Crude Oil Bulls Start 2011 on a Positive Note

We can't deny the run, crude oil gained 15 percent last year and most analyst who called the bull run in oil prices were spot on. But is that it? Can a "V" shaped recovery in oil continue in the face of slowed Chinese manufacturing in December 2010 for the first time since July. The Bloomberg survey of economists shows that China, the world’s biggest energy consumer, will slow to 9 percent this year from 10 percent, that would still be three times the rate in the U.S. and six times Europe’s.

Russia for one is doing it's part to put an end to the run. Reporting oil production numbers not seen since the Soviet era. And while that increase in crude oil production was a mere 2.2% Russian natural gas production spiked a whopping 15% in 2010. Do they have more of that in store for us in 2011? And how will our "friends" in OPEC respond? Regardless of what they say I would not expect any pull back from the cash strapped countries of the now obsolete organization. In fact we expect to see an increase from the.....can we call them an organization?

The 2010 run ended with crude oil inventories dropping 4 weeks in row, the longest drop in more then a year. Does all of this scream out bubble? We suspect the bulls are going to enjoy a warm welcome from the sun tanned returning traders. But we stick by our cautioning tale that the second week of January could bring these oil prices back to earth with higher inventory reports. But we are trading TODAY, and here are the numbers we are going to use......

Crude oil was higher overnight as it extends the rally off August's low. Stochastics and the RSI are diverging but are turning neutral to bullish again signaling that sideways to higher prices are possible near term. If February extends the rally off August's low, May's high crossing at 93.87 is the next upside target. Closes below last Thursday's low crossing at 89.02 would confirm that a short term top has been posted. First resistance is the overnight high crossing at 92.20. Second resistance is May's high crossing at 93.87. First support is the 10 day moving average crossing at 90.80. Second support is last Thursday's low crossing at 89.02. Crude oil pivot point for Monday morning is 90.83.

Natural gas gapped up overnight and was higher as it extends the rally off December's low. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. If February extends the aforementioned rally, December's high crossing at 4.635 is the next upside target. Closes below the 10 day moving average crossing at 4.268 would confirm that a short term top has been posted. First resistance is the overnight high crossing at 4.563. Second resistance is December's high crossing at 4.635. First support is the 20 day moving average crossing at 4.310. Second support is November's low crossing at 4.268. Natural gas pivot point for Monday morning is 4.388.

Gold was slightly lower due to light profit taking overnight as it consolidates some of last week's rally. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term. If March extends last week's rally, December's high crossing at 1432.50 is the next upside target. Closes below the reaction low crossing at 1361.6 would confirm that a short term top has been posted. First resistance is last Friday's high crossing at 1422.00. Second resistance is December's high crossing at 1432.50. First support is the reaction low crossing at 1361.60. Second support is the reaction low crossing at 1352.00. Gold pivot point for Monday morning is 1416.00.


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2011 Crude Oil Price is All About The Double Dip

At this point the future of oil isn't about inventory and current demand. Obviously oil is in the position to trend higher to $100 and higher. What it is really about is do you believe a double dip in the U.S. economy is inevitable. If you listen to the talking heads they seem to think commodity demand in general will move forward even in the face of a double dip. Everyone is on board the bull train. But how quick they forget.

We personally think that if this type of demand increase continues 2011 is shaping up to be a carbon copy of 2008. Remember 2008? Spiking oil and food prices combined with housing prices taking another hit bringing down more banks and financial institutions with them.

All of this could be a distant memory and $93 oil will be called the bull run of 2010. As refinery issues in Canada fade, the Chinese continue to inflate their currency reeling in inflation, end of year low inventory tax advantages disappear and traders come to their senses that none of this was possible without the QE2 printing presses going full speed. This may be no time to short oil but January 15th and a whole new set of rules is right around the corner.

But we are trading TODAY, and here's the numbers we'll be using......


Crude oil was lower due to profit taking overnight as it consolidates some of the rally off November's low. Stochastics and the RSI are diverging but remain neutral to bullish signaling that sideways to higher prices are possible near term. If February extends the rally off November's low, May's high crossing at 93.87 is the next upside target. Closes below the 20 day moving average crossing at 89.63 would confirm that a short term top has been posted. First resistance is Monday's high crossing at 91.07. Second resistance is May's high crossing at 93.87. First support is the 10 day moving average crossing at 90.24. Second support is the 20 day moving average crossing at 89.63. Crude oil pivot point for Thursday morning is 91.77.

