Stage is Set For Lower Crude Oil Numbers Next Week

Crude oil closed lower on Friday as it extends this week's decline. The low range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term. If June extends this week's decline, the 87% retracement level of the February-April rally crossing at 72.86 is the next downside target. Closes above the 20 day moving average crossing at 83.51 would confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 82.23. Second resistance is the 20 day moving average crossing at 83.52. First support is today's low crossing at 74.51. Second support is the 87% retracement level of the February-April rally crossing at 72.86.

Natural gas closed higher due to short covering on Friday as it consolidates above trading range support crossing at 3.914. The high range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near term. If June renews this winter's decline, weekly support crossing at 3.502 is the next downside target. Closes above the 20 day moving average crossing at 4.119 are needed to confirm that a low has been posted. First resistance is the 20 day moving average crossing at 4.119. Second resistance is the 25% retracement level of the October-April decline crossing at 4.438. First support is Thursday's low crossing at 3.855. Second support is weekly support crossing at 3.502.

The U.S. Dollar closed lower due to profit taking on Friday as it consolidated some of this month's rally. The low range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term. If June extends this month's rally, weekly resistance crossing at 85.85 is the next upside target. Closes below the 20 day moving average crossing at 82.01 are needed to confirm that a short term top has been posted. First resistance is Thursday's high crossing at 85.46. Second resistance is weekly resistance crossing at 85.85. First support is the 10 day moving average crossing at 83.04. Second support is the 20 day moving average crossing at 82.01.

Gold closed higher on Friday as it extends the rally off February's low. The high range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. If June extends this year's rally, December's high crossing at 1230.00 is the next upside target. Closes below the 20 day moving average crossing at 1163.20 would confirm that a short term top has been posted. First resistance is today's high crossing at 1214.90. Second resistance is December's high crossing at 1230.00. First support is the 10 day moving average crossing at 1177.10. Second support is the 20 day moving average crossing at 1163.20.




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Stock Market Micro Intraday Crash Shows Us Where The Safe Havens Are

WOW....Now that was an exciting day in the market!!
This day will be talked about for years to come and the individual who hit the wrong button (“B” for billion instead of “M” for million) to sell billions instead of millions will have a tough time finding another job… Maybe this person can do commercials for Microsoft Windows showing how one simple key stroke can crash a system… lol

On a more serious note, a member in the chat room had a good point… Who would create a program that can not only bankrupt the company in one key stroke but also crash the entire broad market in 10 minutes losing millions of investor’s hard earned money??

I will keep this short with my Cole Notes Version on a few opinions of mine.

Banks – Good for taking your money and crashing the markets
All we have heard about in the past year is bank this, and bank that…. They take our money, bet on crazy investments, lose it, then get free money from the Feds to replace that lost money and they keep it for them selves….

Well today the market crashed because of a bank which should not be a surprise after everything else they have messed up. But to add more to the fire I had a lot of subscribers and followers today tell me they tried to trade with their brokers and they could not get orders to be executed. When I asked these individuals who they are using I got the same response… They were trading through a bank… This really makes my upset as I hate watching the bad guys (banks) keep winning/taking everyone’s money…..

Stock Market Circuit Breakers Failed
I find it amazing how the financial system has circuit breakers to protect investors from a market crash yet today they did not get triggered…

Rule is (and dumb one in my opinion) is that a circuit breaker (halts trading on the stock market for a set period of time) can only be triggered before 2:30pm ET. Funny thing is that the crash happened 7 minutes after 2:30. Manipulation???

2-3 Week Market Correction, Corrected in One Day
A pullback in the broad market which normally would have taken a few weeks at the most happened in one afternoon which is amazing really. Don’t get me wrong, I thought what happen today was very interesting, profitable and a lot of fun. But a move this drastic does throw a wrench into everyone technical analysis and it will be a few days before we get enough price action to start piecing this market back together for what looks most likely to unfold in the coming days and weeks.

Gold & US Dollar Rally Together
The past 2 weeks we have seen gold and the dollar move up together. This is very strong for gold. Even if we see the dollar roll over and head south that would help boost the price of gold… The short term charts for gold are looking tired be sure to watch the video below.

End of week Trading Conclusion:
This week was a crazy one with gold and the dollar moving higher together and the stock market crashing over 9% in one day…

It will take a few days for all this extreme price action to smooth out as we try and grasp if this is a bottom or the beginning of a major meltdown.

Just click here if you would like to receive Chris Vermeulen's Trading Analysis and Signals.



