New Video: Is it Time to Buy Gold?

It would appear that the euphoria over gold has quickly diminished and many of gold's greatest proponents, who were calling for gold to go over $2,000 an ounce, appear to be disheartened and shell shocked by the recent sharp downturn in gold.

There's an old adage in trading and it goes like this, "they slide faster than they glide." This is true of all markets and what it means is they go down faster than they go up.

In our new video on gold, we share with you some of the thoughts we have right now on this market. We could be looking at some great buying opportunities if just a few components fall into place.

As always there is no charge and no registration required to watch this video.

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Crude Oil and Natural Gas Market Commentary For Tuesday Morning

Crude oil was lower due to profit taking overnight as it consolidates above the 10 day moving average crossing at 76.02. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term.

If August extends this month's rally, the reaction high crossing at 79.38 is the next upside target. Closes below last Tuesday's low crossing at 74.25 would temper the near term friendly outlook.

First resistance is last Wednesday's high crossing at 78.15
Second resistance is the reaction high crossing at 79.38

Crude oil's pivot point for Tuesday morning is 76.83

First support is last Tuesday's low crossing at 74.25
Second support is the reaction low crossing at 71.09

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Natural gas was lower overnight as it consolidates above the 10 day moving average crossing at 4.451. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term.

Closes above the 20 day moving average crossing at 4.599 would confirm that a short term low has been posted. If August renews the decline off June's high, the reaction low crossing at 4.285 is the next downside target.

First resistance is the 20 day moving average crossing at 4.599
Second resistance is the reaction high crossing at 4.923

Natural gas pivot point for Tuesday morning is 4.506

First support is last Tuesday's low crossing at 4.334
Second support is the reaction low crossing at 4.285



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Successful Investing and Trading Boils Down to Predictability

Successful investing and trading boils down to predictability. There are many markets that are predictable for short and long periods of time, but it’s difficult to know how long such predictability will last.

Many would say that BP plc (BP)’s continued decline in the weeks and months after the oil spill was predictable, but then again, many were wrong with their immediate and “confident” doomsday predictions, so far, as they predicted the stock would continue sliding into single digits…totally missing the near 40% bounce off the lows in recent days.

The same kind of “confident” predictions were made about Greece and the euro sliding into oblivion and yet both have bounce substantially as it looks like the doomsday predictors were wrong…so far.

We don’t even need to go into these panic/disaster situations, a perfect example of how difficult predictability is Intel Corporation (INTC)’s blow out earnings the other night and how the stock was up big-time afterhours which led overnight futures to surge with many pundits calling for a major technology, not to mention overall stock market, rally to take place…no dice…never happened....INTC opened up huge then gradually down trended all day, their superior earnings seemingly already priced in.

Long story short: “confident” financial market prediction is for suckers.

There are far too many variables floating around for the news, let alone investors and traders, to ever be able to grasp and analyze everything well enough to make any kind of supremely confident predictions.

But that’s exactly why penny stocks should be considered as a predictable market. Let me explain...

This overly simplistic, hugely manipulated, much despised market niche is everything the rest of the financial markets are not: easily predictable.

Unlike forex, ETFs, futures, there are no hugely intelligent people working around the clock, considering every single potential profit angle and using complex algorithms to test out the reliability of various data sets and chart patterns.

Penny Stocks are only traded , promoted, manipulated and invested in by the dumbest, most greedy people in the world.

Sometimes Penny stock companies are either fraudulent or incompetent or both with short and longterm statistics proving that more than 99% of them utterly fail in every conceivable way.

In short, the players and the companies are predictable which is why I specialize in this underappreciated (thankfully) niche and why it’s not just possible/probable for me to earn index and everyone else crushing returns, it’s possible/probable for me to be able to teach you too….this ain’t rocket science folks.

Please do learn from this short video lesson series I’ve put together.

Watch Successful Investing and Trading Boils Down to Predictability



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Crude Oil Rises for a Second Day on Optimism Fuel Demand Will Increase

Crude oil rose for a second day in New York on optimism that China’s expanding economy and a forecast that U.S. crude supplies declined last week will show signs of improving fuel demand.
Oil gained as China’s stocks advanced for a second day as rising domestic consumption boosted the earnings of automakers. U.S. crude inventories probably dropped in the seven days ended July 16, the fourth consecutive week of declines, a Bloomberg News survey showed before a Department of Energy report tomorrow.

“China’s upside really is its restocking ability and its underlying economic growth, I can’t see too much weakness in that market,” said Mark Pervan, a senior commodity strategist at Australia & New Zealand Banking Group Ltd. in Melbourne. Crude oil for August delivery gained as much as 37 cents, or 0.5 percent, to $76.91 a barrel in electronic trading on the New York Mercantile Exchange, and was at $76.80 at 1:59 p.m. Singapore time. Yesterday, it rose 53 cents, or 0.7 percent, to $76.54. The August contract expires today.

