The Crude Oil Trader

Thursday, August 12, 2010

Crude Falls Below $77 After U.S. Supplies Increase, Economic Outlook Dims

Crude oil declined for a third day after U.S. jobless claims increased, bolstering concern that economic growth will slow and fuel demand will drop. Oil decreased as much as 2.5 percent as initial jobless claims rose by 2,000 to 484,000 last week, the highest level since February. Yesterday, a government report showed that U.S. gasoline supplies climbed for a seventh week and stockpiles of distillate fuel, a category that includes heating oil and diesel, advanced to the highest level since January 1983.

“The weekly jobless numbers were disastrous and sent the market lower,” said Phil Flynn, vice president of research at PFGBest in Chicago. “The oil market is facing the reality, which is that supplies exceed demand. The only thing that was supporting prices was a false sense of economic security.” Crude oil for September delivery dropped $1.46, or 1.9 percent, to $76.56 a barrel at 10:03 a.m. on the New York Mercantile Exchange. Futures touched $76.05, the lowest level since July 28.

Brent crude oil for September settlement fell $1.52, or 2 percent, to $76.12 a barrel on the London based ICE Futures Europe Exchange. Economists forecast claims would fall to 465,000, according to the median of 42 projections in a Bloomberg News survey. The government revised the prior week’s claims figure up to 482,000 from a previously reported 479,000. The Federal Reserve on Aug. 10 held its benchmark interest rate at a record low and announced it will reinvest principal payments on mortgage holdings into long-term Treasury securities, an effort to bolster economic growth.....Read the entire article.

New Video: How to Spot Winning Trades

Share

New Video: How A Japanese Chart Formation Could DOOM the DOW

It's déjà vu all over again". Is one of Yogi Berra's famous original quotes and the same can be said for the DOW right now.

The weekly chart on the DOW is flashing the same Japanese candlestick signal that it had earlier in April of this year. Back then the DOW dropped from 11,200 to 9,700 in the space of just 10 weeks!

If nothing else watch this video as this could be one of the most important weeks for the DOW and its future. The video runs three minutes. You will find it both interesting and educational from both a Fibonacci and Japanese candlestick point of view.

As always our videos are free to watch and there are no registration requirements needed. Please feel free to leave a comment and let us know what you think of the video and the future of the Dow and the markets in general.

Watch How A Japanese Chart Formation Could DOOM the DOW

Want to trade like Adam? Click here for FREE lessons.

Crude oil was lower overnight and is extends the decline off last week's high. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term.

If September extends the aforementioned decline, the reaction low crossing at 75.90 is the next downside target. Closes above the 10 day moving average crossing at 80.50 would confirm that a short term low has been posted.

First resistance is the 20 day moving average crossing at 79.13
Second resistance is the 10 day moving average crossing at 80.50

Thursday's pivot point for crude oil is 78.57

First support is the overnight low crossing at 76.92
Second support is the reaction low crossing at 75.90

a href="http://tinyurl.com/y9o4shu">The "Super Cycle" in Gold and How It Will Affect Your Pocketbook in 2010

Share

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.

New Video: How To Use Fibonacci Retracements

Share

Wednesday, August 11, 2010

Bears Take Clear Advantage as Crude Oil Closes Below the 20 Day Moving Average

Crude oil closed sharply lower on Wednesday and below the 20 day moving average crossing at 79.10 confirming that a short term top has been posted. The low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are bearish signaling that sideways to lower are possible near term. If September extends today's decline, the reaction low crossing at 75.90 is the next downside target. Closes above the 10 day moving average crossing at 80.59 would temper the near term bearish outlook. First resistance is the 10 day moving average crossing at 80.59. Second resistance is last Wednesday's high crossing at 82.97. First support is today's low crossing at 77.69. Second support is the reaction low crossing at 75.90.

Natural gas closed slightly higher on Wednesday as it consolidates above support marked by July's low crossing at 4.290. The mid-range close sets the stage for a steady 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 decline off last week's high, May's low crossing at 4.140 is the next downside target. Closes above the 20 day moving average crossing at 4.582 would confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 4.582. Second resistance is the reaction high crossing at 4.825. First support is today's low crossing at 4.257. Second support is May's low crossing at 4.140.