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Crude Falls on Concern European Debt Crisis Will Derail Economic Recovery

Crude oil tumbled, heading for its biggest weekly decline in 16 months, on concern Europe’s debt crisis will derail the global economic recovery. Futures dropped as much as 3.4 percent as equities fell amid speculation Greece’s debt crisis will spread to other countries. German Chancellor Angela Merkel said euro area countries must speed up efforts to tighten financial regulation and pursue budget consolidation. “The continued problems over in Europe seem to be infecting the rest of the world,” said Sean Brodrick, a natural resource analyst with Weiss Research in Jupiter, Florida. “If this thing continues it could really hurt the chances of a global recovery.”

Crude oil for June delivery fell $1.84, or 2.4 percent, to $75.27 a barrel at 12:32 p.m. on the New York Mercantile Exchange. Earlier, it touched $74.51 a barrel, the lowest level since Feb. 16. Futures are down 13 percent for the week, the biggest drop since the week ended Dec. 19, 2008. Oil settled at an 11 week closing low of $77.11 in New York yesterday after the euro fell against the dollar and the Dow Jones Industrial Average lost as much as 998.5 points, a 9.2 percent plunge that was the biggest intraday percentage loss since 1987. Futures touched $87.15 a barrel on May 3, the highest level since October 2008.

Shakeout ‘Overdue’
“The oil market was overdue for a shakeout like this,” said Addison Armstrong, director of market research at Tradition Energy, a Stamford, Connecticut based procurement adviser. “Eighty seven dollars certainly wasn’t a justifiable level based on the fundamentals and if you start thinking about the potential ramifications for economic growth of what’s happening in Europe.”

A 110 billion euro ($140 billion) aid package to avoid a default by Greece has failed to prevent bond yields from rising, driving up borrowing costs for countries including Spain and Portugal. Moody’s Investors Service yesterday placed Portugal on review for a possible downgrade.

U.S. payrolls jumped 290,000 last month, more than the median estimate of economists surveyed by Bloomberg News, after a revised 230,000 increase in March that was larger than initially estimated, figures from the Labor Department in Washington showed today.

If commodities and equities “struggle to move higher in the wake of this positive report, the specter of bearish forces for growth may be larger than participants are currently pricing in and could push commodity and equity markets lower,” said Jason Schenker, president of Prestige Economics LLC, an Austin, Texas-based energy consultant, in a report today.

Equities Fall
The Standard & Poor’s 500 Index fell 0.7 percent to 1,119.9 at 11:38 a.m. after plunging as much as 3 percent. The Reuters/Jefferies CRB Index of 19 commodities fell 0.7 percent to 260.41, the weakest since Feb. 5. Ten of the commodities retreated, led by cocoa, crude and heating oil. “The market is not getting over the concerns of where we end up after the Greece situation gets resolved,” said John Kilduff, a partner at Round Earth Capital, a New York based hedge fund that focuses on food and energy. Brent oil for June settlement declined $1.60, or 2 percent, to $78.23 a barrel on the London based ICE Futures Europe exchange.


Reporters Margot Habiby and Aaron Clark can be reached at mhabiby@bloomberg.net and aclark27@bloomberg.net.



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MarketClub Crude Oil, Gold, Natural Gas and U.S. Dollar Numbers For Friday Morning

Crude oil was higher due to short covering overnight as it consolidates some of the decline off April's high. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term. If June extends the decline off April's high, the 87% retracement level of the February-April rally crossing at 72.86 is the next downside target. Closes above the 20 day moving average crossing at 83.66 would confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 82.52. Second resistance is the 20 day moving average crossing at 83.66. First support is Thursday's low crossing at 74.58. Second support is the 87% retracement level of the February-April rally crossing at 72.86.

Natural gas was slightly higher due to short covering overnight as it consolidates above trading range support crossing at 3.914. Stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices are possible near term. A downside breakout of trading range support crossing at 3.914 would open the door for a possible test of weekly support crossing at 3.339 later this spring. Closes above the 20 day moving average crossing at 4.117 would temper the near term bearish outlook. First resistance is the 10 day moving average crossing at 4.117. Second resistance is last Wednesday's high crossing 4.424. First support is Thursday's low crossing at 3.855. Second support is weekly support crossing at 3.339.

The U.S. Dollar was lower due to profit taking overnight as it consolidates some of this year's rally. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term. If June extends this year's rally, the 75% retracement level of 2009's decline on the weekly continuation chart crossing at 85.85 is the next upside target. Closes below the 20 day moving average crossing at 82.00 are needed to confirm that a short term top has been posted. First resistance is Thursday's high crossing at 85.46. Second resistance is the 75% retracement level of 2009's decline on the weekly continuation chart crossing at 85.85. First support is the 10 day moving average crossing at 83.03. Second support is the 20 day moving average crossing at 82.00.

