Sharon Epperson: Where is Crude Oil and Gold Headed on Tuesday?

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.



Get Your FREE Preview of INO TV

Share

Stock Market and Commodities Commentary For Monday Evening Nov. 22nd

The S&P 500 index closed lower due to profit taking on Monday as it consolidated some of last week's short covering rally. The mid range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI are turning bullish signaling that a short term low might be in or is near. Closes above the 10 day moving average crossing at 1196.94 would temper the near term bearish outlook. If December renews 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. First resistance is the 10 day moving average crossing at 1196.94. Second resistance is this month's high crossing at 1224.50. First support is last 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 lower on Monday but remains above the 50% retracement level of the August-November rally crossing at 81.14. The mid range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices are possible near term. If January extends the decline off last week's high, the 62% retracement level of the August-November rally crossing at 79.24 is the next downside target. Closes above the 20 day moving average crossing at 84.56 are needed to confirm that a short term low has been posted. First resistance is the 20 day moving average crossing at 84.56. Second resistance is this month's high crossing at 89.10. First support is last Wednesday's low crossing at 80.06. Second support is the 62% retracement level of the August-November rally crossing at 79.24.

Natural gas closed higher on Monday as it extends last week's rally. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. If December extends the rally off October's low, the 38% retracement level of the June-October decline crossing at 4.362 is the next upside target. Closes below the reaction low crossing at 3.743 are needed to confirm that a short term top has been posted. First resistance is today's high crossing at 4.293. Second resistance is the 38% retracement level of the June-October decline crossing at 4.362. First support is last Monday's low crossing at 3.710. Second support is the reaction low crossing at 3.500.

Gold closed higher on Monday as it extended the short covering rebound off last week's low. The high range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are turning neutral to bullish hinting that a short term low might be in or is near. Closes above the 10 day moving average crossing at 1369.00 would temper the near term bearish outlook. If December extends the decline off this month's high, the reaction low crossing at 1315.60 is the next downside target. First resistance is the 20 day moving average crossing at 1364.00. Second resistance is the 10 day moving average crossing at 1369.00. First support is last Tuesday's low crossing at 1329.00. Second support is the reaction low crossing at 1315.60.

The U.S. Dollar closed higher on Monday ending a three day correction off last week's high. The high range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are overbought and are turning bearish hinting that a short term top might be in or is near. Closes below the 20 day moving average crossing at 77.87 are needed to confirm that a short term top has been posted. If December renews this month's rally, the 38% retracement level of this year's decline crossing at 80.54 is the next upside target. First resistance is last 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 77.87. Second support is this month's low crossing at 75.24.


Share

There’s No Quick Fix for the Global Economy

From guest blogger Adam Hewison......

Regardless of what others might say, there is no quick fix for the global economy. To illustrate this point, a friend of mine recently sent me a chart which I would like to share with you.

This charts shows that we may be going into a prolonged period of no growth in the overall stock market. The NASDAQ peaked at 5,132.52 on March 10th, 2000. The NASDAQ market is in many ways more important than the DOW, and should be considered more of a leading indicator. If that is truly the case, then we have been in a bear market for the last eight years.

Trading throughout the balance of this decade and into the early part of the next decade is going to be the key to survival and for recovering the profits in your portfolio. We strongly recommend that you approach these markets with some level of expertise and knowledge of technical trading.

The future is going to be the future and we need to take advantage of every moment and prepare ourselves to be the very best we can be in whatever business or endeavor we are pursuing.


Check out a FREE trial of Adam Hewison's trading system.


Share

Bloomberg: Hedge Funds Cut Oil Bets as Ireland, China Sap QE2 Gains

Hedge funds cut bullish bets on oil by the most in almost three months amid speculation fallout from the Irish debt crisis and China’s efforts to curb inflation will slow economic growth, sapping demand for fuel. The funds and other large speculators reduced so called long positions, or wagers on rising prices, by 15 percent in the seven days ended Nov. 16, according to the Commodity Futures Trading Commission’s weekly Commitments of Traders report, released Nov. 19. It was the first drop in four weeks and the largest decline since the seven days ended Aug. 24.

Bets on gains in oil prices climbed to the highest level in at least four years in the week before the Federal Reserve announced it would spend $600 billion buying Treasuries through the second round of so called quantitative easing, or QE2, to keep the economic recovery on track.
Crude rose to a two year high of $87.81 a barrel on Nov. 11 in New York. It has since lost 7.8 percent as Ireland moved closer to a European Union bailout and China, the world’s biggest energy consumer, took steps to curb bank lending.

“The drop from extremely high levels makes perfectly valid sense, given the uncertainty now of QE2 and renewed concern regarding a European banking situation, namely Ireland,” said Kyle Cooper, director of research at IAF Advisors in Houston. “This has led to uneasiness regarding oil demand, and the liquidation occurred in that very large speculative position.” Net long positions dropped by 30,518 futures and options combined to 178,397 the week ended Nov. 16, according to the commission report. These are held by what the CFTC categorizes as managed money, including hedge funds, commodity pools and commodity trading advisers......Read the entire article.



Who does some of the major hedge funds turn to when they need advice?

Share

Dian L. Chu:Natural Gas: Better Days Ahead....in Two Years

Natural gas posted the first weekly increase this month in the week of Nov. 14, on forecasts of colder than normal temperatures in most of the eastern U.S. from Nov. 24 through Nov. 28, which could spur an average 20 percentage rise above the normal heating demand. Natural gas for December delivery down 25 percent this year gained 9.6 percent in one week to settle at $4.164 per Mmbtu on the NYMEX.

However, this temporary seasonal strength does not alter the fact that U.S. gas stockpiles climbed to an unprecedented 3.843 trillion cubic feet in the week ended Nov. 12. A 9.3 percent above the five year average level and 0.3 percent above last year’s level.

