Apple and Goldman Crash, But is the High Still Coming?

On Wednesday the equities market poured out a sea of red candles. Leaving most traders and investors feeling that most all of their recent gains had disappeared in one short session. And we have warned repeatedly that strong selling volume sessions like this is typically an early warning that distribution selling is starting to enter the market.

Distribution selling is when the big money players start unloading large positions in anticipation of a market top. They do try to hide it by selling into good news or earnings when the average investors are buying into all the hype of better than expected earnings on the news. As average investors jump into the market because of the good news, this extra liquidity helps the big money players (banks, hedge funds, etc..) sell large amounts of their positions to the eager buyers. This is why the “buy on rumor and sell on the news” saying is kicked around wall street.....

To me, panic selling is typically seen as a bullish sign to enter the market simply because if everyone is/has rushed to the door to sell what they own, then really most of the down side risk has been taken out of the market. That being said after an extended multi month rally and higher than selling volume I look at it more like distribution selling and a shift in momentum.

I feel the precious metals sector will be starting something like this in the near futures, and possibly it has already started as seen in the rising volume on the down days.

Let’s take a look at the charts…

AAPL – Apple Stock 10 Minute Chart
Two days ago AAPL shares took big hit because of some medical issues with the CEO, the shares did float back up. But what is important here is the distribution selling which took place after Apple came out with much better than expected earnings. The general public loves to buy good news especially when it’s for a famous company. But large sellers stepped in unloading as much of their position as they could before making it look to obvious.

The average investor listening on the radio or catching snippets on the news do not pick up on these things which is why the big money players can get away with this over and over again.

GS – Goldman Sachs 10 Minute Chart
Goldman came out with average earnings being just above estimates and the share price took a beating with very strong volume.

Distribution selling looks to be entering the market and this is a bearish sign. I would not be surprised if we see the market top out in the next 5-10 trading sessions.

SPY – SP500 10 Minute Chart
Here you can see my green panic selling indicator spiking up much higher than normal dwarfing the past sell off spikes. This makes me think the big money is now starting to unload which will shift the current upward momentum to more of a sideways whipsaw type of price action. Eventually it will roll over and a new down trend will start.

As you can see from this chart the SP500 is trading down at a support level so a bounce is likely going to take place. If in fact today was the first distribution day then the big money should let the price inflate back up to the recent highs and possibly make a new high to help keep investors bullish before the hit their SELL BUTTON again… They like to play these games and understanding them is a key part of trading. Expect choppy price action for a week or two…...

Silver Daily Chart – The Next Wave of Selling?
I look at silver and gold as one… so what I show here is the exact same for gold.

As you can see silver is trading under 3 of its key moving averages and Wednesdays bounce was sold into after testing the 14 and 20 period moving averages.

Take a looking at the bottom of the chart and you can see distribution selling volume as the spikes are all down days. If silver breaks below the $28 level then we could easily and quickly see the $26 and maybe even the $24 level.

The Mid-Week Market & Metals Trading Conclusion:
In short, the financial power players are pulling out all the tricks to shake traders out of their positions. A lot of people shorted the market in the past 2 weeks only to get hung out to dry and most likely stopped out of their short positions for a loss. Fortunately we did the opposite taking another long position in the SP500 ETFS because my market internal indicators, market breadth and simple trading strategy clearly pointed out that the average investor was trying to pick a top by shorting the market. As we all know, the market is designed to hurt the masses which is why I focus on the underlying trends, price action, volume and market sentiment for timing trend changes.

That being said, I still think the market could grind higher and make another new high. But any rally or new high will most likely get stepped on with heavy selling. Expect strong selling days followed by a couple days of light volume sessions where the price drifts back up into resistance levels. This could take a week or two to unfold so don’t jump the gun and short yet. It’s best to see more distribution selling before picking a top.