Gold was higher overnight and is poised to extend the rally off February's low. Stochastics and the RSI are diverging but are turning neutral to bullish signaling that additional gains are possible near term. If June extends the rally off March's low, the 87% retracement level of the December-February decline crossing at 1206.90 is the next upside target. Closes below the 20 day moving average crossing at 1162.60 are needed to confirm that a short term top has been posted. First resistance is Thursday's high crossing at 1211.90. Second resistance is the December high crossing at 1230.00. First support is the 10 day moving average crossing at 1175.90. Second support is the 20 day moving average crossing at 1162.60.




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Crude Oil Daily Technical Outlook For Friday

Crude oil dropped to as low as 74.59 and formed a temporary low there and recovered. Intraday bias is turned neutral for the moment and some consolidations might be seen. But upside should be limited below 61.8% retracement of 87.15 to 74.59 at 82.35 and bring fall resumption. On the downside, below 76.56 minor support will flip intraday bias back to the downside. Break of 74.59 will target a test on 69.05 key support.

In the bigger picture, as noted before, 33.20 is viewed as a correction to the whole correction that started at 2008 at 147.27. Such rise might have completed at 87.15 already, ahead of 50% retracement of 147.27 to 33.2 at 90.24. 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 Friday?

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 Bulls Continue to Take on Chart Damage....Bears Hold Clear Advantage

Crude oil closed down $3.53 at $76.44 a barrel today. Prices closed nearer the session low today and hit a fresh three month low of $74.58 amid the EU debt crisis that is playing out and which has rattled most markets. A stronger U.S. dollar index and meltdown in the stock markets were main bearish factors for crude today. Serious near term chart damage has been inflicted in crude this week, to suggest a near term market top is now in place.

Natural gas closed down 7.5 cents at $3.917 today. Prices closed nearer the session low today, scored a bearish "outside day" down on the daily bar chart and scored a fresh contract low. The bears have the solid near term technical advantage. The next upside price objective for the bulls is closing prices above solid technical resistance at $4.25.

The U.S. dollar index closed up 84 points at 85.04 today. Prices closed nearer the session high today and hit another 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 still no early technical clues to suggest a market top is close at hand.

Gold closed up $28.00 at $1,203.00 today. Prices closed near the session high today and hit a fresh five month high of $1,209.20. Safe haven buying amid the European Union debt crisis is fueling strong gains in gold. A stronger U.S. dollar and lower crude oil prices failed to limit the strong buying interest in gold today. A meltdown in the U.S. stock market in afternoon trading gave gold prices an additional boost. Gold bulls have the solid near term technical advantage and gained more upside technical momentum today.

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Crude Oil Tumbles to Nine Week Low on Stronger Dollar, Rising Supplies

Crude oil fell to a nine week low in New York as the euro dropped against the dollar on concern that Greece’s debt crisis will spread, curbing economic growth. Oil has lost 8 percent since May 3, the steepest three day decline since July 2009, as the dollar surged versus the common currency, reducing the appeal of commodities as an alternative investment. Moody’s placed its Aa2 rating for Portugal on review for a possible downgrade, a process that will conclude within three months, the company said in a statement yesterday.

“The oil market is being hit by a double whammy,” said Jason Schenker, president of Prestige Economics LLC, an Austin, Texas based energy consultant. “The rise in the dollar is pummeling crude. Also, there are global growth concerns which have increased because of the credit downgrades in Europe and the Greek debt crisis.” Crude oil for June delivery fell 71 cents, or 0.9 percent, to $79.26 a barrel at 9:58 a.m. on the New York Mercantile Exchange. Futures touched $78.24, the lowest level since March 1. Prices have climbed 41 percent in the past year.

Brent oil for June settlement declined 56 cents, or 0.7 percent, to $82.05 a barrel on the London based ICE Futures Europe exchange. The contract touched $81.12, the lowest level since March 31. The euro dropped 0.5 percent to $1.2748 from $1.2814 yesterday. The common currency touched $1.2691, the weakest level since March 2009.
Standard & Poor’s last month downgraded Greece’s debt to junk and followed with cuts to Portugal and Spain.

‘Mass Exodus’

“You’re starting to see a mass exodus as people are expecting more problems from the European debt crisis,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. U.S. stockpiles of crude oil rose 2.76 million barrels last week to the highest level since June, an Energy Department report showed yesterday. It was the 13th gain in 14 weeks.

Crude oil inventories at Cushing, Oklahoma, where the New York traded West Texas Intermediate grade is stored, rose 4.9 percent to 36.2 million barrels, the highest level since the department began reporting on supplies at the hub in April 2004. Oil for June delivery is at a $3.13 a barrel discount to the July contract in New York, the widest spread in more since Feb. 17, 2009. December crude is trading at a $7.08 premium to the front contract.


Reporter Mark Shenk can be contacted at mshenk1@bloomberg.net



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