Commodities Commentary For Friday Evening

Crude oil closed higher on Friday as it extends this week's rally. The high range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI have turned bullish signaling that sideways to higher prices are possible near term. Closes above the 20 day moving average crossing at 76.19 are needed to confirm that a short term low has been posted. If August resumes last week's decline, the reaction low crossing at 70.93 is the next downside target. First resistance is today's high crossing at 76.48. Second resistance is the reaction high crossing at 79.38. First support is Tuesday's low crossing at 71.09. Second support is the reaction low crossing at 70.93.

Natural gas closed slightly higher due to short covering on Friday and consolidated some of the decline off June's high. The mid-range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI remain bearish signaling that additional weakness is possible near term. If August extends the aforementioned decline, the reaction low crossing at 4.285 is the next downside target. Closes above the 20 day moving average crossing at 4.808 are needed to confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 4.640. Second resistance is the 20 day moving average crossing at 5.808. First support is today's low crossing at 4.339. Second support is the reaction low crossing at 4.285.

The U.S. Dollar closed higher due to short covering on Friday as it consolidated some of the decline off June's high. The high range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term. If September extends the aforementioned decline, the 50% retracement level of the November-June rally crossing at 82.15 is the next downside target. Closes above the 20 day moving average crossing at 85.57 are needed to confirm that a short term low has been posted. First resistance is the 10 day moving average high crossing at 84.96. Second resistance is the 20 day moving average crossing at 85.57. First support is today's low crossing at 83.83. Second support is the 50% retracement level of the November-June rally crossing at 82.15.

Gold closed higher due to short covering on Friday as it consolidates some of the decline off June's high. The high range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term. If August extends the aforementioned decline, the 38% retracement level of this year's rally crossing at 1183.90 is the next downside target. Closes above the 20 day moving average crossing at 1229.20 would signal that a short term low has been posted. First resistance is the 10 day moving average crossing at 1219.70. Second resistance is the 20 day moving average crossing at 1229.20. First support is Wednesday's low crossing at 1185.00. Second support is the 38% retracement level of this year's rally crossing at 1183.90.

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Phil Flynn: Going Coastal

Darn, I was watching the wrong coast. The Energy Information Agency showed a big 5 million barrel drawdown in crude supply due to hurricane activity. The problem was that we were focused on the wrong hurricane. Or should I say hurricanes? All week oil traders watched with a mix of anticipation, angst and fear about the path of Hurricane Alex and its potential impact on oil operations and oil imports. Yet despite the fact that Alex did slow oil imports, it was two West Coast Hurricanes Celia and Darby that actually had more impact on the nations supply.

Normally storms in the West Coast and the Pacific do not catch the imagination of traders especially because the West Coast, while a big oil consumption market, usually does not impact the rest of the nation. The Gulf Coast on the other hand is the part of the country where the oil imports are the largest. Oil from the Gulf can get shipped via pipeline to other parts of the country where in the West Coast its imports feeds just their markets. So many assumed that when we saw that big 5 million barrel crude draw hurricane Alex was the culprit. Yet the truth is that is not the case. Total oil imports in the Gulf Coast actually increased from 5,183 million barrels to 5,529 million barrels.

Yet in the West Coast they dropped from 1,406 million barrels to 1,131 million barrels. A much larger drop and a huge drop if you look at it as a percentage of total West Coast imports. It appears that Category 5 Darby and category 3 Darby played a number on the West Coast import market. A source from the Port of Los Angeles did say that shipping activity was down. So overall, the drop in the West Coast Offset what was pretty darn large import numbers and was a big reason we saw such a large crude oil draw.....Read the entire article.

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Crude Oil Rises as Stocks Climb on Optimism Over Global Economic Recovery

Crude oil rose for a third day as equities gained on optimism that the global economic recovery will accelerate. Oil advanced as much as 1.2 percent as the MSCI World Index headed for its biggest weekly rally in a year. The global economy will grow 4.6 percent in 2010, the biggest expansion since 2007, the International Monetary Fund said on July 7 in revisions to its World Economic Outlook.