Natural gas was higher overnight as it extends the rally off last week's low and is trading above the 20 day moving average crossing at 4.298. Stochastics and the RSI have turned bullish signaling that sideways to higher prices are possible near term. Closes above the 20 day moving average crossing at 4.298 would confirm that a short term low has been posted while opening the door for additional short covering gains into the new year. If February renews this month's decline, November's low crossing at 3.913 is the next downside target. First resistance is the overnight high crossing at 4.343. Second resistance is the reaction high crossing at 4.554. First support is the reaction low crossing at 3.985. Second support is November's low crossing at 3.913. Natural gas pivot point for Thursday morning is 4.271.

Gold was slightly lower due to light profit taking overnight as it consolidates some of this week's rally. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. If March extends this week's rally, December's high crossing at 1432.50 is the next upside target. Closes below the reaction low crossing at 1361.6 would confirm that a short term top has been posted. First resistance is the overnight high crossing at 1415.40. Second resistance is this month's high crossing at 1432.50. First support is the reaction low crossing at 1361.60. Second support is the reaction low crossing at 1352.00. Gold pivot point for Thursday morning is 1410.00.


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Adam Hewison Lays out 5 Market Calls for 2011

As we wind down 2010 it's no surprise that the Monday morning quarterbacks are coming out of the wood work. Everyone pundit, reporter or writer who considers themselves an “expert” comes out of their ivory towers and makes their annual market predictions for the New Year.

It’s time to kiss those predictions goodbye

I can honestly say that I wish I had a crystal ball like these other forecasters, but that’s not quite how the markets work. You see, markets don’t give a “Rats A**” about what forecasters say or what predictions economists make. The market is the only true voice out there. Think about that for a moment. How many predictions do you remember that were even close to being spot on a year in advance? I remember several forecasts for 2010 and most of them were far from accurate.

Does it make any sense to trade on a year end forecast, not knowing what can happen in this crazy world we live in? It doesn’t make any sense to me or to other professional traders who never trade based on year end predictions. So let’s get back to reality and take a look back on 2010 to see what the big trends are showing for 2011.

1. GOLD: Major Trade Triangles Bullish

Let’s start with everyone’s favorite market, gold. Gold is without question the most emotional market in the world. Investors and traders who are involved with this metal are passionate about its future and that can be a bad thing. Let me explain. Back in 1980 gold peaked around $850 an ounce. Had you purchased gold around that time, it would have taken approximately 30 years for gold to get above that level again. Call it the lost 3 decades.

Now the arguments are that the gold market should be trading well above $2,000 and that the central banks and governments are manipulating the price for their own advantage. Don’t believe it. There are also hundreds of other conspiracy theories that seem to pop up for this particular market. Like I said, it is a passionate and emotional market.

Here’s how I’m going to trade gold in 2011. In 2011, I’m going to rely on MarketClub’s “Trade Triangle” technology which has an excellent track record in gold. By taking a methodical approach and not guessing which way the wind is blowing, you have a far greater chance to close out 2011 with a big plus for the year.

I expect the gold trend will carry over from 2010 and then change somewhere along the line. This is the history of this market. One thing that I can be 100% certain of is that gold prices will fluctuate in 2011. That’s a guarantee!

2. CRUDE OIL: Major Trade Triangles Bullish

Next, let’s take a look at a market that impacts everyone’s pocket book, crude oil. Crude oil recently moved over $90 to two year highs and once again shook up excitement in this market. When looking at the fundamental market, we’re running out of oil, production continues to go down, and no new oil fields have been discovered in the last several years. The other fundamental story is that China and India are becoming more affluent and developing a middle class economy which will lead to increased oil consumption to power their newly purchased cars and scooters. This could all be true, however; it really doesn’t change the way you should be looking at the market. Once again, we are going to rely on MarketClub’s Trade Triangle technology, which has done a stellar job identifying trends in this market over the last few years.

So at the moment, the trend in crude oil is on the upside for 2011.

3. US DOLLAR INDEX: Major Trade Triangles Mixed to Negative

The other big market that everyone is talking about is the US dollar. You may or may not remember the doomsday forecasts in December of 2009 for the dollar. Quite the opposite occurred as the dollar enjoyed a spectacular rally for the next six months. That’s the whole point of this report; listen to the markets and ignore the predictions of the so called experts. Again, we will be relying on our Trade Triangle Technology and the technical approach to follow market trends in 2011.

4. GLOBAL STOCK MARKETS: Major Trade Triangles Bullish
I want to talk about the stock market, both in the US and overseas. One of the more interesting portfolios we created in 2010 was MarketClub’s “Global Strategy” portfolio that tracks five different countries. The MarketClub technique using the ETF markets has worked well for our members. We track the following five countries: Brazil, Russia, India, China and Australia. (This portfolio, which is available to all MarketClub members, can be seen here.) We also follow the ETF SPY as it tracks the S&P500. Once again, we use our Trade Triangle Technology to determine the trends in five ETFs.