The more active September contract increased 22 cents, or 0.3 percent, to $77.12 a barrel. Futures have declined 3.4 percent this year. The dollar was at $1.2972 per euro at 1:46 p.m. Singapore time from 1.2942 in New York yesterday. A weaker dollar increases the investment appeal of commodities like oil. The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, rose 43.85, or 1.8 percent, to 2,519.28 as of 1:19 p.m. local time, set for the highest since June 28.....Read the entire article.

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Crude Oil Closes and Consolidates Above 20 Day Moving Average

Crude oil closed higher on Monday as it consolidates above the 20 day moving average crossing at 75.95. The mid-range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term. If August extends the rally off this month's low, the reaction high crossing at 79.38 is the next upside target. Closes below last Tuesday's low crossing at 74.25 would temper the near term friendly outlook. First resistance is last Wednesday's high crossing at 78.15. Second resistance is the reaction high crossing at 79.38. First support is last Tuesday's low crossing at 74.25. Second support is the reaction low crossing at 71.09.

Natural gas closed lower on Monday but remains above the 10 day moving average crossing at 4.470. The mid-range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI are turning bullish signaling that sideways to higher prices are possible near term. Closes above the 20 day moving average crossing at 4.620 are needed to confirm that a short term low has been posted. If August resumes the decline off June's high, the reaction low crossing at 4.108 is the next downside target. First resistance is the 20 day moving average crossing at 4.620. Second resistance is the reaction high crossing at 4.923. First support is last Thursday's low crossing at 4.288. Second support is the reaction low crossing at 4.108.

The U.S. Dollar closed higher due to short covering on Monday as it consolidates some of the decline off June's high. The mid-range close sets the stage for a steady opening on Tuesday. 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 84.68 are needed to confirm that a short term low has been posted. First resistance is the 10 day moving average high crossing at 83.65. Second resistance is the 20 day moving average crossing at 84.68. First support is last Friday's low crossing at 82.25. Second support is the 50% retracement level of the November-June rally crossing at 82.15.

Gold closed lower on Monday and below the 38% retracement level of this year's rally crossing at 1183.90. The low range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are diverging but turning bearish again signaling that sideways to lower prices are possible near term. If August extends the decline off June's high, the reaction low crossing at 1168.00 is the next downside target. Closes above the 20 day moving average crossing at 1217.90 are needed to confirm that a low has been posted. First resistance is the 10 day moving average crossing at 1199.80. Second resistance is the 20 day moving average crossing at 1217.90. First support is today's low crossing at 1176.90. Second support is the reaction low crossing at 1168.00.

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Phil Flynn: When Irish Eyes Are Crying

A downgrade of Irish debt, an oil spill in China and two storm systems down in the Atlantic that bear watching has oil being pulled in different directions. The tug and pull between bearish and bullish forces has oil bouncing in both directions. Now with a whole plate of earnings ahead of us, the dollar and the stock market will be our guide unless of course things get nasty weather wise down south. Overnight Moody's Investors Service cut Ireland's sovereign debt rating to Aa2 from Aa1because of what they say is the government's "gradual but significant loss of financial strength."

Moody says that Ireland’s weakening debt affordability, lower economic growth prospects due to the severe downturn in the banking and real estate sectors, as well as liabilities from the bailout of the banking sector all contributed to the downgrade. At first oil broke on this news as it was feared that this downgrade might hit Europe and what is perceived as Euro Zone stability. Yet oil came back as Moody's at the same time lifted the ratings outlook on Irish government debt to stable from negative and said that the risks are now evenly balanced at the new lower rating standard.

Besides we all knew that Ireland was in danger of a downgrade in the first place. Don’t cry over spilled milk but I guess you can cry over spilled oil. The latest oil spill is in China.....Read the entire article.

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New Video: Is the Euro on Shaky Ground?

In this short video we take an in depth look at the euro and its relationship to the US dollar. The recent sharp rally in the euro, up from the 1.19 level, may be coming to an end.

We look at several indicators that are close to confirming that this market may be set to head lower.

As always our videos are free to watch and there is no need for registration.

Watch Is the Euro on Shaky Ground?


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Crude Oil and Natural Gas Technical Outlook For Monday Morning

Crude oil was lower due to profit taking overnight as it consolidates above the 10 day moving average crossing at 75.53. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term.

If August extends this month's rally, the reaction high crossing at 79.38 is the next upside target. Closes below last Tuesday's low crossing at 74.25 would temper the near term friendly outlook.

