Trade ideas, analysis and low risk set ups for commodities, Bitcoin, gold, silver, coffee, the indexes, options and your retirement. We'll help you keep your emotions out of your trading.
Can the global commodity markets shake off the threats of Chinese rate hikes? Well today they are going to try. Still yesterday the oil markets ignored a very bullish oil inventory report after Chinese Premier Wen Jiabao said that he and the state council were drafting measure to address inflation. This led to the belief that interest rates in China may go up dramatically and curtail that oh so precious Chinese oil demand... Not Even a massive drop in US oil supply was enough to deter the market from going lower.
The EIA reported that U.S. commercial crude oil inventories decreased by a whopping 7.3 million barrels from the previous week. At 357.6 million barrels, U.S. crude oil inventories are above the upper limit of the average range for this time of year. Total motor gasoline inventories decreased by 2.7 million barrels last week and are in the upper half of the average range. Both finished gasoline inventories and blending components inventories decreased last week.
Distillate fuel inventories decreased by 1.1 million barrels and are above the upper boundary of the average range for this time of year. Oil Exports and Low imports and refinery maintenance are the reason for the draws. The strikes in France are still taking a toll on our supply. Bloomberg News China International United Petroleum & Chemical Co., the nation’s largest oil trader, plans to boost diesel imports for a second month in December to ease a domestic shortage of the transport fuel.
China International, or Unipec, plans to import 120,000 tons for December delivery, compared with......Read the entire article.
Crude oil was higher due to short covering overnight as it consolidates some of the decline off last week's high. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term.
If December extends the aforementioned decline, the 62% retracement level of the August-November rally crossing at 78.56 is the next downside target. Closes above the 10 day moving average crossing at 85.03 would confirm that a short term low has been posted.
First resistance is the 20 day moving average crossing at 84.03
Second resistance is the 10 day moving average crossing at 85.03
Crude oil pivot point for Thursday is 81.06
First support is Wednesday's low crossing at 80.06
Second support is the 62% retracement level of the August-November rally crossing at 78.56
Crude oil rebounded from a four week low as the growing prospect that Ireland will get a rescue bailout from the European Union stoked gains for stocks and commodities around the world. Crude rose as much as 2.1 percent, snapping four days of declines, after Ireland’s central bank governor said he expects the country to seek a bailout from the European Union and the International Monetary Fund. Yesterday’s Energy Department report showed crude inventories unexpectedly dropped the most since August 2009.
“The situation in Europe looks like it’s going towards a solution,” said Sintje Diek, an analyst with HSH Nordbank in Hamburg. “There will be a rescue for Ireland, and that’s good news for the euro. Fundamentals are on the side of investors; inventories are going down.” Crude for December delivery advanced as much as $1.70 to $82.14 a barrel on the New York Mercantile Exchange. It was at $81.72 at 11:37 a.m. London time. Brent crude for January settlement rose as much as $1.72, or 2.1 percent, to $85 a barrel on the London based ICE Futures Europe exchange.
The New York contract, which expires tomorrow, fell yesterday to $80.44, the lowest settlement since Oct. 19. The more actively traded January future was up $1.31 at $82.35. Crude slumped yesterday amid speculation that China, the world’s biggest energy consuming country, will raise interest rates to cool economic growth. Prices also dropped on concern Europe’s debt crisis is worsening. Oil has fallen 4 percent since last week and is up 2.7 percent this year......Read the entire article.
There have been some major trend changes recently and it looks as though more investments are about to follow. The real question though is… Are You Ready To Take Advantage Of It?
It has been an exciting ride to say the least with the equities and metals bull market and the plummeting dollar. But it looks as though their time is up, or at least for a few weeks. Traders and investors will slowly pull money off the table to lock in gains or cut losses and re-evaluate the overall market condition before stepping back up to the plate and taking another swing.
Below are a few charts showing some possible money making trade ideas in the weeks ahead.