“We’re going to be looking at the equities and the dollar for direction here,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. Crude oil for August delivery rose 81 cents, or 1.1 percent, to $76.25 a barrel at 10:46 a.m. on the New York Mercantile Exchange. Futures touched $76.36, the highest intraday price since June 30. Oil is set for a 5.7 percent increase this week, the most since the week ended April 2.

Brent crude for August settlement climbed 89 cents, or 1.2 percent, to $75.60 a barrel on the London based ICE Futures Europe exchange. Oil may rise next week after the IMF upgraded its global economic outlook and as U.S. supplies dropped to a two month low, a Bloomberg News survey showed. Twenty of 38 analysts and traders, or 53 percent, forecast crude will increase through July 16. Ten respondents, or 26 percent, predicted futures will be little changed and eight saw a decrease.

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

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Crude Oil Stochastics-RSI Turn bullish, Is a Bottom in for Oil?

Crude oil was slightly higher overnight as it extends this week's short covering rally. Stochastics and the RSI have turned bullish hinting that a low might be in or is near.

Closes above the 20 day moving average crossing at 76.24 are needed to confirm that a short term low has been posted. If August resumes last week's decline, the reaction low crossing at 70.93 is the next downside target.

First resistance is Thursday's high crossing at 76.00
Second resistance is the 20 day moving average crossing at 76.24

Friday's pivot point for crude oil is 75.27

First support is Tuesday's low crossing at 71.09
Second support is the reaction low crossing at 70.93

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Natural gas was lower overnight as it extends this week's decline. Stochastics and the RSI are becoming oversold but remain bearish signaling that sideways to lower prices are possible near term.

If August extends the decline off June's high, the reaction low crossing at 4.285 is the next downside target. Closes above the 20 day moving average crossing at 4.807 would confirm that a short term low has been posted.

First resistance is the 10 day moving average crossing at 4.637
Second resistance is the 20 day moving average crossing at 4.807

Natural gas pivot point for Friday is 4.458

First support is Thursday's low crossing at 4.355
Second support is the reaction low crossing at 4.285

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New Video: What's Going on in Crude Oil?

We've had a number of requests to do a video on crude oil, so here it is. This market has been largely trapped in a broad trading range with support coming in around $70/barrel and resistance around $80-85/barrel.

In this new video, we show you some of the other factors that could tip this market one way or the other.

As always our videos are free to watch and there is no need to register. We hope you enjoy the video and please feel free to leave a comment and let us know where you think crude oil is headed.


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Are Crude Oil Signals Turning Bullish? Here is Thursday's Numbers

Crude oil was higher due to short covering overnight as it consolidates some of last week's decline. Stochastics and the RSI are oversold but are turning bullish hinting that a low might be in or is near.

Closes above the 20 day moving average crossing at 76.25 are needed to confirm that a short term low has been posted. If August resumes last week's decline, the reaction low crossing at 70.93 is the next downside target.

First resistance is the overnight high crossing at 75.10
Second resistance is the 20 day moving average crossing at 76.25

Thursday's pivot point for crude oil is 73.48

First support is Tuesday's low crossing at 71.09
Second support is the reaction low crossing at 70.93

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Natural gas was slightly higher overnight due to short covering as it consolidates some of Wednesday's decline. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term.

If August renews the decline off June's high, the reaction low crossing at 4.285 is the next downside target. Closes above the 20 day moving average crossing at 4.832 would confirm that a short term low has been posted.

