Crude Oil Trades Near 11 Week High on Goldman "Crude Too Cheap" Statement

Crude oil traded near an 11 week high in New York as equities rallied around the world and Goldman Sachs Group Inc. said crude prices are too cheap. Oil was at about $79 a barrel before a government report due tomorrow that may show U.S. fuel supplies increased last week. Goldman Sachs said futures prices are “significantly” below the level warranted by “fundamentals,” offering buying opportunities for this year and next.

“We expect an average of $92 next year, so on a longer term horizon prices are too cheap, but not far too cheap,” said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich AG in Vienna. “Crude faces some resistance around $80 as although fundamentals are slowly improving they’re not yet strong enough.” Crude for September delivery was at $79.28 a barrel, up 30 cents, in electronic trading on the New York Mercantile Exchange at 1:23 p.m. London time. Brent crude for September settlement traded at $77.82 a barrel, up 32 cents, on London’s ICE Futures Europe exchange. Futures rose as high as $79.60 a barrel on July 23, the highest intraday price since May 6.

European stocks rose for a sixth day as UBS AG and Deutsche Bank AG reported earnings that beat estimates and the Basel Committee on Banking Supervision softened some of its proposed capital and liquidity rules. The Stoxx Europe 600 Index gained 0.6 percent to 258.65. Goldman Sachs said in a report yesterday that the balance between supply and demand will continue to tighten in the second half of this year as global economic growth boosts demand, returning inventories to “more normal” levels.....Read the entire article.

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Stock Market and Commodities Commentary For Monday Evening

Crude oil closed up $0.01 at $78.99 a barrel today. Prices closed nearer the session high today. Bulls have the slight near term technical advantage. The next near term upside price objective for the bulls is producing a close above major psychological resistance at $80.00 a barrel.

Natural gas closed up 2.7 cents at $4.59 today. Prices closed near the session high today and saw tepid short covering in a bear market. The bears have the overall near term technical advantage. Prices are still in a six week old downtrend on the daily bar chart.

The U.S. stock indexes closed higher and near the session high today in the wake of upbeat economic data in the form of a stronger than expected new home sales report today. The stock index bulls have gained some fresh upside near term technical momentum recently and the indexes today hit fresh multi week highs.

The U.S. dollar index closed down 44 points at 82.18 today. Prices closed near the session low today and hit a fresh three month low. Bears have the near term technical advantage. Prices are in a seven week old downtrend on the daily bar chart.

Gold closed down $4.50 at $1,187.10 today. Prices closed near mid-range today in quieter trading. A weaker U.S. dollar index today did not help the gold bulls. The gold market bulls still have the slight overall near term technical advantage as trading has turned choppy recently. Prices just last month hit a fresh all time record high. However, prices are also in a six week old downtrend on the daily bar chart.

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Phil Flynn: Bye, Bye, Bonnie

With Bonnie behind us and more economic ahead of us the oil market currently is in a state of flux. The market continues to be supported by economic earnings related optimism but at the same time it has to worry about current state of oversupply. Oil and the products remain range bound and will continue to see swings perhaps on both sides of unchanged throughout the day. When the big news of the day is whether or not Tony Heyward will step down or be pushed out of BP has to wonder whether or not the markets are focused on what it should be focused on. The Financial Times reports on another way that Shale Gas production is impacting the world.

The FT says that “International energy groups are set to miss out on billions of dollars of future sales during the next decade as China, their most voracious customer, aggressively develops its own large gas reserves and drastically cuts its imported gas requirements, a new study shows. As a result they have a limited window to export their growing new volumes of gas to China. Industry consultant Wood Mackenzie says China will need only half as much more liquefied natural gas from 2020 onwards than it will require in the next decade and it will need no additional gas transported by pipeline after 2020.....Read the entire article.

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Crude Oil and Natural Gas Market Commentary For Monday Morning

Crude oil was lower due to profit taking overnight as it consolidates some of last Thursday's rally. Stochastics and the RSI are overbought but remain bullish signaling that sideways to higher prices are possible near term.