If you like these trading reports or if you would like to get my daily pre-market trading videos, intraday charts, updates and trade alerts be sure to join my newsletter. Visit The Gold and Oil Guy.Com

Chris Vermeulen


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Crude Oil Really is Our New World Currency

This weeks visit to the U.S. by Chinese leader Hu Jintao is making it painfully obvious for crude oil traders that crude oil is the new world currency. And while President Hu is apparently furious at the U.S. QE and QE2 actions of printing money, give them credit for trying to print or control all of the "new world currency" they can. The Chinese are replacing American companies in Costa Rica, expanding projects in the middle east and Africa and starting new projects off the coast of Cuba while U.S. companies still look for approval to drill within eye site of the China/Cuba projects. And it's paying off for them as reports show Chinas oil production increased 6.9% in 2010.

With pipelines plugged and European debt crisis slinking their way out of the news all eyes are back to inventory levels and the Euro/Dollar trade. Enjoy the temporary return of the quiet, peaceful, easy trade. Our future lies in Chinese GDP numbers, inflation and currency manipulation news. On that subject, China's National Bureau of Statistics Thursday also reported that fourth quarter gross domestic product grew 9.8% from a year earlier, above economists' expectations for a 9.2% expansion. So much for the poor guys and their attempt at gradually imposing lending restrictions to prevent runaway inflation.

With looming inventory numbers and the dollar falling along side crude oil overnight, let's take a run at it today using these pivot, support and resistance numbers.....

Crude oil was lower overnight as it consolidates some of last week's rally. Stochastics and the RSI are turning bearish signaling that sideways to lower prices are possible near term. Closes below the reaction low crossing at 87.25 would confirm that a short term top has been posted. If February extends last week's rally, this year's high crossing at 92.58 is the next upside target. First resistance is this year's high crossing at 92.58. Second resistance is weekly resistance crossing at 93.87. First support is the reaction low crossing at 87.25. Second support is the reaction low crossing at 84.09. Crude oil pivot point for Thursday morning is 92.10.

Natural gas was slightly higher overnight as it extends the short covering rebound off last week's low. Stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices are possible near term. Closes below the 20 day moving average crossing at 4.414 are needed to confirm that a short term top has been posted. If February renews the rally off December's low, the 50% retracement level of the June-October decline crossing at 4.876 is the next upside target. First resistance is this month's high crossing at 4.707. Second resistance is the 50% retracement level of the June-October decline crossing at 4.876. First support is the 20 day moving average crossing at 4.414. Second support is December's low crossing at 3.985. Natural gas pivot point for Thursday morning is 4.517.

Gold was lower overnight signaling a possible end to a two day short covering bounce off Monday's low. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible. If February extends this month's decline, the reaction low crossing at 1331.10 is the next downside target. Closes above the 20 day moving average crossing at 1385.20 are needed to confirm that a short term low has been posted. First resistance is the 20 day moving average crossing at 1385.20. Second resistance is this month's high crossing at 1424.40. First support is the reaction low crossing at 1352.70. Second support is the reaction low crossing at 1331.10. Gold pivot point for Thursday morning is 1371.50.


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Five New Ideas for Energy Markets to make Money With in 2011

2010 was an amazing year for commodity traders so we have to ask ourselves is the top in? Are we now in "bubble territory" when it comes to commodities like oil? And what about energy, do we still have room to run in the energy sector?

In today's short video we are going to show you some of the markets that we are looking at in the energy complex. We're going to be looking at coal, oil, solar and some other large energy companies and ETF's.

As this is a short video, be sure to check in and watch our webinar this Thursday, January 20th at 4pm EST/9pm GMT. You will need to reserve a spot as tour webinars typically reach capacity quickly. Just click here to register for this weeks webinar. As always all webinars are free to attend.