TBT 20+ Treasury Note Inverse Fund
This fund moves inverse to the price of the 20 year T.N’s also known as bonds. Looking at the chart you can see the recent reversal which took place. We had a great entry point shortly after this reversal took place using my low risk setup strategy.
Falling bond prices are considered to have a negative impact on equities because it implies that interest rates may start rising which means more investors will pull money out of stocks and put that money into a safe interest earning investment. You will typically see bonds change direction before equities. That being said the chart below is an inverse fund, so when this bond fund goes up, it means actually indicates bond yields are falling. I will admit these inverse funds really throw my brain for a loop at time… I prefer the good old days, buying long and selling short....so simple and clean....
UUP – US Dollar Index Fund
This fund moves with the dollar and allows equities traders to take advantage of currency trading. This chart below shows a possible trend reversal for the dollar. If the dollar continues to rally then it’s also a good sign that interest rates could be rising in the near future and it also means more downward pressure on equities.
SDS – Inverse SP500 Index Fund
These bear funds make it possible for traders and investors to profit from a falling market using a regular buy and sell strategy. They can also be traded in retirement accounts making them a golden investment for those willing to play a falling market.
This chart moves the same as the SP500 index only flipped. As the SP500 falls this fund rallies.
The strategy we just used to play the recent rally is the same strategy we will use during a bear market, but instead of trading the SPY, we are trading this fund.
It is important to note that while bull market rallies tend to drag out; bear markets typically have faster movements. Fear is much more powerful than greed which is why the stock market drops quicker than it goes up.
GLD – Gold Exchange Traded Fund
Gold also looks to be topping and could actually be starting to form a Head & Shoulders reversal pattern.
Mid-Week Trend Trading Conclusion:
In short, understanding inter-market analysis is crucial for traders/investors to know. Not understanding how they affect one other can be very costly in the long run. Remember that volatility and volume rise together at the end of a trend. You can view the recent volatility index (VIX) to see its price action also. Volatility changes also make for great low risk options trades if options are your thing. Focus on trading with the trend, bounces in a down trend are typically muted or trade sideways making is very difficult to make money buying in a falling stock market.
Get Chris Vermeulen's Daily Pre-Market Trading Analysis Videos, Intraday Updates & Trade Alerts at The Gold And Oil Guy.com
Concerns about global oil demand on Wednesday trumped a U.S. Department of Energy report that stockpiles of oil and gasoline were down last week.
Crude oil for December delivery fell $1.90 to settle at $80.44 Wednesday as traders anticipated China's pending actions to rein in inflation. China is expected to raise interest rates to in an effort to stabilize rising prices, and the country's government on Wednesday emphasized its focus on boosting the availability of oil and other commodities.
The DOE's Energy Information Administration reported Wednesday that U.S. commercial crude oil stocks fell by 2 percent as of November 12, 2010, to 357.6 million barrels. Last week's 7.3 million-barrel decline marked the second straight week of lower oil inventories as reported by the EIA.
December crude oil traded from $80.06 to $82.67 Wednesday.
The EIA also reported that gasoline stocks fell 1.2 percent last week. However, front-month gasoline settled flat at $2.16 a gallon Wednesday. According to the DOE agency, total U.S. gasoline inventories stood at 207.7 million barrels as of November 12.
The gasoline futures price ranged from $2.16 to $2.18 during Wednesday's trading.
Thanks to cooler weather, coupled with speculation that the DOE will report a drop in inventories Thursday, December natural gas settled at $4.03 per thousand cubic feet a .21 cent day on day increase. Natural gas traded from 3.80 to 4.04 Wednesday.
The S&P 500 index closed higher due to short covering on Wednesday as it consolidates some of the decline off last week's high. The mid range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term. If December extends the decline off last week's high, the 25% retracement level of the July-November rally crossing at 1169.37 is the next downside target. Closes above the 10 day moving average crossing at 1203.97 would temper the near term bearish outlook. First resistance is the 20 day moving average crossing at 1193.63. Second resistance is the 10 day moving average crossing at 1203.97. First support is Tuesday's low crossing at 1175.20. Second support is the 25% retracement level of the July-November rally crossing at 1169.37.
