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.
The reason why last week's jobs report was so bad was because we were mislead and told it was supposed to be so good. The Obama administration told the markets a big whopper and the market made them pay. The global economy is looking for confidence and credibility so when the administration misled us the market now thinks they may be hiding something worse. Both Obama and Bided falsely raised the expectations of the market place by touting a super strong jobs report that was not there on Friday.
If you don’t have anything truthful to say about an upcoming report then say nothing at all. If you want to spin the report to your own political advantage, well that is fine with me but do it after the report is released and not before. So much for this so called great jobs report that showed that the private sector employment is struggling. The part of the report that they were trying to get people to focus on was the headline number that showed there were 431,000 jobs created in May nationwide. Sounds great but.....Read the entire article.
As noted before, crude oil's recovery from 64.24 should have completed at 75.72 already. Further decline remains in favor to retest 64.24 low first. Break there will confirm that whole decline for 87.15 has resumed and should target next key level at 60, which is close to 50% retracement of 33.2 to 87.15 at 60.18. On the upside, above 75.72 will bring another rise, but after all, upside should be limited by 61.8% retracement of 87.15 to 64.23 at 78.39 and bring fall resumption.
In the bigger picture, prior break of 68.59/69.50 support zone affirms our view that whole medium term rebound from 33.2 has completed at 87.15 already, just ahead of 50% retracement of 147.27 to 33.2 at 90.24. Further decline should be seen to 50% retracement of 33.2 to 87.15 at 60.18 at least. Also, as rebound from 33.2 is viewed as as a correction to the whole correction that started at 2008 at 147.27, we'd anticipate a break of 33.2 low in the longer term. On the upside, break of resistance at 78 level is needed to be indicate that fall from 87.15 is completed. Otherwise, we'll stay bearish.....Nymex Crude Oil Continuous Contract 4 Hours Chart.
Crude oil dropped for a second day on concern the government debt crisis in Europe will widen and after the U.S. added fewer jobs than forecast last month, slowing a recovery in fuel demand.
Prices posted their biggest two day decline in a month as the euro dropped against the dollar on speculation Europe’s sovereign debt crisis will spread into the financial system. Oil fell 4.2 percent on June 4 after the Labor Department said that payrolls rose by 431,000 in May. Economists projected a 536,000 gain, according to the median forecast in a Bloomberg News survey.
“The U.S. payroll data was on the weak side of expectations and put a question mark next to the rate of U.S. economic recovery,” David Moore, a commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney, said by telephone today. “Concerns about Europe haven’t gone away. There are stories starting to emerge about Hungary’s fiscal position and that is affecting market sentiment.”
Crude oil for July delivery fell as much as $2, or 2.8 percent, to $69.51 a barrel in electronic trading on the New York Mercantile Exchange, and was at $70.04 a barrel at 10:22 a.m. Singapore time. The contract has fallen 6.1 percent since closing at $74.61 a barrel on June 3, the biggest two day decline since May 6.
The U.S. government hired 411,000 temporary workers for the 2010 census, accounting for the bulk of the gain in employment. Private payrolls rose a less than forecast 41,000. The growth in jobs in the private sector followed an increase of 218,000 in April that was revised from 231,000.....Read the entire article.
It was another extremely volatile week sharp rallies followed by sharp sell offs. Fear is in no doubt controlling the market. The bulls and bears continue to battle it out. The charts below cover some important trends and market internals I pay attention to on a daily basis.
US Dollar Index – Daily Chart
The past two months the dollar as been in rally mode. The last 14 days we have seen a large bullish pennant form and this pattern typically marks the half way point for the current tend. The measured move for the USD is pointing to 93 over the next few months.
Gold Futures Prices – Daily Chart
Gold as we all know is seen as the major safe haven and the price per ounce has been steadily climbing. Friday we saw the major indexes sell down very hard but both the dollar and gold posted some solid gains. Gold does looks as though it needs some time to digest the recent move higher and this could take a week or two before anything exciting happens but I am on the lookout for low risk setups.
VIX – Volatility Index – 60 Minute Chart
This index measures the fear in the market. When fear is high and everyone is selling their positions we see the VIX jump in price. Over the past month we can see a possible Head & Shoulders pattern forming. If this pattern unfolds like it should then we will see the price of equities bottom in the coming week with the VIX dropping below the blue neckline. The old saying is “When the VIX is High is time to Buy, when the VIX is low its time to Go”.
Put Call Ration – 60 Minute Chart
In short, when the put/call ration is over 1.00 then there are more traders/investors buying Put Options than Call Options. Put options are when people are buying leverage to take advantage of lower prices. My thought/opinion about this is when more people are trading with leverage anticipating lower prices, I figure they have sold all their long positions and are now using leverage to profit from lower prices. Well if the majority of individuals have sold everything then in reality there should not be much left to be sold… So I feel this correction which started in April is almost finished.