If September extends this month's rally, the reaction high crossing at 79.97 is the next upside target. Closes below the reaction low crossing at 74.70 would temper the near term friendly outlook.

First resistance is last Friday's high crossing at 79.60
Second resistance is the reaction high crossing at 79.97

Crude oil's pivot point for Monday morning is 78.99

First support is the 10 day moving average crossing at 77.60
Second support is the 20 day moving average crossing at 76.45

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Natural gas was lower overnight as it consolidates some of last Thursday's rally. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term.

Closes above last Thursday's high crossing at 4.669 are needed to confirm that a short term low has been posted while opening the door for a larger degree rally into the end of July. Closes below the reaction low crossing at 4.452 would temper the near term friendly outlook.

First resistance is last Thursday's high crossing at 4.669
Second resistance is the reaction high crossing at 4.945

Natural gas pivot point for Monday morning is 4.599

First support is the reaction low crossing at 4.452
Second support is this month's low crossing at 4.290

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How To Be Positioned for SP500, Gold & Crude Oil This Week

The second half of last week we saw some strong price action in the equities market. The SP500 broke through the 5 and 50 day moving averages closing the week just under key resistance levels. The SP500 futures will find resistance at the June high $1099.25, $1100 which is whole number then at $1103 which is the 200 day moving average. Each of these are clumped together making it really just one solid area which sellers will be waiting to short the market.

The market momentum and internals are looking strong for the equities market overall. With last weeks strong close we have seeing the percentage of stocks closing above their 50 and 200 day moving averages surge from 40% to 68% from the previous week. Stocks closing above their 20 day moving average jumped from 40% to 82% from the previous week. Seeing this type of shift in the market Momentum is generally a bullish indicator.

From a quick glance at the internals it looks as though Monday will trade flat/negative for the session. Reason being is that the NYSE Advance/Decline line is telling us the market is overbought when looking at a short term time frame. I would expect some selling Monday or possibly we get a gap up, then a sell off early in the session while the market digests last weeks strong closing.

Gold
Bullion has been giving mixed signals for while now. It looks like there has been a possible ABC retace, but on the other hand it looks to be forming a stair step pattern lower (series of bear flags). Until we get something more concrete from the charts lets just keep our eye on it for now.

Crude Oil
The past month we have seen oil form a bear flag which generally leads to lower prices. That said oil continues to grind its way higher closing at a key resistance level. This could be a possible double top before heading lower or we could get a breakout and rally this week. I know that does not sound helpful but remember oil is very sensitive to weather (hurricanes), US Dollar and geopolitical events making it much more unpredictable than one may think. That said I am not trading it right now.

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I feel the equities market has some strength behind it. But we must see the SP500 futures contract close strongly above the $1103 area. With the market overbought and trading at resistance I am favoring some early weakness Monday

As for the gold and oil, I am just going to keep an eye on them. I’m just not feeling/seeing the patterns which I find tradable at the moment for a low risk setup.

Quick Trading Tip: I try to always analyze and trade the market the way which has always worked for me. Keeping my emotions in control and filtering out as much news, events and opinions as possible so I can think clearly while I focus on my low risk setups. The past couple months have had big news and events unfolding making it harder for traders to stay focused. It is crucial for traders to step back and clear their heads from all the news, hype and opinions shared across all the mediums and just look at a simple chart analyzing the price, volume and trend.

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Crude Oil Rises to Near 12 Week High as Equities Gain on Economic Optimism

Crude Oil traded near $79 a barrel in New York for a third day as advancing equities in Asia bolstered speculation the global recovery in fuel demand will be sustained. Crude earlier rose as much as 0.4 percent as the MSCI Asia Pacific Index reached a one month high after most European banks passed stress tests aimed at assuring investors. Consumer spending, which accounts for about 70 percent of the U.S. economy, the world’s largest, probably increased last quarter, according to a Bloomberg News survey of economists before a report this week.