Take a look at what we will be covering in the webinar and check out our new portfolio manager which we will be using extensively throughout today's video. We also have a big surprise which will be announced at the webinar and I have no doubt that you will like. Today's video requires no registration and is free to watch:

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OPEC Quietly Raising Output Overshadowed By Chinese Macroeconomic Data

Positive Chinese macroeconomic data gave the crude oil and commodity bulls the advantage in the European session overnight even as traders digest news that OPEC has quietly been increasing production. OPEC seems to keep finding ways to make themselves irrelevant as OPEC's own report revealed that compliance level for the "OPEC 11" dropped to 54.0% in December 2010. Looks like OPEC as quietly been raising production while sending their cheerleaders out to the press to call for higher oil prices for some of their ailing economies as they themselves fight to contain food prices in some of their own countries.

And this may not make the nightly news but I am sure the visit to the White House by Chinese President Hu Jintao will have the leaders focusing on world food prices as China has made a priority out of bringing new energy sources online at all cost. And Washington will be playing catch up again, but there is hope for the new "Clintonized" Obama agenda as the attitude towards business coming from the administration is changing quickly. Does this mean we have some new permits being approved for Nuclear power plants right around the corner? We won't be holding our breaths for that but we can still dream.

Oil futures are up this morning as far out as February 2012 but well below the the critical 92.58 level. Is it all aboard the bull bus this morning? Here's your pivot, resistance and support numbers for Wednesdays trading.......

Crude oil was higher overnight and remains poised to extend last week's rally. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term. If February extends last week's rally, this year's high crossing at 92.58 is the next upside target. Closes below the reaction low crossing at 87.25 would confirm that a short term top has been posted. First resistance is this year's high crossing at 92.58. Second resistance is weekly resistance crossing at 93.87. First support is the reaction low crossing at 87.25. Second support is the reaction low crossing at 84.09. Crude oil pivot point for Wednesday morning is 92.21.

Natural gas was slightly higher overnight as it consolidates above the 20 day moving average crossing at 4.385. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term. Closes below the 20 day moving average crossing at 4.385 are needed to confirm that a short term top has been posted. If February renews the rally off December's low, the 50% retracement level of the June-October decline crossing at 4.876 is the next upside target. First resistance is this month's high crossing at 4.707. Second resistance is the 50% retracement level of the June-October decline crossing at 4.876. First support is the 20 day moving average crossing at 4.385. Second support is December's low crossing at 3.985. Natural gas pivot point for Wednesday morning is 4.450

Gold was higher due to short covering overnight as it consolidates some of last week's rally. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible. If February extends last week's decline, the reaction low crossing at 1331.10 is the next downside target. Closes above the 20 day moving average crossing at 1386.70 are needed to confirm that a short term low has been posted. First resistance is the 20 day moving average crossing at 1386.70. Second resistance is this month's high crossing at 1424.40. First support is the reaction low crossing at 1352.70. Second support is the reaction low crossing at 1331.10. Gold pivot point for Wednesday morning is 1367.00.


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Crude Oil Bears Gain Momentum on Pipeline Opening and Weaker Euro

Hopes of a stronger Euro were dashed this week as European leaders have made a surprise move of putting off any real rescue plan until March. Giving a new round of strength to the U.S. Dollar and putting pressure on the crude oil bulls at least for the near term. The reopening of the Alyeska Pipeline has also given the crude oil bears reason for hope as the pipeline operators officially announced that repairs are complete. In its monthly report on Tuesday, the IEA, said world oil demand growth in 2011 would be slightly higher than it had previously expected, although it would not reach the "exceptional levels" of last year.

Expect a bit more "noise" from OPEC in 2011 as the current OPEC President will be Iran's Oil Minister Massoud Mirkazemi. And in a news conference Mirkazemi stated "None of the OPEC members find $100 concerning or irrational. Some of the OPEC members see no need for an emergency meeting even with prices at $110 or $120". All that really matters to the west is if the more moderate producers like Saudi Arabia, Gulf allies Kuwait and the United Arab Emirates will make a move to prevent prices from escalating further.

The 3 day weekend is over for us here in the U.S. so let's trade, here is your pivot, support and resistance numbers for Tuesday.......