NYSE Advance/Decline Line – 60 Minute Chart
This is one of my favorite charts to look at. While there are several indicators, market internals and technical analysis needed to clearly determine if the market is currently overbought or oversold, this chart is one that can help give you a good idea if you should be looking to buy, short or just stay in cash for the time being.
SP500 Futures Prices - 2 Hour Chart
The SP500 has been up and down like a yo-yo with some very dramatic moves. Up 2+% day down 2+% the next… very sharp and powerful moves can be both every profitable or costly if not traded correctly. Last week we caught a nice 2% gain in less than 24 hours which was an exciting trade. It looked at though the market was about to breakout to the upside and possibly reach the 1150 level but early Friday morning there were rumors about some Euro bank having serious problems and that was just enough to cause a domino effect sending the market lower throughout the entire session closing on a very strong negative note for the day/week.
That being said the market internals are indicating that equities are oversold at these current prices and a bounce is due any time. With the panic selling on the NYSE Friday reaching 119 sell orders for every 1 buy order I think we will see some follow through next week with lower prices, then a rebound once investors finish selling everything they own at which point we will be looking to get involved again.
Weekly Trading Conclusion:
In short, money continues to flow into the safe havens (Gold & US Dollar). The major indices are showing extreme panic selling and look ready to in the next few days. There is a possibility that the market could break down and start another major leg lower which is a big concern to me. I will be glued to the market internals and support levels for the major commodities and equity sectors in hopes to catch the bottom or to avoid another melt down.
Crude oil's break of 71.23 minor support last week suggests that recovery from 64.24 is already completed at 75.72 already. Initial bias is mildly on the downside this week for a test on 64.24 low first. Break there will confirm that whole decline for 87.15 has resumed and should target next key level at 60, which is close to 50% retracement of 33.2 to 87.15 at 60.18. On the upside, above 75.72 will bring another rise, but after all, upside should be limited by 61.8% retracement of 87.15 to 64.23 at 78.39 and bring fall resumption.
In the bigger picture, prior break of 68.59/69.50 support zone affirms our view that whole medium term rebound from 33.2 has completed at 87.15 already, just ahead of 50% retracement of 147.27 to 33.2 at 90.24. Further decline should be seen to 50% retracement of 33.2 to 87.15 at 60.18 at least. Also, as rebound from 33.2 is viewed as as a correction to the whole correction that started at 2008 at 147.27, we'd anticipate a break of 33.2 low in the longer term. On the upside, break of resistance at 78 level is needed to be indicate that fall from 87.15 is completed. Otherwise, we'll stay bearish.
In the long term picture, current development suggests that rebound from 33.2 is finished at 87.15, inside 76.77/90.24 fibo resistance zone as expected. Our view is that fall fro 87.15 would develop into the third falling leg of the whole correction from 147.27 and hence, we'd anticipate an eventual break of 33.2 low in the long term as such correction extends.....Nymex Crude Oil Continuous Contract 4 Hours Chart.
Crude oil prices fell hard Friday after a key barometer of the economy showed that U.S. companies remain reluctant to hire, dampening prospects that a rebounding economy mean more oil and gasoline demand. The nation's payrolls added 431,000 jobs last month, almost all of them from temporary census jobs. The unemployment rate inched down to 9.7 percent. Private companies added just 41,000 jobs, compared with 218,000 in April, and well below analysts' forecasts.
Stock markets dropped with the weaker than expected private sector hiring picture, and that pulled down oil prices as well. The Dow Jones Industrial Average, the NASDAQ and the S&P 500 were all down about 2 percent in late morning trading. Meanwhile, retail gasoline prices rose Friday for the first time in nearly a month, though analysts think pump prices for June are likely to continue falling, albeit at a slower pace.
Benchmark crude for July delivery dropped $2.38 at $72.23 per barrel in trading on the New York Mercantile Exchange. Earlier in the session, it climbed as high as $75.42. The contract rose $1.75 to settle at $74.61 on Thursday. "This jobs report makes it look like we're not going to see a summer boom," said Mike Lynch of Strategic Energy and Economic Research.....Read the entire article.
Crude oil closed lower on Friday as it consolidated some of the rally off May's low. The low range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term. Closes above the 20 day moving average crossing at 74.16 are needed to confirm that a short term low has been posted. If July renews the decline off May's high, last July's low crossing at 66.11 is the next downside target. First resistance is the 20 day moving average crossing at 74.16. Second resistance is last Friday's high crossing at 75.72. First support is today's low crossing at 70.79. Second support is last Tuesday's low crossing at 67.15.