5. COMMODITY MARKETS: Major Trade Triangles Bullish

Lastly, I want to talk about the commodity markets. You have no doubt heard or have seen that copper prices are at record highs, but you also have other markets that are jumping up and these are all anticipating both strong demand and are now in the beginnings of an inflationary spiral that we envisioned sometime back. Commodities are going to be very important in the future. Traders should be paying close attention to these markets and creating in a new portfolio manager with various commodity portfolios to track these lucrative markets. If you want to see how we have have performed in these markets you may want to take a look at MarketClub’s “World Cup” Portfolio. Since July of 2007, your money would have multiplied 786.16 %by June of 2010. That’s enough to turn $50,000 into $391,580.00 in just three years.

So maybe this is not as exciting or as hyped up as someone saying, “Here are my top five picks for 2011,” but it’s a way to make real money in 2011 and not without having to wing it like so many investors will be doing in the new year.

I think 2011 is going to offer some extraordinary opportunities in the markets listed above. Remember, in every crisis or every boom there are opportunities to make money. It’s when things are dull and boring that it becomes more difficult to produce the type of returns that we are looking for.

So what’s my number one tip for 2011? Watch and trade with the MarketClub’s Trade Triangle technology and ignore the hyped up new year predictions. Here’s wishing you every success in 2011.

Guest blogger Adam Hewison is the Co-founder of MarketClub/INO.com




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Let's Look at 2010 and What's Ahead For Us in 2011

No one can argue that 2010 was a fantastic year for traders. Yes there were some downs, with the economy and all, but trading wise it was outstanding!

I'm sure you've read an article or two that I've posted from Chris Vermeulen, but I have a little more unknown insight into his trading service and it's records...

This is his 2010 members only trading performance......its audited and 100% verified:

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The last 5 closed trades and their results!
SPY 0.9%, Nov 12 - Nov 15
GLD 1.2%, Nov 4 - Nov 12
SPY 3.5%, Oct 27 - Nov 5
TBT 2.4%, Oct 21 - Nov 2
GLD (1.1%), Oct 19 - Oct 21

Second: He and his members currently have three open positions with the following gains.....

Open Position..........65%
Open Position..........28%,
Open Position............9%

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Is Consumer Confidence and Housing Enough to Stop Crude Oil's Run?

No doubt that 2010 was no 2009 when it comes to oil prices with 2010 bringing a mere 14% gain compared to 2009's 78%. Can 2011 continue the run in the face of even worse consumer confidence reports in the U.S. and a larger than expected drop in home values as the S&P/Case-Shiller index of U.S. property values reported a decline of 0.8 percent in October from a year earlier. If anything can bring down the commodity and equity markets in 2011 it's the much feared double dip in the U.S. housing market.

Say it can't happen? Like anything else in life, just follow the money. The smart money. Why are the banks refusing home loans without large cash down payments? Simple, because when issuing a loan it is really the bank that is investing in the home, not the home owner. The lender is only hoping the home owner will pay it off for THEM! Smart money [the banks in this case] know that the homes are not worth the current prices even as low as they are, making a double dip inevitable.

We know what this will do for consumer confidence in the U.S. but will it stop China and India's rapid expansion and continued increase in energy demand? Unlikely, welcome to the new world economy. Here's your trading numbers for Wednesday morning......

Crude oil was lower due to light profit taking overnight. Stochastics and the RSI are diverging but remain neutral to bullish signaling that sideways to higher prices are possible near term. If February extends the rally off November's low, May's high crossing at 93.87 is the next upside target. Closes below the 20 day moving average crossing at 89.45 would confirm that a short term top has been posted. First resistance is Monday's high crossing at 91.07. Second resistance is May's high crossing at 93.87. First support is the 10 day moving average crossing at 90.08. Second support is the 20 day moving average crossing at 89.45. Crude oil pivot point for Wednesday morning is 90.94.

Natural gas was slightly lower overnight as it consolidates some of Tuesday's rally. Stochastics and the RSI are turning bullish signaling that sideways to higher prices are possible near term. Closes above the 20 day moving average crossing at 4.295 are needed to confirm that a short term low has been posted. If February renews this month's decline, November's low crossing at 3.913 is the next downside target. First resistance is the 20 day moving average crossing at 4.295. Second resistance is the reaction high crossing at 4.554. First support is the reaction low crossing at 3.985. Second support is November's low crossing at 3.913. Natural gas pivot point for Wednesday morning is 4.240.