Crude oil was slightly lower overnight as it consolidates some of last week's rally. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term. If February extends last week's rally, this year's high crossing at 92.58 is the next upside target. Closes below the reaction low crossing at 87.25 would confirm that a short term top has been posted. First resistance is this year's high crossing at 92.58. Second resistance is weekly resistance crossing at 93.87. First support is the reaction low crossing at 87.25. Second support is the reaction low crossing at 84.09. Crude oil pivot point for Tuesday morning is 91.22.

Natural gas was slightly higher overnight as it consolidates above the 20 day moving average crossing at 4.393. Stochastics and the RSI are neutral signaling that sideways trading is possible near term. Closes below the 20 day moving average crossing at 4.393 are needed to confirm that a short term top has been posted. If February renews the rally off December's low, the 50% retracement level of the June-October decline crossing at 4.876 is the next upside target. First resistance is this month's high crossing at 4.707. Second resistance is the 50% retracement level of the June-October decline crossing at 4.876. First support is the 20 day moving average crossing at 4.393. Second support is December's low crossing at 3.985. Natural gas pivot point for Tuesday morning is 4.510.

Gold was higher due to short covering overnight as it consolidates some of last week's rally. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible. If February extends last week's decline, the reaction low crossing at 1331.10 is the next downside target. Closes above the 20 day moving average crossing at 1386.10 are needed to confirm that a short term low has been posted. First resistance is the 20 day moving average crossing at 1386.10. Second resistance is this month's high crossing at 1424.40. First support is the reaction low crossing at 1356.50. Second support is the reaction low crossing at 1331.10. gold pivot point for Tuesday morning is 1361.10.


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David Bannister: Gold Remains Bearish, SP 500 Appears to Be Topping

Well, our time line for the crude oil pull back is upon us this week. Right or wrong we all fully backed by safe stops being in place. And David Banister appears to be making the same call in gold and the SP 500. His most recent forecasts for the SP 500 and Gold have been calling for interim peaks in both around Mid-January. Gold, he told his subscribers a few weeks ago, was definitely topping and likely to drop now to $1270-$1280 per ounce before resuming the Bull Market advance. The SP 500 he had forecasted a 1285-1315 topping area since the 1175 pivot lows on that index, and we are very close as well in that regard.

Gold has been in a 9 plus year bull market since 2001 and has another 3 years plus left on this Bull run. However, pauses must occur along the way and this should be a 4th wave corrective Elliott pattern if his views are right. This is taking the form of a 3-3-5 correction from the $1430 top. We are in the final 5 waves down now, and it’s about to get ugly near term so strap on your seat belts. His chart forecast is below and if he is right, there will be excellent opportunities to pick up some good Juniors and also the precious metals themselves around that $1270-$1280 area. Following this correction, we could have a run to about $1515 per ounce, and he expects this entire pattern to take 6 months to a year to play out from the $1430 top to the $1270 ish bottoms, and back to $1515.

The SP 500 is completing the final 5th wave movement from the 1010 Jul 1st lows this past summer. This is only the first full wave pattern movement of a big 5 wave leg up from July 1st. What this means in English is we have a near term top likely in the 1285-1315 areas, followed by a wave 2 correction to around the 1175-1180 areas. Sentiment right now is running at major extremes last seen at interim peaks in January of 2010 and April of 2010 where he had also forecasted tops within days of the peaks. Banister is looking for the SP 500 to end up around 1600 on the index after this coming wave 2 correction, but he reminds us to take it one pivot and step at a time. Below is his forecast chartwise:

If you would like to benefit from learning more about Elliott Wave based forecasting using David Banisters methods, which have been historically accurate, please check him out at Market Trend Forecast.com There is a coupon available if you’d like to subscribe or you can sign up for free occasional reports.

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Crude Oil, Energy and Food.....is This 2008 All Over Again?

Regular visitors here at The Crude Oil Trader may sometimes think we are always bearish and usually pushing the doomsday scenarios. But that couldn't be further from the truth, we do believe in Uncle Warren's "never bet against the U.S.". But what we call the new world economy has proven to us that future demand in China and India will create challenges for us that will make producing affordable food nearly impossible. And if we are to find a way it will take leadership in Washington that we have not seen in......oh, 100 years!