Natural gas closed higher on Friday as it extends Thursday's breakout above the upper boundary of the April-May trading range crossing at 4.433. The mid range close sets the stage for a steady opening on Monday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. If July extends this week's rally, the 50% retracement level of the November-May decline crossing at 5.151 is the next upside target. Closes below the 10 day moving average crossing at 4.326 would confirm that a short term top has been posted. First resistance is today's high crossing at 4.977. Second resistance is the 50% retracement level of the November-May decline crossing at 5.151. First support is the 10 day moving average crossing at 4.326. Second support is Wednesday's low crossing at 4.217.
The U.S. Dollar closed higher on Friday breaking out to the topside of the consolidation pattern of the past two weeks. The high range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are turning bullish signaling that sideways to higher prices possible near term. If June extends this year's rally, the March 2009 high on the weekly continuation chart crossing at 89.71 is the next upside target. Closes below the reaction low crossing at 85.33 are needed to confirm that a short term top has been posted. First resistance is today's high crossing at 88.33. Second resistance is weekly resistance crossing at 89.71. First support is the 20 day moving average crossing at 86.30. Second support is the reaction low crossing at 85.33.
Gold closed higher on Friday and the high range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near term. If August extends this week's rally, May's high crossing at 1251.40 is the next upside target. Closes below today's low crossing at 1198.10 would confirm that a short term top has been posted. First resistance is Tuesday's high crossing at 1230.60. Second resistance is May's high crossing at 1251.40. First support is today's low crossing at 1198.10. Second support is the reaction low crossing at 1168.00.
All right so you are mad at BP so why not go out and try to cut into their profits buy not buying their gasoline. Well it sounds good, but the problem is that if you want to get back at BP that is not the way to do it. The truth is BP is not in the retail gas business and the other truth is all you will hurt by boycotting them is the people that have nothing to do with the spill. A BP boycott is an exercise in futility.People are angry and they want to lash out but a boycott won't hurt BP.
The owners of BP gas stations just bought the brand name and are in many cases hard working taxpaying citizens that are basically trying to make a living in a business where profit margins are already thin and rely heavily on the sale of cold drinks, coffee and hot dogs. They too are the victims of BP’s errors and are probably even angrier at BP than you are. Boycotting BP branded service stations to get back at and hurt BP will have about the same impact on BP as if you decided to boycott Dunkin Donuts or McDonalds or CNBC. On second thought, maybe boycotting CNBC might be a good way to express your anger.
You know keeping things like that bottled up like that might not be good for your health. And of course watching the Fox Business Network is a good way to feel better.Back in 2007 BP sold all of its U.S. convenience retail units of its company owned and company operated convenience stores. The majority of sites were sold to franchisees and some to dealers and large distributors (jobbers). While the franchises are required to market BP.....Read the entire article.
Crude oil is still staying in tight range below 75.72 and intraday bias remains neutral. On the downside, break of 71.23 minor support will indicate that rebound from 64.23 is finished and will flip intraday bias back to the downside for retesting this low first. On the upside, above 75.72 will bring another rise, but after all, upside should be limited by 61.8% retracement of 87.15 to 64.23 at 78.39 and bring fall resumption.
In the bigger picture, prior break of 68.59/69.50 support zone affirms our view that whole medium term rebound from 33.2 has completed at 87.15 already, just ahead of 50% retracement of 147.27 to 33.2 at 90.24. Further decline should be seen to 50% retracement of 33.2 to 87.15 at 60.18 at least. Also, as rebound from 33.2 is viewed as as a correction to the whole correction that started at 2008 at 147.27, we'd anticipate a break of 33.2 low in the longer term. On the upside, break of resistance at 78 level is needed to be indicate that fall from 87.15 is completed. Otherwise, we'll stay bearish.....Nymex Crude Oil Continuous Contract 4 Hours Chart.
Crude oil fell for the first day in three on concern growth will slow in China, cutting fuel demand in the world’s second largest energy user. Oil gave up some of yesterday’s 2.4 percent gain on speculation Chinese demand will slow as policymakers trim economic stimulus after the $1.4 trillion lending binge that revived growth in 2009. Crude supplies at Cushing, Oklahoma, where New York traded West Texas Intermediate oil is delivered, rose last week, the Energy Information Administration said.
“The mood is still cautious,” said Toby Hassall, a commodity analyst at CWA Global Markets Pty in Sydney. “The numbers from the EIA were not unexpected in terms of the seasonal pattern. There is still caution in the marketplace.” Crude oil for July delivery dropped as much as 42 cents, or 0.6 percent, to $74.19 a barrel, in electronic trading on the New York Mercantile Exchange. It was at $74.31 at 10:33 a.m. Singapore time. Yesterday, the contract rose $1.75 to settle at $74.61. Futures are poised for a 0.4 percent gain for the week, the second consecutive weekly increase.
“Sentiment is still very fragile,” David Moore, a commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney, said by telephone today. “Inventories are still high. There are some signs of improvement but it’s certainly not a tight market at this stage”....Read the entire article.
