Bullish Forces Building in the Energy Commodities

From The Daily Trading Report......

We find it rather amusing to observe how punters/bloggers (call them what you will) are so engrossed with the whole "QE2" thing and how popular it has become to trash the Fed and/or Bernanke, yet beneath their feet, life goes on. I say this because it appears people are more concerned with what Bernanke is doing rather than taking note of what is happening on the commodity front and in particular within the energy group of commodities, that is; crude, coal, uranium, and ethanol. In essence, the energy group has been locked in a trading range since October of last year, but now some 12 months later, there is evidence from a broad based perspective that energy commodities have broken out of their trading ranges. We would not take things too seriously if there was bullish action in one or two energy commodities, but when there is strength from crude, heating oil, diesel, gasoline, bunkers, ethanol, uranium, and coal - well, you better believe that something is happening.

But, is the strength in energy commodities only due to the actions by the Fed to debase the USD? Well, yes, that is what the average analyst/blogger/commentator would have us believe...but has anyone considered what is happening outside the US, and Europe for that matter? From an economic expansion perspective, what is going on in Asia (ex Japan), China, India, South America, Australia? Do you know that over 50% of the world GDP is accounted for by so called emerging markets? OK, to get straight to the point, energy demand is increasing rapidly. What happens in the US and Europe is now of little consequence. OK, that is perhaps an exaggeration, but I hope that you get my point. I think there is a lot more at play here than just the Fed debasing the value of the USD......Read the entire article.


Free Trading Video: Day Trading Made Simple

Share

Crude Oil Daily Technical Outlook For Monday Morning Nov. 8th

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

If December extends last week's rally, the 75% retracement level of May's decline crossing at 88.07 is the next upside target. Closes below the 20 day moving average crossing at 83.10 are needed to confirm that a short term top has been posted.

First resistance is the overnight high crossing at 87.49
Second resistance is the 75% retracement level of May's decline crossing at 88.07

Crude oil pivot point for Monday morning is 86.75

First support is the 10 day moving average crossing at 83.94
Second support is the 20 day moving average crossing at 83.10


Free Weekly Low Risk Stock Picks

Share

Crude Oil Trades Near a Two Year High as U.S. Employment Figures Beat Forecasts

Crude oil traded near a two year high in New York after employment in the U.S. increased more than forecast, signaling a recovery in fuel demand from the world’s biggest crude consuming nation. Futures pared earlier gains above $87 a barrel as the dollar strengthened against the euro, curbing investor demand for commodities. Payrolls climbed by 151,000 workers in October following a revised 41,000 drop the prior month, the Labor Department said Nov. 5. Prices jumped 6.7 percent last week, the most since February.

“Oil is quite positive, the market has taken heart in the unemployment rate,” said Jonathan Barratt, managing director of Commodity Broking Services Pty in Sydney. “Crude has broken through the topside of the range, so you’ve got to look for higher prices.” Crude for December delivery was at $86.90 a barrel, up 5 cents, in electronic trading on the New York Mercantile Exchange at 12:27 p.m. Singapore time. The contract earlier rose as much as 64 cents, or 0.7 percent, to $87.49, the highest since Oct. 9, 2008. Futures are up 10 percent in 2010.

The increase in U.S. payrolls was the first since May and exceeded all estimates from economists surveyed by Bloomberg News. The U.S. jobless rate held at 9.6 percent, where it’s been since August, according to the Labor Department......Read the entire article.


Market Trends Trading Made Easy - Learn How

Share

SPX's Running Correction, Gold's Setup, Crude Oil Explodes!

The financial markets continue to climb the wall of worry on the back of more Fed Quantitative Easing. Those trying to pick a top in this choppy bull market may prove to be correct for a couple hours but over time the shorts continue to get clobbered.

Quantitative easing was enough to turn gold back up and gave oil just enough of a nudge to breakout of its cup and handle pattern explained later.