One of my favorite traders in the commodities trading is Dian L. Chu, and this week she wrote.......During the past decade, Finished Goods PPI has risen roughly 35% while the CPI was up about 30%, which seems to suggest producers typically pass through most of the cost increases to the end market.


And news such as the following could only mean that there’s pent up inflation pressure up the supply chain just waiting to be passed through. Commodity prices jumped to two year high on expectations for global economic growth and lower U.S. forecasts for agricultural inventories. The Food Price Index (See Charts Below) compiled by the U.N. Food and Agriculture Organization (FAO) surged 25% in 2010 and hit an all time high in December, at the level even worse than the food crisis in 2008. FAO acknowledged that this is unlikely the peak yet.

And if you think the 25% spike in food prices seems extreme, wait till you check out the Non-Food Agriculture (NFA) prices. The chart below from The Economist shows that the NFA prices were up almost 80% in 2010! NFAs are agricultural materials with heavy industrial applications such as cotton and rubber.

It's really not difficult math, it's as if we can't afford to let the economy get any better or we'll repeat 2008. Our economy can't stand the $4.00 gasoline of 2008, what will happen at $5.00. And it's not a matter of if we get $5.00 gas, just when. Should we be happy if we can just maintain the balance where we are at right now? Well, that isn't possible either as this current "rally" has no real merit as it is build upon a house of cards called QE and QE2. How long will oil rich nations continue to buy that debt?

This surely won't keep us from trading today, just gives us all the more reason to day trade using these pivot, support and resistance numbers.........

Crude oil was lower due to profit taking overnight as it consolidates some of this week's rally. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term. If February extends this week's rally, this year's high crossing at 92.58 is the next upside target. Closes below last Friday's low crossing at 87.25 would confirm that a short term top has been posted. First resistance is this year's high crossing at 92.58. Second resistance is weekly resistance crossing at 93.87. First support is last Friday's low crossing at 87.25. Second support is the reaction low crossing at 84.09. Crude oil pivot point for Friday morning is 91.51.

Natural gas was steady overnight hinting that the two-day correction off Monday's low might be ending. Stochastics and the RSI are neutral signaling that sideways trading is possible near term. Closes below the 20 day moving average crossing at 4.355 are needed to confirm that a short term top has been posted. If February renews the rally off December's low, the 50% retracement level of the June-October decline crossing at 4.876 is the next upside target. First resistance is last Tuesday's high crossing at 4.707. Second resistance is the 50% retracement level of the June-October decline crossing at 4.876. First support is the 20 day moving average crossing at 4.355. Second support is December's low crossing at 3.985. Natural gas pivot point for Friday morning is 4.424.

Gold was lower overnight as it consolidates some of this week's rally. Stochastics and the RSI are turning neutral signaling that sideways to lower prices are possible. If February renews last week's decline, the reaction low crossing at 1331.10 is the next downside target. Closes above the 20 day moving average crossing at 1388.20 are needed to confirm that a short term low has been posted. First resistance is the 20 day moving average crossing at 1388.20. Second resistance is last Monday's high crossing at 1424.40. First support is last Friday's low crossing at 1356.50. Second support is the reaction low crossing at 1331.10. Gold pivot point for Friday morning is 1383.00.


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Gold, Silver, and the Dollar....How Does Their Future Look?

Chris Vermeulen has been telling us since mid-October of last year that gold was starting to give hints of distribution selling. Then in November silver started warning us that some big players were taking some profits off the table also. In todays post Chris reminds us that distribution selling is easy to spot on the charts. Saying that in short you will see heavy volume selling accompanied with strong moves to the downside.

Now if we look at the US Dollar chart we see the exact opposite price action. We see sharp rallies during October and November of last year. It’s normal to say that gold and silver move inverse to the Dollar so this price action makes perfect sense.