First resistance is the 20 day moving average crossing at 4.832
Second resistance is June's high crossing at 5.249

Natural gas pivot point for Thursday morning is 4.633

First support is last Wednesday's low crossing at 4.477
Second support is the reaction low crossing at 4.285

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Smart Scan Chart Analysis For Crude Oil ETF....USO

Our Smart Scan Chart Analysis for crude oil ETF....USO, continues negative longer term. Look for this market to remain weak. Strong Downtrend with money management stops. A triangle indicates the presence of a very strong trend that is being driven by strong forces and insiders. Based on a pre-defined weighted trend formula for chart analysis, USO scored -90 on a scale from -100 (strong downtrend) to +100 (strong uptrend):



+10.....Last Hour Close Above 5 Hour Moving Average
-15.....New 3 Day Low on Tuesday
-20.....Last Price Below 20 Day Moving Average
-25.....New 3 Week Low, Week Ending July 10th
-30.....New 3 Month Low in May
-90.....Total Score

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Where is Crude Oil and Gold Headed on Thursday?

CNBC's Sharon Epperson discusses the day's activity in the commodities markets, and looks ahead to where oil and gold are likely headed tomorrow.




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Commodities Commentary For Wednesday Evening

Crude oil closed higher due to short covering on Wednesday as it consolidated some of the decline off June's high. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are oversold but are neutral to bearish signaling that sideways to lower prices are possible near term. If August extends last week's decline, the reaction low crossing at 70.93 is the next downside target. Closes above the 20 day moving average crossing at 76.30 would confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 75.28. Second resistance is the 20 day moving average crossing at 76.30. First support is Tuesday's low crossing at 71.09. Second support is the reaction low crossing at 70.93.

Natural gas closed lower on Wednesday and the low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are neutral to bullish hinting that a short term low might be in or is near. Closes above the 20 day moving average crossing at 4.841 are needed to confirm that a short term low has been posted. If August resumes last week's decline, the reaction low crossing at 4.285 is the next downside target. First resistance is the 20 day moving average crossing at 4.841. Second resistance is June's high crossing at 5.249. First support is last Wednesday's low crossing at 4.477. Second support is the reaction low crossing at 4.285.

The U.S. Dollar closed lower on Wednesday as it extends the decline off June's high. The low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are oversold but remain bearish signaling that sideways to lower prices are possible near term. If September extends the aforementioned decline, the 38% retracement level of the November-June rally crossing at 83.83 is the next downside target. Closes above the 20 day moving average crossing at 85.94 are needed to confirm that a short term low has been posted. First resistance is the 10 day moving average high crossing at 85.30. Second resistance is the 20 day moving average crossing at 85.94. First support is Tuesday's low crossing at 84.04. Second support is the 38% retracement level of the November-June rally crossing at 83.83.

Gold closed higher due to short covering on Wednesday as it consolidates some of the decline off June's high. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term. If August extends the aforementioned decline, the 38% retracement level of this year's rally crossing at 1183.90 is the next downside target. Closes above the 20 day moving average crossing at 1231.60 would signal that a short term low has been posted. First resistance is the 10 day moving average crossing at 1227.60. Second resistance is last Wednesday's high crossing at 1248.80. First support is today's low crossing at 1185.00. Second support is the 38% retracement level of this year's rally crossing at 1183.90.

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Phil Flynn: They Keep Me Hanging On

Set me free, why don't ya babe. Get out my life, why don't ya babe. Cause you don't really want to buy me, you just keep me hanging' on. You don't really need me but you keep me hanging' on. The oil bulls have got to be asking that question. Why oh why do you keep me hanging on by my finger tips?

Another failed rally after the stocks led oil up it was the oil that led the whole mess down. Now even the most bullish analysts are starting to turn bearish as their bullish fantasies are becoming a nightmare. Of course if they are turning bearish should I be turning bullish? At some point the data is coming home to roost.

A sluggish economic recovery underpinned by a weak employment picture does not bode well for the economic recovery. Oh sure oil got a bounce on the fact that the Institute for Supply Management, (ISM) said its index tracking service oriented was still expanding at 53.8 yet how could that carry the day when it was and below market expectations.

Oil bulls started to ask themselves why is this bullish and starting to dump contracts late in the afternoon. That kind of market action with a failed rally might be the precursor to a total market meltdown.....Read the entire article.


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