Gold was slightly lower due to light profit taking overnight as it consolidates some of Tuesday's rally. Stochastics and the RSI have turned bullish signaling that sideways to higher prices are possible near term. If March extends Tuesday's rally, this month's high crossing at 1432.50 is the next upside target. Closes below the reaction low crossing at 1361.6 would confirm that a short term top has been posted. First resistance is the overnight high crossing at 1410.00. Second resistance is this month's high crossing at 1432.50. First support is the reaction low crossing at 1361.60. Second support is the reaction low crossing at 1352.00. Gold pivot point for Wednesday morning is 1398.70.


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Free MarketClub Gold Alert!

Tuesday morning MarketClub issued an "enter long" for short term traders with a GREEN Daily “Trade Triangle” @ $1,387.72. Trade Triangles for intermediate and long term traders continue to remain in long positions.


If you are not yet a member of MarketClub see what you are missing with our 30 Day Risk Free trial and receive 3 valuable bonuses just for giving us a try.


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Commodity Traders to China....."Good Start Guys, But Not Enough"

Crude oil and commodity traders seem to be telling China "good start guys, but not enough" as commodity prices appear to be holding up with support of the continued bad weather in Europe and the U.S.

The usual low volume holiday trading is setting up an interesting first week for 2011. Will this "soft landing" in China's pullback be healthy and create sustainable economic growth in China?

The U.S. dollar showed continued weakness for a fourth day, keeping the appeal for commodities going in the U.S. markets. Traders are looking for U.S. oil stockpiles to decrease by 3 million barrels from 340.7 million in the week ended Dec. 24, according to the median estimate of nine analysts surveyed by Bloomberg News. With supplies falling this month by 19 million barrels, or 5.3 percent, the biggest decrease since December 2006.

Let's scrape the ice off of our monitors and trade the numbers given us. Here they are for Tuesday morning......

Crude oil was higher overnight and is poised to extend the rally off November's low. Stochastics and the RSI are diverging but are bullish signaling that sideways to higher prices are possible near term. If February extends the rally off November's low, May's high crossing at 93.87 is the next upside target. Closes below the 20 day moving average crossing at 89.12 would confirm that a short term top has been posted. First resistance is Monday's high crossing at 91.07. Second resistance is May's high crossing at 93.87. First support is the 10 day moving average crossing at 89.85. Second support is the 20 day moving average crossing at 89.12. Crude oil pivot point for Tuesday morning is 90.38.

Natural gas was lower overnight as it extends last week's trading range. Stochastics and the RSI are neutral signaling that sideways trading is possible near term. If February extends this month's decline, November's low crossing at 3.913 is the next downside target. Closes above the 20 day moving average crossing at 4.283 would confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 4.167. Second resistance is the 20 day moving average crossing at 4.283. First support is the reaction low crossing at 3.985. Second support is November's low crossing at 3.913. Natural gas pivot point for Tuesday morning is 4.119.

Gold was higher overnight and has renewed the rally off last week's low. Stochastics and the RSI are turning bullish signaling that sideways to higher prices are possible near term. If March renews this year's rally into uncharted territory, upside targets will be hard to project. Closes below the reaction low crossing at 1361.6 would confirm that a short term top has been posted. First resistance is the reaction high crossing at 1408.90. Second resistance is this month's high crossing at 1432.50. First support is the reaction low crossing at 1361.60. Second support is the reaction low crossing at 1352.00. Gold pivot point for Tuesday morning is 1380.90.


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Who's Your Daddy Energy and Oil Traders?

We knew it was coming, China had already surpassed the U.S. [in some people's eyes] as the largest energy user in the world. But China's "surprise" rate hike over the holiday weekend [niiiice guys] was just a friendly reminder who is in charge of determining the price we pay for energy, commodities, food....really anything in the west and the rest of the world now.

Traders expected a rate rise coming out of China, but the timing caught them off guard. After taking loses early in the Sunday evening session markets recovered as traders expected the rate increases would do little to put a halt to China's appetite for commodities.

The news out of China combined with the last week of 2010 signaling an end to tax break season for refiners in the U.S. has most investors calling a top in crude oil.

While mostly bad news has been coming out of Europe, oil and energy traders have been given some holiday cheer in the form of horrible weather. Worst then normal conditions have energy needs across Europe spiking.

Here's Monday's trading numbers to get your week started......