The interesting thing with the US Dollar is that in Nov-December it rallied breaking through a key resistance level and has been consolidating above support ever since. If this bullish pattern (bull flag) plays out, then it’s just a matter of time before the dollar makes another strong rally upwards, which will put downward pressure on stocks and commodities.

Take a look at the charts below....

US Dollar Daily Chart
The 50 period moving average has provided key support/resistance levels for the previous trends and if it holds true going forward then we are not far from another rally in the dollar.

Gold Futures Daily Chart
Gold moves inverse to the dollar so if we get a higher dollar then look for gold to have a stair step pattern lower.

Silver Futures Daily Chart
Silver looks about ready to do the same thing as gold.

Precious Metals and Dollar Trading Conclusion:
In short, we could see a major shift in momentum from up to down in both precious metals and the equities market. Keep in mind the market has a way of dragging out patterns/moves so while the chart looks bearish and I think a reversal is near, things could just chop around for another month or so before a definitive breakout is made. Choppy market conditions are great for trading options but no short term trend traders like myself. This is why you don’t want to anticipate moves (pick a top). Currently I am neutral on metals and the dollar waiting for a setup which must have clear risk/reward characteristics.

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Washington's Goal For Crude Oil Prices.......Everybody Sing "Can You Take Me Higher"

Preparing for our post this morning and another great day of trading I again was struck by the stark contrast in energy policies coming out of Washington and the policies....or should I say PROFITS coming out of CNPC. PetroChina's parent company.

Bloomberg News reported this morning....China National Petroleum Corp., the parent of the country’s biggest oil and gas producer, increased its profit by 30 percent last year as oil prices rose. The majority shareholder in Hong Kong listed PetroChina Co. earned 167.6 billion yuan ($25.4 billion), President Jiang Jiemin said in a statement on CNPC’s website today, without specifying whether the income was before or after tax. Profit reached 128.6 billion yuan in 2009, its annual report shows.

CNPC benefited from the 15 percent jump in oil prices last year and higher output from fields outside China. The Beijing based company, which holds assets and interests in 30 countries, said overall crude output may rise by an average of 2 million metric tons annually during the next five years, and CNPC is targeting a “rapid” increase in gas production.

“The estimated increases make sense,” Yin Xiaodong, chief oil analyst at Beijing based Citic Securities Co., said by telephone. “Gas production growth will definitely outpace increases in oil, and overseas acquisitions will give CNPC a strong boost in the long term.” CNPC’s oil and gas production in countries including Kazakhstan rose 14 percent last year. PetroChina said this week its venture with BP Plc met their 2010 output target for the Rumaila oilfield in southern Iraq.

All of this while oil prices soared after the release of the final scathing report by the White House oil spill commission. Co-Chairman William Reilly alluded to in a press conference that if you thought that the panel investigating the Deep Water Horizon disaster would fade away, well you have another think coming. Mr. Reilly says that he plans to make a “lot of noise”! This of course will send major oil companies scurrying to find oil in far away places that China has been doing business with for years now.

The energy policy coming out of Washington is simple. Make oil as expensive as possible making current food supply issues worldwide and for Americans an even larger burden. And keep the U.S. as reliant as possible on foreign oil and energy. And China just keeps expanding it's oil exploration at alarming rates, and good for them. I found this great website that we all might find very useful. Learn to Speak Chinese, if we are going to need to beg for food we better be using the right language. And yes, our fund has taken larger positions in both etf's MOO and DBA. Our favorite way to play food.

Let's try to make some money today so maybe we can afford that food and here is the numbers we are using........

Crude oil was lower due to profit taking overnight as it consolidates some of this week's rally. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term. If February extends this week's rally, this year's high crossing at 92.58 is the next upside target. Closes below last Friday's low crossing at 87.25 would confirm that a short term top has been posted. First resistance is this year's high crossing at 92.58. Second resistance is weekly resistance crossing at 93.87. First support is last Friday's low crossing at 87.25. Second support is the reaction low crossing at 84.09. Crude oil pivot point for Thursday morning is 91.68.

