow through selling pressure on Wednesday would begin to dent bullish technical momentum in gold.


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Randy Ollenberger: Is Now the Time to Invest in Oil?

Discussing whether now is the time to invest in oil, with Randy Ollenberger, BMO Capital Markets and Thaddeus Vayda, Stifel Nicolaus.




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Crude Oil Tumbles Most in Three Months as Dollar Surges, Stocks Drop

Crude oil declined the most in three months as the dollar strengthened against the euro, curbing the appeal of commodities to investors, and a slowdown in Chinese manufacturing sent global equities lower. Oil fell more than $3 a barrel as the dollar climbed to the highest level versus the common currency in a year on concern the Greek debt crisis will spread. A Chinese purchasing managers’ index fell to a six month low. Prices topped $87 a barrel for the first time in three weeks yesterday on signals the U.S. economic recovery is accelerating.

“Prices are considerably lower because the dollar is very strong and equities are being pounded,” said Addison Armstrong, director of market research at Tradition Energy, a Stamford, Connecticut based procurement adviser. “There’s been a strong reversal over the last 24 hours after we failed to hang above $87 for a second time.”
Crude oil for June delivery fell $3.05, or 3.5 percent, to $83.14 a barrel at 1:53 p.m. on the New York Mercantile Exchange. Oil dropped as much as 4.1 percent, the most since Feb. 4. Futures are up 4.8 percent this year.

Oil in New York rose as much as $1 a barrel yesterday to a 19 month high of $87.15 after the Institute for Supply Management’s factory index climbed to 60.4, the most since June 2004. Economists projected a gain to 60, based on a Bloomberg News survey. Prices last breached $87 on April 6 and 7. Brent oil for June settlement declined $3.05, or 3.4 percent, to $85.89 on the London based ICE Futures Europe exchange.

‘The Nasty Reality’

“Yesterday’s positive economic indicators have been overtaken by the nasty reality in Europe,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “It looks like oil will remain under pressure”....Read the entire article.


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New Video: Is it All Over For The Euro?

Things have been bad in Europe recently. Between the travel restrictions due to the volcano and ash, as well as Greece not wanting to conform to strict fiscal policies, problems are adding up and adding weight onto the euro.

It is interesting to note that in the beginning of 2010, everyone was bearish on the dollar. Looking at the market action alone we could see that the dollar has done very well vis-à-vis the euro. This is where technical analysis shines as it is an unbiased viewpoint of the collective wisdom of all market participants.

In this new video we show you how you can trade the euro/USD cross using our "Trade Triangle" technology and come out of winner no matter what happens to Greece, Portugal, or Spain.

Just click here to watch Is it All Over For The Euro? And as always you can watch our videos without registration and there are no fees involved. Please feel free to leave a comment and let us know what you think about the EURO/USD trade.



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Spain is in Pain – US Dollar & Gold Are Safe Havens

It’s been an interesting week with Spain being downgraded as Europe debt crisis widens. This has investors looking at the US dollar in a new light thinking that maybe it’s not that bad of an investment after all. This sent the US Dollar higher along with the price of gold so far this week.

The past 7 days we have seen both the US Dollar and Gold rise together which is not something that happens often. With financial crisis’s popping up around the world I think the US dollar and gold will continue to strengthen (with corrections along the way). I think it will take another 12-24 months before another wave if issues arise in the financial markets and until then we just continue to focus mainly on buying the dips and corrections with the occasional short play in the larger corrections.



SP500 – Daily Chart

On April 14th we saw an extreme level of selling which sent the broad market sharply lower. This sell off was followed by value buyers pushing the prices back up to new 2010 highs.

Well this week we have seen the same extreme selling volume and the question we all want to know is will there be buyers this time around?



ETF & Futures Trading Conclusion

Gold is in a bull market but it was setup for another round of selling but this Spain issue has been a pain. If we had another downward word move on gold to the $1115 – 1120 area it would have washed out the majority of gold bulls resetting it’s self up for a big rally.

The Europe debt crisis has thrown a twist into the picture helping boost the price of gold. Gold could still head lower washing out the weak positions but the picture is fuzzy. Silver did not react much to this news as it’s not really seen as the safe haven gold or the US Dollar are.

As for stock picks and the broad market, it looks and feels like we are about to start a correction. But this week we saw fear in the market again with the VIX and selling volume surging higher to levels which have triggered temporary bottoms in the past. The problem I see here is that some key price levels have been taken out, so the odds are pointing to lower prices in the near future. But Tuesdays panic selling has pushed the market into an oversold condition so we should see a drift upwards for 1-4 days before sellers get active again as they want to sell and short the market at premium prices.

In short, precious metals are not giving any clear price action to take advantage of yet, and the SP500 looks like it’s on its last legs before heading lower for a meaningful correction which should provide a short setup and then a nice long setup once it bottoms out.