The U.S. Dollar closed higher on Wednesday and above the 20 day moving average crossing at 81.93 confirming that a short term bottom has been posted. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are turning bullish signaling that sideways to higher prices are possible near-term. If September extends today's rally, the reaction high crossing at 83.64 is the next upside target. If September renews this summer's decline, the 75% retracement level of the November-June rally crossing at 78.60 is the next downside target. First resistance is today's high crossing at 82.55. Second resistance is the reaction high crossing at 83.64. First support is last Friday's low crossing at 80.17. Second support is the 75% retracement level of the November-June rally crossing at 78.60.

Gold closed higher on Wednesday as it consolidates above the 20 day moving average. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term. If August extends last week's rally, the reaction high crossing at 1220.80 is the next upside target. Closes below the 20 day moving average crossing at 1189.00 would temper the friendly outlook. First resistance is last Friday's high crossing at 1212.10. Second resistance is the reaction high crossing at 1220.80. First support is the 10 day moving average crossing at 1191.60. Second support is the 20 day moving average crossing at 1189.00.

New Video: How To Use Fibonacci Retracements

Share

Phil Flynn: You Don’t Believe We Are On The Eve Of Demand Destruction

Tell me over and over and over again my friend! You don’t belive we are on the eve of demand destruction! The last time I honored the 1965 Barry Maguire classic “Eve of Destruction”, oil was hurling towards $147 a barrel and I said that there is no way that this rapid rise would not cause demand destruction and damage to the economy. What followed was the biggest drop in demand in the history of the global oil markets. Now with concerns of another slowdown in the economy, is it possible that demand could crash again?

Ok it is not only the Fed worried about a slowdown in the economy, it seems that the International Energy Agency is as well. The Fed helped bail out oil bulls to a certain extent when they said they would reinvest principal payments on mortgage assets the central bank holds into U.S. treasuries in an effort to keep historically low borrowing rates historically low. I know it sounds ironic. The Fed is concerned that growth has slowed in recent months and fears that "the pace of economic recovery is likely to be more modest in the near term than had been anticipated.....Read the entire article.

Share

Crude Oil Futures Tumble as Demand Outlook Dims, China Manufacturing Slows

Crude oil fell for a second day on signals that economic growth in the U.S. and China, the world’s biggest energy consuming countries, is slowing. Oil slipped as much as 2.9 percent after China’s industrial output grew by the least in 11 months and the Federal Reserve said the U.S. recovery is decelerating. Futures extended declines after the U.S. Energy Department reported that fuel supplies climbed last week.

“The Chinese economy is showing signs of weakness and the picture here is worsening,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “The economic picture isn’t rosy. The question now is where we will find support as we move south.” Crude oil for September delivery fell $2.10, or 2.6 percent, to $78.15 a barrel at 11:39 a.m. on the New York Mercantile Exchange. Futures touched $77.90, the lowest level since July 30. Brent crude oil for September settlement slipped $1.93, or 2.4 percent, to $77.67 a barrel on the London based ICE Futures Europe Exchange.

China’s year-on-year industrial production growth slowed to 13.4 percent in July, the statistics bureau said in Beijing today. In June, the increase was 13.7 percent. July’s gain was the smallest since August last year after excluding distortions caused by holidays at the start of each year. “The markets are once again responding to negative economic news from China,” said Tom Bentz, a broker at BNP Paribas Commodity Futures Inc. in New York. “Chinese industrial output isn’t growing as fast and the retail sales numbers were disappointing”.....Read the entire article.

Get Started Trading Now….With 10 FREE Trading Lessons

Share

New Video: This Trendline is Crucial Support for the S&P 500

This is going to be a short video, but one we believe is important to all traders and investors.

The video runs two minutes and 18 seconds and shows you one key element that we think can make or break the S&P 500 market.

Please feel free to comment here on our blog with your thoughts on this market.

Want to trade like Adam? Click here for FREE lessons.

As always our videos are free to watch and there are no registration requirements needed.

Every Once in a While, You Find Something Amazing....Check out Trend TV

Share

Crude Oil Daily Technical Outlook Wednesday Morning

Crude oil prices are trading lower early again today. Bulls still have the overall near term technical advantage, but are now fading a bit.

In September crude, look for buy stops to reside just above resistance at 80.00 and then at the overnight high of $80.44. Look for sell stops just below technical support at $79.00 and then at $78.50. Crude oil's pivot point for Wednesday morning is 80.36.

The U.S. dollar index is solidly higher in early trading, on short covering and safe haven buying interest. Bulls have quickly gained fresh upside near term technical momentum. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter term technical resistance at 82.00 and then at 82.25. Shorter term support is seen at 81.50 and then at 81.23.

New Video: How to Spot Winning Trades

Share