“The market is on the way to test $80 and the stock market is one of the factors,” said Ken Hasegawa, a commodity derivatives sales manager at broker Newedge Group in Tokyo. “After the result of the stress tests, we have to continue to monitor the financial markets. Even on Friday, the markets sustained gains.”

Oil for September delivery was at $78.99 a barrel in electronic trading on the New York Mercantile Exchange, up 1 cent, at 1:05 p.m. Singapore time. On July 23, the contract fell 32 cents, or 0.4 percent, to $78.98 after settling at $79.30 on July 22, the highest since May 5. Futures have gained 16 percent in the past year.

The MSCI Asia Pacific Index climbed 0.3 percent to 117.72 as of 1:25 p.m. in Tokyo amid optimism over the health of the global economy. Finance companies were the biggest boost to the index, set for the highest close since June 22.....Read the entire article.

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Crude Oil Weekly Technical Outlook

Crude oil's break of 79.38 resistance indicates that whole rebound from 64.23 is still in progress and has resumed. Further rise will be expected as long as 76.16 support holds towards 80.53 resistance (61.8% projection of 64.23 to 79.37 from 71.09 at 80.48). On the downside, below 76.16 will flip intraday bias back to the downside for 71.09 support. Break there will indicate that rebound from 64.23 is completed.

In the bigger picture, while rise from 64.23 is still in progress, there is no change in the view that it's a correction to fall from 87.15 only. Hence, even in case of further rally, we'd expect strong resistance below 87.15 high and bring reversal. On the downside, break of 71.09 will be the first signal that whole fall from 87.15 is resuming for another low below 64.23 towards 50% retracement of 33.2 to 87.15 at 60.18

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 from 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

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New Video: A Battle Royal in the S&P 500

The battle between the bulls and the bears continues in the S&P 500 with neither side able to gain the upper hand. This choppy trading action will eventually lead to a large move one way or the other. The bulls are betting that we are headed higher and the bears are betting that the economy is going to tank.

In our latest video, we share with you some of the key technical points that are still in play and where the market needs to go in order to break out of the current logjam that it's in.

As always our videos are free to watch and there is no need for registration. Please let us know your thoughts by leaving a comment.


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Crude Oil and Natural Gas Commentary For Friday Morning

Crude oil was lower due to light profit taking overnight as it consolidates some of Thursday's rally. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term.

If September extends this month's rally, the reaction high crossing at 79.97 is the next upside target. Closes below last Tuesday's low crossing at 74.70 would temper the near term friendly outlook.

First resistance is the overnight high crossing at 79.60
Second resistance is the reaction high crossing at 79.97

Crude oil pivot point for Friday is 78.29

First support is the 20 day moving average crossing at 76.50
Second support is last Tuesday's low crossing at 74.70

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Natural gas was slightly lower overnight as it consolidates some of Thursday's rally but remains above broken resistance marked by the 20 day moving average crossing at 4.571. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term.

Closes above Wednesday's high crossing at 4.662 would confirm that a short term low has been posted while opening the door for a larger degree rally into the end of July. Closes below Monday's low crossing at 4.454 would temper the near term friendly outlook.

First resistance is Thursday's high crossing at 4.719
Second resistance is the reaction high crossing at 4.923

Natural gas pivot point for Friday is 4.624

First support is Monday's low crossing at 4.454
Second support is last Tuesday's low crossing at 4.334

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Smart Scan Chart Analysis For Crude Oil ETF - USO

Our Smart Scan Chart Analysis is showing some near term weakness in crude oil ETF, USO. However, this market remains in the confines of a longer term Uptrend. Trade with tight money management stops.
Based on a pre-defined weighted trend formula for chart analysis, USO scored +70 on a scale from -100 (strong downtrend) to +100 (strong uptrend):




+10.....Last Hour Close Above 5 Hour Moving Average
+15.....New 3 Day High on Thursday
+20.....Last Price Above 20 Day Moving Average
+25.....New 3 Week High, Week Ending July 24th
-30.....New 3 Month Low in May
+70.....Total Score

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