As I said before that we are literally swimming in crude oil amid high inventory, but when it comes to natural gas, “drowning” would be a more appropriate description. While crude was hammered by China’s efforts to curb inflation, natural gas has an even bigger problem, nowhere to go, since it is region bound, and not as widely traded.

Worse yet, the latest short term outlook published on Nov.9 by the Dept. of Energy estimates natural gas production will rise in 2010 to the highest level in 37 years. Marketed natural gas production is forecast to increase by 2.5 percent this year, and fall by 1.2 percent in 2011.

However, the drop in 2011 is not because of a decrease in shale gas production, but mostly a result of a 13.5 percent production decline in GOM production from the 2010 drilling moratorium......Read the entire article and see Dian's charts.



Share

Phil Streible: Gold Prices Trade Sideways

Phil Streible, senior market strategist at Lind-Waldock, is expecting flat gold prices for the short holiday trading week.



Gold, Oil & Index ETF Trading Analysis

Share

Stephen Schork: Data Bullish for Economy, But Concerning for Nymex Futures

The last time we discussed the domestic producer price index (PPI) and consumer price index (CPI) we stated that “Consumers aren’t feeling the pain… yet.” The CPI for September was flat, whereas analysts were looking for a 0.1% increase and we were specifically concerned that the CPI of food rose just 0.32%, stating “we do not expect this to last.”

In this vein, the latest data (October) saw the CPI for food rise by 0.70%, more than double the previous month’s rate. Before we drill down further, it is worth pulling back to get the big picture. The total PPI rose by 0.4%, below analyst expectations of a 0.8% increase. At the same time, total CPI rose by 0.2%, slightly below the 0.3% gain expected by analysts. We do not believe it a coincidence that these figures were released on exactly the same day that the dollar peaked at the €0.7413 mark.

Despite the indices coming in below expectations, were traders still concerned about inflation? As written in today’s issue of The Schork Report, we don’t believe so. Rather, the drop in the dollar is likely due to money switching towards the equities markets, consider that the dollar hit a local peak on November 16th and has fallen 1.36% since. In comparison, the S&P 500 Index hit a local bottom on November 16th and has risen 1.67% over the same time......Read the entire article.


How To Trade Market Sentiment

Share

Phil Flynn: Babys It's Cold Outside

It may not be cold yet but the first real blast of winter is coming. How do I know that? I am looking at natural gas prices. Despite record supplies, natural gas has been keeping up as Middle America scrambles through our closets to find gloves and ear muffs. Natural gas prices are rebounding from its sharp selloff now testing the high for the month in anticipations of frosty future. Does this signal that the bottom in natural gas has arrived or is this just a great selling opportunity?

In a normal year in gas you might assume that prices would go higher but since the onslaught of new unconventional gas production from shale, now you cannot be too sure. You see according to the Energy Information Agency natural gas proven reserves (those volumes of oil and natural gas that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions) rose enough not only to replace production, but also to grow by almost 3 percent over 2007.

In contrast, the EIA says that even though discoveries of crude oil rose for the third year in a row, proved reserves of crude oil fell by more than 10 percent. Under Securities and Exchange Commission (SEC) rules for determining reserves that have been in effect since 1982, operators assessed their 2008 reserves based on what they could produce with reasonable certainty at the market price on the last day of the year......Read the entire article.



How To Spot Winning Futures....Watch Video NOW

Share

Oil Prices Higher on Ireland Debt Plan, Overnight Short Covering

Oil prices are higher this morning after European and global financial authorities agreed to save debt latent Ireland and protect Europe's wider financial stability. This short covering overnight consolidated some of this month's decline.

Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term. If January extends the aforementioned decline, the 62% retracement level of the August-November rally crossing at 79.24 is the next downside target. Closes above the 20 day moving average crossing at 84.60 would confirm that a short term low has been posted.

First resistance is the 20 day moving average crossing at 84.60
Second resistance is this month's high crossing at 89.10

Crude oil pivot point for Monday morning is 82.13

First support is last Wednesday's low crossing at 80.65
Second support is the 62% retracement level of the August-November rally crossing at 78.56


Free Weekly Low Risk Stock Picks

Share

Crude Oil Rises as Irish Bailout Plan May Ease Concern Over European Debt

Crude oil rose, rebounding from its biggest weekly loss in three months, amid optimism that an agreement to rescue Ireland’s banks may reduce European sovereign debt concerns. Futures retraced some of last week’s 4 percent slump after Ireland yesterday applied for a bailout from the European Union and the International Monetary Fund to save its banks. The decision pushed the euro to a one week high versus the dollar, boosting the appeal of commodities to investors.

“The euro debt concerns are easing as Ireland has decided to accept the bailout and that will lead to a weaker dollar,” said Serene Lim, a commodity strategist at Australia & New Zealand Banking Group Ltd. in Singapore. “It’s more of the dollar weakening that’s helping to drive oil higher.” The January contract gained as much as 64 cents, or 0.8 percent, to $82.62 a barrel in electronic trading on the New York Mercantile Exchange, and was at $82.50 at 12:25 p.m. Singapore time. It slipped 44 cents, or 0.5 percent, to $81.98 on Nov. 19. Futures are up 3.7 percent this year.

The December contract expired on Nov. 19, down 34 cents, or 0.4 percent, at $81.51 a barrel. Crude fell at the end of last week after China ordered banks to raise reserves in a move that may slow growth and crimp fuel demand in the world’s largest energy consuming country. “The Irish debt situation has been contained for the moment,” said David Taylor, a market analyst at CMC Markets Ltd. in Sydney......Read the entire article.


Here is a preview of our MarketClub Trade Triangle Chart Analysis and Smart Scan technology


Share