The past few weeks the number of emails I receive on a daily basis about what individuals should do about short positions they took on their own has growing quickly. Usually when my inbox starts to fill up with traders holding heavy losses trying to pick a top I know something big is about to happen and its not going to be in the favor of the herd (everyone shorting). In the past couple week there have been some great entry points for the broad market whether its to buy the SP500, Dow, NASDAQ or Russell 2K. I focus on trading with the trend and entering on extreme sentiment readings as shown in the chart below.

Extreme Trend Trading Analysis
Below are my main market sentiment indicators for helping to time short term tops and bottoms. That being said I don’t pick short term tops in hopes to profit on the down side. Rather I wait for a extreme sentiment bottom to be put in place, then enter long with the up trend (Buy Low).

Once there is a 1-2% surge in price and sentiment indicators are showing a short term top I like to pull a little money off the table to lock in some profits while still holding a core position (Sell High). This is exactly what I/subscribers have done over the last couple weeks. This is a simple yet highly effective strategy and works just as well in a down trend except I focus on shorting extreme sentiment bounces. Subscribers know what these indicators are as I cover them each week in my daily pre-market trading videos as we prepare for the day ahead.

SPX Running Correction
Since early September the equities market has been on fire. In late September the market was extremely toppy looking and trading at key resistance levels from prior highs convincing a lot of traders to take a short position. But instead of a correction the market surged and has since continued to grind its way up week after week.

This rising choppy price action can be seen two ways:
1. As a rising wedge with a blow off top (Bearish)
2. Or as a Running Consolidation (Bullish)

The running consolidation happens when buyers are abundant picking up more shares on every little dip. Overall looking at the intraday price action you will see market shakeouts as it tries to buck traders out before it continues higher. This choppy looking market action if not read correctly looks extremely bearish to the novice trader and the fact the market is so overbought it easily convinces them to take short positions. This choppy action is just enough to wash the market of weak positions before starting another run up.

All that said, both a blow off rising wedge and a running correction are very bullish patterns for a period of time. Again I cannot state it enough, trade with the trend and the key moving averages.

Gold Shines On The Daily Chart
The gold story is straight forward really… Trend is up, quantitative easing is back in action and that is helping to list gold and silver prices. Key moving averages have turned back up and gold closed at a new high which shows strength.

Golden Rocket
With another round of quantitative easing just starting and gold making another new high last week there is a very good chance gold stocks will rocket higher in the coming 8 months. I have been following Millrock Resources Inc. because of the team involved with this company. A breakout to the upside here could post some exciting gains if you take a look at the chart and see where the majority of volume has traded over the years along with the bullish chart patterns (Cup & Handle/Rising Wedge) with strong confirming volume. From 84 cents to the $3.50 area there should not be many sellers other than traders slowing taking profits on the way up.

Crude Oil Breaks Out Of Cup
Crude oil has been dormant the past few weeks even though the US Dollar has plummeted. But last week’s news on more QE was enough to send oil higher. The surge took oil prices straight to the 2010 highs as expected and blew past my first target of $86.00 per barrel. I figure it will consolidate here for a while until we see if the dollar bottomed last week or is just testing the breakdown level.

Weekend Trading Conclusion:
In short, the market has played out exactly as we planned and all four of our positions are deep in the money. As we all know the market goes in waves in both price and for trade setups. The past couple weeks were great for getting into trades and now the market is running in our direction. It will take a few days for the market to stabilize (pullback or pause) before we could get anther round of trade setups. Keep position sizes small as the market remains overbought and a sharp correction could happen at any time. Until then, keep trading with the trend.

Get Chris Vermeulen's Daily Pre-Market Trading Videos, Daily Updates & Trade Alerts Here at The Gold And Oil Guy.com


Disclaimer: Chris owns shares of SPY and MRO.V
Share

Commodity Corner: Crude Oil, Natural Gas, Gasoline End the Week Higher

The price of a barrel of crude oil continued its ascent for the fifth straight day Friday, settling 36 cents higher at $86.85.