First resistance is last Wednesday's high crossing at 78.15
Second resistance is the reaction high crossing at 79.38

Crude oil's pivot point for Monday morning is 76.14

First support is last Tuesday's low crossing at 74.25
Second support is the reaction low crossing at 71.09

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Natural gas was higher overnight as it consolidates above the 10 day moving average crossing at 4.474. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term.

Closes above the 20 day moving average crossing at 4.621 would confirm that a short term low has been posted. If August renews the decline off June's high, the reaction low crossing at 4.285 is the next downside target.

First resistance is the 20 day moving average crossing at 4.621
Second resistance is the reaction high crossing at 4.923

Natural gas pivot point for Monday morning is 4.550

First support is last Tuesday's low crossing at 4.334
Second support is the reaction low crossing at 4.285

New Video: How to Take Money and Emotion Out of The Gold Market

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This Weeks Gold, Crude Oil and SP500 Trading Patterns

It was an interesting options expiration week for equities that’s for sure. We saw some very choppy price action with large waves of buying and selling as the bulls and bears fought for control.

Both Gold and Oil closed lower for the week which is not a good sign considering the US Dollar dropped like a rock along with them. Below are a few of my charts

GLD – Gold ETF Price Action

Gold continues to pull back from the June highs. It looks as though it could form an ABC retrace pattern if the July 7th low is broken. If $1085 is broken we should see gold drop to $1065-75 level. On the GLD etf that would be around the $112.50 – $113.50 level. That should shake out the majority of weak positions and start to rally towards the $1250/60 level.

Crude Oil – USO Oil Fund

This is a weekly chart of oil which clearly shows how selling volume has risen and the trend since 2009 has gone up, sideways and is now heading back down. The bear flag forming on this weekly chart looks about ready for another leg down. Once that occurs we could see a test of the 2009 lows.

Using some "inter market" analysis crude oil tends to move in the opposite direction of the US Dollar. From a quick glance at the dollar chart is looks about ready to bounce which will send oil sharply lower. It will be interesting to see how this unfolds over the next 2-3 weeks.

SP500 – SPY Index Fund

Friday we saw some the SP500 sell off on heavy volume after testing its 50 and 200 day moving averages which are key levels for trading and investors to take profits or add to their short positions in hope for another multi day sell off.

That being said, there is still a good change of higher prices and for all we know this could be the start of another multi month rally. While I am more inclined for us to play the down side this week I will not have a problem taking a long position if we start to see the market internals and breadth improve alone with bullish price action. I monitor the 60, 30 and 10 minute charts which allow me to get a feel for the overall short term trend and strength.

Weekend Trading Conclusion:

Overall it looks like we could have a couple more days of weakness for stocks and commodities. The US Dollar is very much oversold and as of this writing it looks like its starting a small bounce. A rising dollar tends to put downward pressure on gold and oil along with the large multi national companies.

Equities sold off Friday with a slow grind down from 9:30 -4pm never putting in any type of bounce when looking at the 60 minute chart. The SP500 and other indexes are way over sold after Friday and I am expecting some follow through Monday as investors review the charts over the weekend and see what happened on Friday. That should cause another wave of selling in the morning as traders panic out of positions.

It’s going to be an exciting week for sure!

If you would like to receive Chris Vermeulen's trading analysis and trade alerts be sure to checkout The Gold And Oil Guy .Com.


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Crude Oil Drops a Fourth Day Amid Concern Slow Recovery Will Hurt Demand

Crude oil declined for a fourth day in New York after confidence among U.S. consumers slumped, adding to concerns a recovery in fuel demand may falter in the biggest energy consuming nation. Oil dropped after the Thomson Reuters/University of Michigan preliminary consumer sentiment index for July fell to 66.5 from 76 in June, the lowest level since August. The gauge was projected to fall to 74, according to a survey of economists by Bloomberg News.

Crude oil for August delivery dropped as much as 51 cents, or 0.7 percent, to $75.50 on the New York Mercantile Exchange. It was at $75.74 at 8:27 a.m. Sydney time. The contract fell 61 cents to $76.01 on July 16. Futures have declined 8.2 percent since the start of the year. U.S. equities dropped on July 16 after the slump in consumer confidence and lower than estimated revenue at companies from Bank of America Corp. to General Electric Co. The Dow Jones Industrial Average declined 2.5 percent and the Standard & Poor’s 500 Index slipped 2.9 percent.

The Federal Reserve Bank of New York reported last week that its general economic index fell to 5.1 in July from 19.6 the prior month. The Federal Reserve Bank of Philadelphia’s general economic index declined to 5.1 this month, the lowest level since August 2009, from 8 in June. Brent crude oil for September settlement fell 72 cents, or 0.9 percent on July 16, to end the session at $75.37 on the London-based ICE Futures Europe exchange.

Reporter Mark Shenk can be reached at mshenk1@bloomberg.net Ben Sharples at bsharples@bloomberg.net


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