Crude oil closed sharply lower on Wednesday and tested the 50% retracement level of the August-November rally crossing at 80.49. 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 prices are possible near term. If December extends the decline off last week's high, the 62% retracement level of the August-November rally crossing at 78.56 is the next downside target. Closes above the 10 day moving average crossing at 85.53 are needed to confirm that a short term low has been posted. First resistance is the 20 day moving average crossing at 83.98. Second resistance is the 10 day moving average crossing at 85.53. First support is today's low crossing at 80.06. Second support is the 62% retracement level of the August-November rally crossing at 78.56.
Natural gas closed higher on Wednesday as it consolidates some of last week's decline. Stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices are possible near term. Closes below the reaction low crossing at 3.743 are needed to confirm that a short term top has been posted. If December renews the rally off October's low, the 38% retracement level of the June-October decline crossing at 4.362 is the next upside target. First resistance is last Wednesday's high crossing at 4.249. Second resistance is the 38% retracement level of the June-October decline crossing at 4.362. First support is Monday's low crossing at 3.710. Second support is the reaction low crossing at 3.500.
Gold closed lower on Wednesday as it extended the decline off last week's high. The low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI remain bearish signaling that sideways to lower prices is possible near term. If December extends the decline off last week's high, the reaction low crossing at 1315.60 is the next downside target. Closes above the 10 day moving average crossing at 1380.30 would temper the near term bearish outlook. First resistance is the 20 day moving average crossing at 1359.90. Second resistance is the 10 day moving average crossing at 1380.30. First support is Tuesday's low crossing at 1329.00. Second support is the reaction low crossing at 1315.60.
The U.S. Dollar closed lower due to profit taking on Wednesday as it consolidates some of this month's rally. The low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term. If December extends this month's rally, the 38% retracement level of this year's decline crossing at 80.54 is the next upside target. Closes below the 20 day moving average crossing at 77.69 are needed to confirm that a short term top has been posted. First resistance is Tuesday's high crossing at 79.59. Second resistance is the 38% retracement level of this year's decline crossing at 80.54. First support is the 20 day moving average crossing at 77.69. Second support is this month's low crossing at 75.24.
Crude oil bulls got slapped everywhere they looked as a rate hike in Europe, weak manufacturing data in the US and growing concerns about Ireland's debt problems slammed commodities across the board. Perhaps the Fed knew that things are not that rosy and they were right to print all of that money.
Now with inflation running wild in China, the market knows that the Chinese are going to have to tap on the breaks, striking a major blow to global oil demand expectations. Over the longer term this is another critical time in this oil market when the price failed to capitalize and follow through on a breakout to new highs. Just 5 days ago oil hit a new 2 year high bring out a chorus of $100 a barrel predictions that many said that we would see by the end of the year.
These calls seem to me to be the same predictions we heard in the beginning of the year as oil hit 8395, a post economic crisis at least until the Dubai crisis sent oil price hurling back down to below $70.00. Then a UAE 10 billion dollar rescue plan and all was well in the oil market. Oil surged and hit a new high of 8715 in May and the $100 a barrel predictions were heard quite loudly.
That was before the Greece debt crisis which brought oil back down to 6424. Then of course it was the EU to the rescue with a massive bailout package and oil recovered slowly back to the eighties before settling back into the low......Read the entire article.
"Our civilization's ever increasing hunger for energy and its fixation on fossil fuels to provide that energy is in the process of imploding on itself as our population grows and its demographics change. Yet we live in a world of tough realities, where an elegant solution simply does not exist." Craig Shields provides a broad survey of the subject, presenting 25 interviews with the widest possible variety of subject matter specialists, each chosen to provide the reader with an accessible and fair minded treatment of a particular issue. The technology, the economics, and the politics of renewables form a fantastically complicated calculus that needs to be thoroughly understood if we are to have relevant, informed discussions on this subject the most important challenge in the history of mankind, the migration to clean and sustainable energy sources.
