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Crude oil was lower due to profit taking overnight as it consolidates some of the rally off July's low. Stochastics and the RSI are overbought and are turning neutral to bullish signaling that a short term top might be in or is near.
Closes below the 20 day moving average crossing at 78.70 would confirm that a short term top has been posted. If September extends the aforementioned rally, the reaction high crossing at 84.50 is the next upside target.
First resistance is Wednesday's high crossing at 82.97
Second resistance is the reaction high crossing at 84.50
Crude oil pivot point for Friday morning is 82.02
First support is the 10 day moving average crossing at 80.09
Second support is the 20 day moving average crossing at 78.70
Crude oil fell for a second day after the number of Americans filing applications for unemployment insurance climbed to a three month high, bolstering concern that the economic recovery is slowing. Oil slipped 0.6 percent after the Labor Department reported that initial jobless claims increased by 19,000 to 479,000 last week, the most since April. A U.S. Energy Department report yesterday showed that crude oil supplies in the Midwest surged to a record as nationwide fuel stockpiles rose.
“The economic data doesn’t bode well for oil demand,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “It’s hard to justify oil near $82 a barrel with the economy struggling.” Crude oil for September delivery declined 46 cents, or 0.6 percent, to settle at $82.01 a barrel on the New York Mercantile Exchange. Futures are up 14 percent from a year ago. Brent crude oil for September settlement fell 59 cents, or 0.7 percent, to end the session at $81.61 a barrel on the London-based ICE Futures Europe exchange.
Economists forecast claims would fall to 455,000, according to the median of 43 projections. Estimates ranged from 444,000 to 470,000. The government revised the prior week’s total to 460,000 from a previously reported 457,000. The country’s jobless rate rose to 9.6 percent last month from 9.5 percent in June, according to a Bloomberg survey before a Labor Department report tomorrow. “We turned lower once the jobs report was released,” said Tom Bentz, a broker at BNP Paribas Commodity Futures Inc. in New York. “There hasn’t been a lot of momentum. We just appear to be giving back some of our recent gains”.....Read the entire article.
Crude oil was lower due to profit taking overnight as it consolidates some of the rally off July's low. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term.
If September extends the aforementioned rally, the reaction high crossing at 84.50 is the next upside target. Closes below the 20 day moving average crossing at 78.45 would confirm that a short term top has been posted.
First resistance is Wednesday's high crossing at 82.97
Second resistance is the reaction high crossing at 84.50
Crude oil's pivot point for Thursday is 82.35
First support is the 10 day moving average crossing at 79.82
Second support is the 20 day moving average crossing at 78.45
Commodities have been shining recently as the US Dollar loses its luster for investors. Also the weakening dollar has helped boost equities as a lower US dollar helps the large multi national companies. This report is a quick follow up from the Weekend report showing what the odds were favoring which was higher gold, oil and sp500. As of today each investment is unfolding as planned, once candle at a time.
GLD – Gold ETF Trading
In my last report I pointed out how gold needed to break through its down trendline, the MACD had to crossover and then we needed to wait for a pullback which ends with a reversal candle to the upside. It seems gold is working its way through that process now.
Today’s Pop & Drop is not bullish price action and I expect we see a couple more down/sideways days before higher prices are reached. There are two bullish ways gold could pullback. First one would be a drop to $115 area with below average volume which could form the right shoulder of a reverse head & shoulders pattern, or we could see prices just fade sideways on light volume for 2-4 days before another up move starts.
USO – Oil Trading Fund
Oil just had a 3 day pop and with today’s doji candle the chart is saying it needs a breather. That also falls inline with the price of the US dollar which should continue higher tomorrow (Thursday Aug 5th) putting downward pressure on crude oil.
SPY – SP500 ETF Trading Signals
SP500 had a nice pop on Monday taking it up to the first key resistance level. The best play would have been to buy last Thursday or Friday when it dropped down to support unfortunately the intraday charts at that time were not that healthy looking.
I am not a fan of trading breakouts because so many of them fail and you end up paying a premium for your position and they can end up going against you very quickly. Rather I focus on trying to pick things up at support or sell them at resistance.
If we see the price pause for another 1-4 days on light volume and hold above the support trendline we could have a great low risk entry point with a stop set just below support. Or we could see a pop then pullback to test the breakout level as which point we can take a long position. This play needs to mature a little more.
Mid-Week Gold, Oil and Index Trading Conclusion:
In short, Gold, Oil and the SP500 look ready for a small pullback or some sideways price action. It will be interesting to see how strong the pullback will be on the SP500. The chart pattern and volume while they favor higher prices at the moment, if the support trendline is breached then selling volume will most likely spike and a sharp decline will occur causing the SP500 to drop approximately 3% all the way down to the $109 area.
Crude oil closed lower due to profit taking on Wednesday as it consolidates some of this week's rally. The mid-range close sets the stage for a steady opening on Thursday. Stochastics and the RSI are overbought but remain bullish signaling that sideways to higher prices are possible near term. If September extends the rally off May's low, the reaction high crossing at 84.50 is the next upside target. Closes below the 20 day moving average crossing at 78.14 would confirm that a short term top has been posted. First resistance is today's high crossing at 82.97. Second resistance is the reaction high crossing at 84.50. First support is the 10 day moving average crossing at 79.54. Second support is the 20 day moving average crossing at 78.14.