Oil for December delivery, which had received a boost during the week from the U.S. midterm elections and the Federal Reserve's "Quantitative Easing 2" policy to stimulate the economy, got a boost Friday from new U.S. Department of Labor jobs figures. According to the Labor Department, nonfarm payroll private-sector employment increased by 151,000 jobs in October. However, the unemployment rate remained unchanged at 9.6 percent.

Crude oil traded from $85.96 to $87.22 Friday. Compared to Monday's settlement price, it is up 4.7 percent for the week.

December natural gas futures also ended the day higher, settling eight cents higher at $3.94 per thousand cubic feet. Colder weather forecasts have provided a boost to natural gas, countering the effect of high inventories. Friday's gas price, which ranged from $3.85 to $3.95 during trading, marks a 2.9 percent increase for the week.

Despite a steady string of increases throughout the week, gasoline for December delivery ended the day flat at $2.18 a gallon on Friday. Front month gasoline, which peaked at $2.19 and bottomed out at $2.16 during the day's session, finished the week up 4.3 percent.


Free Weekly Low Risk Stock Picks

Share

Oil N'Gold: Crude Oil Weekly Technical Outlook For Saturday Nov. 6th

Crude oil finally broken out of the consolidations from 84.43 and resumed the up trend to as high as 87.43. The close above 87.15 key resistance indicates that medium term rise is resuming. Initial bias remains on the upside this week and further rally should be seen to 100% projection of 64.23 to 82.97 from 70.76 at 89.50 next. On the downside, below 85.96 minor support will turn intraday bias neutral and bring retreat. But break of 79.25 support is needed to signal reversal. Otherwise, outlook will remain bullish.

In the bigger picture, the close above 87.15 key resistance indicates that whole medium term rebound from 33.2 has resumed. Such rise is treated as the second wave of the consolidation pattern that started at 147.27. Further should now be seen towards 50% retracement of 147.27 to 33.2 at 90.24 and possibly further to 61.8% retracement at 103.70. On the downside, break of 64.23 support is needed to confirm that crude oil has topped. Otherwise, we won't turn bearish.

In the long term picture, rebound from 33.2 is not finished yet. But overall view remains unchanged. Crude oil is in a long term consolidation pattern from 147.27, with first wave completed at 33.2, second wave from there unfolding. Current development suggests that a breach of 61.8% retracement at 103.70 is likely. But we'll then start to focus on reversal signal again above 103.70.

Nymex Crude Oil Continuous Contract 4 Hour, Daily, Weekly, Monthly Charts


Stock Research & Trading Alerts From The Gold and Oil Guy

Share

Stock Market and Commodities Commentary For Friday Evening Nov. 5th

The S&P 500 index closed higher on Friday as it extends this fall's rally. The high range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are overbought but remain bullish signaling that sideways to higher prices are possible near term. If December extends the rally off August's low, the 62% retracement level of the 2007-2009 decline crossing at 1234.75 is the next upside target. Closes below the 20 day moving average crossing at 1182.06 are needed to confirm that a short term top has been posted. First resistance is today's high crossing at 1224.20. Second resistance is the 62% retracement level of the 2007-2009 decline crossing at 1234.75. First support is the 10 day moving average crossing at 1191.86. Second support is the 20 day moving average crossing at 1182.06.

Crude oil closed higher on Friday as it extends the rally off August's low. The high range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. If December extends the aforementioned rally, the 75% retracement level of May's decline crossing at 88.07 is the next upside target. Closes below the 20 day moving average crossing at 82.93 would confirm that a short term top has been posted. First resistance is today's high crossing at 87.22. Second resistance is the 75% retracement level of May's decline crossing at 88.07. First support is the 10 day moving average crossing at 83.55. Second support is the 20 day moving average crossing at 82.93.

Natural gas closed higher on Friday as it consolidates some of Monday's decline. Stochastics and the RSI have turned bearish signaling that sideways to lower prices are possible near term. If December renews this year's decline, weekly support crossing at 3.390 is the next downside target. If December extends the rally off October's low, the reaction high crossing at 4.207 is the next upside target. First resistance is Monday's high crossing at 4.187. Second resistance is the reaction high crossing at 4.207. First support is last Monday's low crossing at 3.500. Second support is weekly support crossing at 3.390.