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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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Phil Flynn: Oil On Junk

Oil prices and commodities got slammed on the S&P downgrades. They sent Greece to junk and Portugal is headed in that direction. Once again oil traders are reminded how much of the price of oil is dependent on some semblance of market stability. With the Fed dead ahead, oil traders have to realize that the price of oil transcends what some consider traditional supply and demand fundamentals. It is also a reflection of how the world views the economy and the relative value of the currency backing this commodity.

In the beginning of the financial crisis oil soared towards $147 a barrel and I attempted to explain that things were amiss. The price move in oil was out of line with the five year average price increase that already reflected stunning oil demand growth. I was scoffed at by some when I suggested that the spike in oil might lead to demand destruction. That the world economy had not “decoupled” from the US economy and that no matter what, Europe and China would consume oil even if the US banks started to fail. The naysayer and the blindly bullish say that the price move was just a function of peak oil and the prices would continue to soar higher and that price would have little impact on demand.

Yet I said that oil was being used as a safe haven and a hedge against systemic risk as the sub-prime crisis began to evolve. Of course the skeptics say it was nothing but a case of speculation gone wild. We remember that we were told not to worry because sub-prime crisis was less than 10% of all mortgages, the same way some are saying now not to worry about Greece because it is such a small economy.

We may see oil come back a bit today. The Greece crisis is in the market for the time being and oil may focus less on the loss of demand created by this crisis but by the fact that this crisis may ensure that US interest rates will stay lower for longer than expected. The Fed Fund Futures November contract which had priced in a 74% chance of a quarter point interest rate increase fell 15% after the European downgrade after the news. If the oil market gets the sense that interest rates are going to stay low for a longer and longer period of time, then oil becomes more bullish. It becomes bullish because the dollar will get weaker and it will get stronger as oil already puffed up on cheap printed oil stimulus money, then we can continue to see this global demand growth until the bubble eventually pops.

The Fed meeting will be key! The best way to get that news is watching it on the Fox Business Network where you can see Phil every day! Phil can also be reached at pflynn@pfgbest.com.


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Crude Oil Market Commentary For Wednesday Evening

Crude oil closed up $0.76 at $83.20 a barrel today. Prices closed near the session high today after hitting a fresh five week low early on. Crude oil bulls are fading and need to show more power soon. The next upside price objective for the bulls is producing a close above solid technical resistance at the April high of $87.59 a barrel.

Natural gas closed up 4.2 cents at $4.357 today. Prices closed near mid-range today and did hit a fresh five week high in quieter trading. Bears still have the overall near term technical advantage. Prices are trading sideways and choppy at lower price levels. The next upside price objective for the bulls is closing prices above solid technical resistance at $4.75.

Gold futures closed up $10.00 at $1,172.70 today. Prices closed nearer the session high today and hit a fresh nearly five month high. Gold's gains today again came despite a stronger U.S. dollar and lower crude oil futures prices. Traders this week are buying gold as a safe haven asset and as a hedge against further weakening of the European currencies as the Greek debt crisis appears to be worsening. Gold bulls have the solid near term technical advantage and have gained more upside momentum this week.

The U.S. dollar index closed up 16 points at 82.47 today. Prices closed near mid-range today and hit another fresh contract high on a flight to quality amid the European Union's sovereign debt crisis. The bulls have the solid overall near term technical advantage and have gained more upside momentum this week.


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Crude Oil Daily Technical Outlook Wednesday Morning

Intraday bias in Crude oil remains on the downside for the moment and further decline should be seen to 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 82.94 minor resistance will turn intraday bias neutral and bring recovery. But risk will now remain on the downside as long as 85.63 resistance holds.

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.

So 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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Stronger Dollar Sends Crude Oil Bulls to the Sidelines

Crude oil closed down $2.14 at $82.06 a barrel today. Prices closed near the session low today and closed at a fresh five week low close. Prices were pressured by a stronger U.S. dollar index and weaker stock market today. Crude oil bulls are now fading and need to show fresh power soon. The next upside price objective for the bulls is producing a close above solid technical resistance at the April high of $87.59 a barrel.

Natural gas closed down 2.4 cents at $4.327 today. Prices closed near mid-range today in quieter trading. Bears still have the overall near term technical advantage. Prices are trading sideways and choppy at lower price levels. The next upside price objective for the bulls is closing prices above solid technical resistance at the April high of $4.421.

Gold futures closed up $8.00 at $1,162.00 today. Prices closed nearer the session high today, scored a bullish "outside day" up on the daily bar chart and hit a fresh three week high. Gold's gains came despite a stronger U.S. dollar and lower crude oil futures prices. Traders were buying gold today as a hedge against further weakening of the European currencies as the Greek debt crisis appears to be worsening. Gold bulls have the firm near term technical advantage and gained some more upside momentum today.

The U.S. dollar index closed up 86 points at 82.47 today. Prices closed nearer the session high today and hit a fresh contract high on a flight to quality amid the European Union's sovereign debt crisis. The bulls have the solid overall near term technical advantage and gained more upside momentum today.


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