Natural gas was lower overnight hinting that the two day correction off Monday's low might be ending. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near term. If February renews the rally off December's low, the 50% retracement level of the June-October decline crossing at 4.876 is the next upside target. Closes below the 20 day moving average crossing at 4.343 are needed to confirm that a short term top has been posted. First resistance is last Tuesday's high crossing at 4.707. Second resistance is the 50% retracement level of the June-October decline crossing at 4.876. First support is the 20 day moving average crossing at 4.343. Second support is December's low crossing at 3.985. Natural gas pivot point for Thursday morning is 4.510.

Gold was lower overnight as it consolidates some of this week's rally. However, stochastics and the RSI have turned bullish hinting that a short term low might be in or is near. Closes above the 20 day moving average crossing at 1388.10 are needed to confirm that a short term low has been posted. If February renews last week's decline, the reaction low crossing at 1331.10 is the next downside target. First resistance is the 20 day moving average crossing at 1388.10. Second resistance is last Monday's high crossing at 1424.40. First support is last Friday's low crossing at 1356.50. Second support is the reaction low crossing at 1331.10. Gold pivot point for Thursday morning is 1383.70.

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U.S. Dollar Strength Will Trump Leaky Pipeline in the Oil Trade

Leaky pipelines might be big news to traders but international debt issues and it's effect on the dollar continue to be the driving force behind the oil trade. If we see a flight to quality in the U.S. dollar then look for oil bulls to sell off positions. The largest sell offs in 2010 were always over Greece and Ireland debt news. Japan moves eases concerns then that might be bullish for oil. News from Reuters reported that "Japan promised to buy euro zone bonds this month in a show of support for Europe's struggle with a seething debt crisis", and some traders believe that's enough to push oil through this years highs.

On Tuesday our "MarketClub Trade Triangles" issued a short term traders exit signal for all gold "short positions" on a Green Daily “Trade Triangle” @ $1,378.52. Our Trade Triangles are leaving intermediate traders in a sidelines position and our long term traders in a hold long position. If you are not yet a member of MarketClub see what you are missing in 2011 with a 30 Day Risk Free trial and receive 3 valuable bonuses just for giving us a try.

Here's your pivot points, resistance and support numbers for crude oil, natural gas and gold for Wednesday morning......

Crude oil was lower due to 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 February extends this week's rally, this year's high crossing at 92.58 is the next upside target. Closes below last Friday's low crossing at 87.25 would confirm that a short term top has been posted. First resistance is the overnight high crossing at 91.74. Second resistance is this year's high crossing at 92.58. First support is last Friday's low crossing at 87.25. Second support is the reaction low crossing at 84.09. Crude oil pivot point for Wednesday morning is 90.48.

Natural gas was higher overnight as it consolidates some of last week's decline. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near term. Closes below the 20 day moving average crossing at 4.332 are needed to confirm that a short term top has been posted. If February renews the rally off December's low, the 50% retracement level of the June-October decline crossing at 4.876 is the next upside target. First resistance is last Tuesday's high crossing at 4.707. Second resistance is the 50% retracement level of the June-October decline crossing at 4.876. First support is the 20 day moving average crossing at 4.332. Second support is December's low crossing at 3.985. Natural gas pivot point for Wednesday morning is 4.441.

Gold was lower overnight as it some of this week's short covering gains. Stochastics and the RSI are turning bullish hinting that a short term low might be in or is near. Closes above the 10 day moving average crossing at 1388.40 would confirm that a short term low has been posted. If February renews last week's decline, the reaction low crossing at 1331.10 is the next downside target. First resistance is the 10 day moving average crossing at 1388.40. Second resistance is last Monday's high crossing at 1424.40. First support is last Friday's low crossing at 1356.50. Second support is the reaction low crossing at 1331.10. Gold pivot point for Wednesday morning is 1381.20.


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