Natural gas closed higher due to short covering on Wednesday as it consolidates some of this week's decline. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI have turned bearish signaling that sideways to lower prices are possible near term. Closes below the 20 day moving average crossing at 4.579 are needed to confirm that a short term top has been posted. If September renews the rally off July's low, June's high crossing at 5.282 is the next upside target. First resistance is Monday's high crossing at 5.007. Second resistance is June's high crossing at 5.282. First support is Tuesday's low crossing at 4.625. Second support is the 20 day moving average crossing at 4.579.
The U.S. Dollar 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 are oversold but remain neutral to bearish signaling that additional weakness is possible near term. If September extends the decline off June's high, the 62% retracement level of the November-June rally crossing at 80.47 is the next downside target. Closes above the 20 day moving average crossing at 82.66 are needed to confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 81.85. Second resistance is the 20 day moving average crossing at 82.66. First support is Tuesday's low crossing at 80.56. Second support is the 62% retracement level of the November-June rally crossing at 80.47.
Gold closed higher on Wednesday and above the 20 day moving average crossing at 1189.20 confirming that a short term low has been posted. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. If August extends this week's rally, the reaction high crossing at 1218.80 is the next upside target. Closes below the 10 day moving average crossing at 1179.70 would temper the friendly outlook. First resistance is today's high crossing at 1203.00. Second resistance is the reaction high crossing at 1218.80. First support is the 10 day moving average crossing at 1179.70. Second support is last Wednesday's low crossing at 1155.60.
The Petroleum markets took a bit of a breather after surging the first few days in August on rising speculation that the Fed worried about anemic Job Growth and a less then sustainable rate of economic activity will revisit the nuclear option and print more money to get the economy moving again. The Wall Street Journal added to this speculation by raising the possibility that the Fed may reinvest the cash it receives when its mortgage bond holdings mature and buy new mortgage or Treasury bonds, instead of allowing its portfolio to shrink gradually, as it is was expected to do.
This speculation drove traders back into the “carry trade” as the dollar tanked against other major currencies most notably the Yen as traders viewed the US recovery softer than in other parts of the globe. Yet despite some less than spectacular data the oil market anyway backed off the easing talk and tried to focus on weak demand.....Read the entire article.
Natural gas was higher due to short covering overnight as it consolidates some of this week's decline. Stochastics and the RSI have turned bearish signaling that sideways to lower prices are possible near term.
Closes below the 20 day moving average crossing at 4.576 would confirm that a short term top has been posted. If September renews the rally off July's low, June's high crossing at 5.282 is the next upside target.
First resistance is Monday's high crossing at 5.007
Second resistance is June's high crossing at 5.282
Wednesday's pivot point for natural gas is 4.696
First support is Tuesday's low crossing at 4.625
Second support is the 20 day moving average crossing at 4.576
Crude oil was lower due to profit taking overnight as it consolidates some of the rally off July's low. Stochastics and the RSI are overbought but remain bullish signaling that sideways to higher prices are possible near term.
If September extends the aforementioned rally, the reaction high crossing at 84.50 is the next upside target. Closes below the 20 day moving average crossing at 78.12 would confirm that a short term top has been posted.
First resistance is Tuesday's high crossing at 82.64
Second resistance is the reaction high crossing at 84.50
Crude oil's pivot point for Wednesday morning is 82.10
First support is the 10 day moving average crossing at 79.49
Second support is the 20 day moving average crossing at 78.12
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Crude oil closed higher on Tuesday as it extends the rally off May's low. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. If September extends the rally off May's low, the reaction high crossing at 84.50 is the next upside target. Closes below the 20 day moving average crossing at 77.75 would temper the near term friendly outlook. First resistance is today's high crossing at 82.64. Second resistance is the reaction high crossing at 84.50. First support is the 10 day moving average crossing at 78.94. Second support is the 20 day moving average crossing at 77.75.
Natural gas closed lower on Tuesday and below the 10 day moving average crossing at 46.76 signaling that a short term top might be in or is near. The low range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are overbought and are turning bearish signaling that sideways to lower prices are possible near term. Closes below the 20 day moving average crossing at 4.573 would confirm that a short term top has been posted. If September renews the rally off July's low, June's high crossing at 5.282 is the next upside target. First resistance is Monday's high crossing at 5.007. Second resistance is June's high crossing at 5.282. First support is today's low crossing at 4.625. Second support is the 20-day moving average crossing at 4.573.
The U.S. Dollar closed lower on Tuesday as it extends the decline off June's high. The low range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are oversold but remain bearish signaling that additional weakness is possible near term. If September extends the decline off June's high, the 62% retracement level of the November-June rally crossing at 80.47 is the next downside target. Closes above the 20 day moving average crossing at 82.81 are needed to confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 82.10. Second resistance is the 20 day moving average crossing at 82.81. First support is today's low crossing at 80.56. Second support is the 62% retracement level of the November-June rally crossing at 80.47.
Gold closed higher on Tuesday as it continues to rebound off the 50% retracement level of this year's rally crossing at 1158.30. Stochastics and the RSI have turned bullish hinting that a short term low might be in or is near. Closes above the 20 day moving average crossing at 1189.50 are needed to confirm that a short term low has been posted. If August renews the decline off June's high, the 62% retracement level of the aforementioned decline crossing at 1132.70 is the next downside target. First resistance is the 20 day moving average crossing at 1189.50. Second resistance is Monday's high crossing at 1191.80. First support is last Wednesday's low crossing at 1155.60. Second support is the 62% retracement level of the aforementioned decline crossing at 1132.70.