Crude oil was lower due to light profit taking overnight as it consolidates some of last week's rally. Stochastics and the RSI are diverging but are turning bullish signaling that sideways to higher prices are possible near term. If February extends the rally off November's low, May's high crossing at 93.87 is the next upside target. Closes below the 20 day moving average crossing at 88.89 would confirm that a short term top has been posted. First resistance is the overnight high crossing at 91.07. Second resistance is May's high crossing at 93.87. First support is the 10 day moving average crossing at 89.67. Second support is the 20 day moving average crossing at 88.89. Crude oil pivot point for Monday morning is 90.29.

Natural gas was lower overnight as it extends last week's trading range. Stochastics and the RSI are neutral signaling that sideways trading is possible near term. If February extends this month's decline, November's low crossing at 3.913 is the next downside target. Closes above the 20 day moving average crossing at 4.283 would confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 4.189. Second resistance is the 20 day moving average crossing at 4.283. First support is the reaction low crossing at 3.985. Second support is November's low crossing at 3.913. Natural gas pivot point for Monday morning is 4.17. With a score of -85 our "Smart Scan Chart Analysis" of natural gas etf UNG confirms that a short term counter trend move is underway. When this action is over look for the longer term negative trend to resume.

Gold was steady to slightly higher overnight as it consolidates some of last Thursday's decline. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near term. Closes below the reaction low crossing at 1361.6 would confirm that a short term top has been posted. If March renews this year's rally into uncharted territory, upside targets will be hard to project. First resistance is the reaction high crossing at 1408.90. Second resistance is this month's high crossing at 1432.50. First support is the reaction low crossing at 1361.60. Second support is the reaction low crossing at 1352.00. Gold pivot point for Monday morning is


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Even if Santa Forgot you, The Crude Oil Trader and MarketClub Didn't!

Did Santa forget you this year? Did he leave a lump of coal in your stocking? Not to worry, our friends at MarketClub have a gift for you. We're talking about a real, free of charge, no obligation, gift. Right now you can take advantage of TWO WEEKS of MarketClub on us. If you've been considering taking MarketClub for a test drive, what better time than when you're getting ready for 2011 trading?

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Happy Holidays from all of us here at The Crude Oil Trader




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Smooth Sailing For Crude Oil Bulls or Bearish Set Up?

Crude oil bulls are enjoying a gift from old Saint Nick. After hitting 90.79 in the overnight session the bulls are now being given a chance to break out of this month's trading range and have visions of $100 oil glistening with holiday cheer! But smart bears that know how to play these set ups with tight stops are peeking around the Christmas tree with such holiday glee. If the bears are regifted with trading below 89.06 [minor support] the trend will flip back to the downside to extend the consolidation from 90.76.

With so many commercial traders taking next week off you have to ask yourself "are you willing to sit on these oil long positions going into the holiday"? Enjoy your Christmas gifts and at the very least take part of your profits. Here's your trading numbers for Thursday morning.....

Crude oil was higher overnight while extending this month's trading range. Stochastics and the RSI are turning bullish signaling that sideways to higher prices are possible near term. If February renews the rally off November's low, May's high crossing at 93.87 is the next upside target. Closes below last Wednesday's low crossing at 87.43 are needed to confirm that a short term top has been posted. First resistance is this month's high crossing at 91.17. Second resistance is May's high crossing at 93.87. First support is the 20 day moving average crossing at 88.49. Second support is last Wednesday's low crossing at 87.43. Crude oil pivot point for Thursday morning is 90.38.

Natural gas was lower overnight as it extends this week's trading range. Stochastics and the RSI are oversold and are turning neutral to bullish hinting that a low might be in or is near. Closes above the 20 day moving average crossing at 4.280 are needed to confirm that a short term low has been posted. If January renews this month's decline, November's low crossing at 3.853 is the next downside target. First resistance is the 20 day moving average crossing at 4.280. Second resistance is this month's high crossing at 4.637. First support is last Friday's low crossing at 3.951. Second support is November's low crossing at 3.853. Natural gas pivot point for Thursday morning is 4.102.

Gold was lower overnight as it consolidates some of this week's gains. Stochastics and the RSI are turning neutral to bullish signaling that sideways to higher prices are possible near term. Closes above the reaction high crossing at 1408.90 are needed to confirm that a short term top has been posted. If March renews the decline off this month's high, the reaction low crossing at 1352.00 is the next downside target. First resistance is Tuesday's high crossing at 1393.00. Second resistance is the reaction high crossing at 1408.90. First support is last Thursday's low crossing at 1361.60. Second support is the reaction low crossing at 1352.00. Gold pivot point for Thursday morning is 1387.50.


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