Gold closed higher on Friday and posted another new all time high as it extends this year's rally. The high range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are bullish signaling that sideways to higher prices is possible near term. If December extends this year's rally into uncharted territory, upside targets will now be hard to project. Closes below the reaction low crossing at 1315.60 would confirm that a short term top has been posted. First resistance is today's high crossing at 1398.70. First support is the 10 day moving average crossing at 1352.30. Second support is the reaction low crossing at 1315.60.

The U.S. Dollar closed higher due to short covering on Friday as it consolidates some of this year's decline. The high range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term. If December extends the decline off August's high, the November 2009 low on the weekly continuation chart crossing at 74.21 is the next downside target. Closes above the reaction high crossing at 78.61 are needed to confirm that a short term low has been posted. First resistance is last Wednesday's high crossing at 78.51. Second resistance is the reaction high crossing at 78.61. First support is Wednesday's low crossing at 75.24. Second support is the November 2009 low on the weekly continuation chart crossing at 74.21.


Why is INO TV the Logical Choice?

Share

George Soros Raises InterOil Stake

Soros Fund Management just filed an amended 13G with the SEC regarding their position in InterOil (IOC). Per activity on October 25th, George Soros' hedge fund now shows an 11.9% ownership stake in IOC with 5,257,422 shares. This comes after we just disclosed that Soros boosted stakes in two other positions.

Of this total, 1,200,000 shares are represented by call options. Since the second quarter ended, Soros has increased their position size by 53.5%. Interestingly enough, InterOil just yesterday afternoon announced that they would offer convertible senior notes due 2015 and common shares to raise proceeds of up to $280 million.

InterOil has been somewhat of a controversial stock in the hedge fund world. While Soros has amassed a hefty long position, Whitney Tilson's hedge fund T2 Partners has been an ardent detractor of the company as they are short IOC. Soros has clearly been the winner on this play thus far and we'll have to see what happens in the future.

Courtesy of Google Finance


Stock Research & Trading Alerts - Click Here

Share

Finding Opportunity in Marathon Oil

Stephanie Link explains why Marathon Oil's stock dropped after reporting a good quarter and how she advises.



Chris Vermeulen's Free Trading Analysis & Signals Newsletter

Share

Phil Flynn: I Was Dreaming When I Wrote This

Forgive me if it goes astray, but when I woke up this mornin', could sworn it was judgment day. The sky was all purple, there were bulls running' everywhere. Trying' to run from the destruction, you know they didn't even care. 'Cuz they say the QE2 billion zeros printed party started, oops out of time! So tonight I'm gonna party like it's 1929. I was dreaming' when I wrote this, the markets ran so fast, but commodities are just a party, and parties weren't meant to last, there is danger all around us, my mind says prepare fly, but for now we must enjoy it and party like its 1929. Yeah, everybody's got a printing press and we could all die any day. But before I'll let that happen, I'll dance my life away. So tonight we gonna, we gonna (Tonight I'm gonna party like it's 1929) Say it 1 more time

Two trillion dollars printed. Oops out of time. No, no. So tonight we gonna, we gonna (Tonight I'm gonna party like it's 1929). Let's get this party started! The Fed is coming out so let’s get this party stared! Forget about the Fed taking away the punch bowl, let’s face it they are trying to get everybody drunk and wow what a party! Remember when the Fed thought that irrational exuberance was a bad thing? With QE2 they want to get us woozy and keep us feeling that way. Of course sometimes when you are drunk you kind of forget about the consequences of the hangover when you wake in the morning.

Stocks hit two year high the highest level since Lehman brothers went belly up. Gold hit a record high! Oil is at the highest level since April! Silver soars! Beans trying for the teens! Forget about tomorrow, live for today and just keep drinking and don’t worry about the consequences. Just as long as we don’t have to wake up. Hyper Inflation! Forget about it! Struggling consumers racked with unemployment and food and energy bills! Who cares! How about deflation in......Read the entire article.



Share