Rigzone: Crude Oil Falls on IEA's Surprise Move

Crude prices plummeted to a four month low Thursday after the International Energy Agency (IEA) said it would release an emergency oil supply to alleviate high prices.

In an attempt to offset the supply disruption caused by Libya's civil war, the IEA said it will release 60 million barrels of oil over a 30 day period. Its members will release 2 million barrels of oil per day (bpd). Half of the amount will be provided by the U.S. Strategic Petroleum Reserve, which currently stores 727 million barrels of crude.

The IEA last tapped emergency resources in September 2005 after Hurricane Katrina disrupted production on the U.S. Gulf Coast.

Light, sweet crude lost $4.39 Thursday, settling at $91.02 a barrel. Prices traded as low as $89.69 and peaked at $94.47. Meanwhile, Brent crude ended Thursday's session at $107.26 a barrel, down $6.95. Goldman Sachs claims IEA's surprise release could cause Brent prices to decrease by $10-$12 a barrel by the end of July.

Likewise, natural gas for July delivery settled lower at $4.193 per thousand cubic feet. The drop came on government reports showing an increase in U.S. inventories. The U.S. Energy Information Administration (EIA) said stockpiles grew by 98 billion cubic feet last week. This marks the year's second largest increase in U.S. natural gas inventories.

The intraday range for natural gas was $4.15 to $4.34 Thursday. Front month gasoline futures settled down 13.57 cents at $2.84 a gallon. Prices fluctuated between $2.785 and $2.955 a gallon.

Posted courtesy of Rigzone.Com

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Does Helicopter Ben Really Know Best?

Yesterday it was Greece, today it’s Ben Bernanke and the FED. What is really going on with the equity market is that no one has strong feelings either on the upside or downside . This neutrality is reflected in our +55 reading indicating that the market remains in a trading range. Today we want to do something a little bit different, I am going to go through each of the markets quickly, and then zoom in and focus on two markets crude oil and silver. I think you’ll find our analysis quite interesting and informative.

Now let’s take a look at what’s happening in the markets....

S&P 500: +65. The market action continues to reflect a trading range. Major downside support is at $1,250. Upside resistance begins at $1,300.

Silver: +75. We talk about this market in more detail in the video, so tune in!

Gold: +100. All systems are go for gold but the market appears to be going up grudgingly. The weekly Donchian channel has resistance at $1,575 today. Major support at $1,513.

Crude Oil: -75. We also cover this with more detail in today’s video.

The Dollar Index: -80. Our indicators are still negative longer-term for the dollar. Minor support at $74.00. Major support at $73.00. Look for a test of the lower line of the Donchian channel which comes in at $73.54.

The Thomson Reuters/Jefferies CRB Commodity Index: +55. We are at the lower range of the Donchian channel and the market is oversold. We would not rule out some sort of bounce from current levels. Market remains in a broad trading range.

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New Video: Greece Votes Tonight, Sell Indicators for Crude Oil, Gold Buy Signals Galore!

All eyes are on Greece as the vote will be taken this afternoon at five o’clock Eastern standard Time. That is a vote of confidence on the last 30 measures and also on the government. As you know, the market has been in an oversold condition and I think today’s rally was reflective of that move from an oversold condition.

Crucial 5 PM Vote comes in when the markets are closed. If there is a vote that is negative then these markets will come crashing down tomorrow. This is just like gambling in that no one knows what’s going to happen with the Greek government. My own view is if they do agree on what they’re doing it will just be kicking the can down the road.
Now let’s take a look at the markets.....

S&P 500: +55. The market action continues to reflect a trading range. Yesterday we mentioned that this market was at the lower range of the channel and expected amounts. Today is that bounce. Major downside support is at $1,250.

Silver: +55. This market continues to contract and it does look like it is getting ready for a move one way or the other. We would wait for our trade triangles to kick in to give us that direction. Market is oversold and expect to see a bounce from current levels. Near term resistance at $39.00. Support at $34.00.

Gold: +100. All systems are go for gold and we expect this market to do better. The Donchian channel has resistance at $1,353 today. Major support at $1,513.

Crude Oil: -100. Today’s action in crude oil is very negative. The trend in crude oil is clearly down with all of our Trade Triangles in a negative position. The market did bounce as we expected from the lower levels of the Donchian channel. Look for more two way action in this market.

The Dollar Index: -80. Our indicators are still negative longer term for the dollar. Minor support at $74.00. Major support at $73.00. Look for a test of the lower line of the Donchian channel which comes in at $73.54.

The Thomson Reuters/Jefferies CRB Commodity Index: +55. We are at the lower end of the Donchian channel and the market is oversold. We would not rule out some sort of bounce from current levels. Market still appears to be in a broad trading range.

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U.S. Financials Still Look Sick....Would You Have Bet on the Malaysian Index?

The big news over the weekend was Greece and the 17 nations were unable to come to an agreement to put together a package for that beleaguered country. This agreement has been pushed off yet again until July. Markets both here and Europe initially reacted in a negative fashion but have come back and appear to be regrouping and rethinking the implications of this delay.

The bank stocks however still look sick and the trends are clearly down in this sector.

The Shanghai and Hong Kong indexes are also looking very negative as are most equity indexes around the world. The only index that is looking positive using our trade triangle technology is the Malaysian index.

Let’s take a look at the major markets now.....

S&P 500: -60. The market action continues to reflect a trading range. The market is at the lower end of the Donchian channel and is oversold so we may see a rally to resistance around $1,300. Major downside support is at $1,250.

Silver: +55. I would watch this market very carefully as I feel that it is probably at the lower end of its range. We would use the Donchian channel as support. We may bounce around for another couple of weeks but come July I think we’ll see this market on the move. Market is oversold and expect to see a bounce from current levels. Near term resistance at $36.00. Support at $34.00.

Gold: +90. All systems are go for gold and we expect this market to do better. The Donchian channel has resistance at $1,353 today. Major support at $1,513.

Crude Oil: -90. The trend in crude oil is clearly down with all of our Trade Triangles in a negative position. The market is however heavily oversold and at the lower end of the Donchian channel. We would expect to see a bounce from current levels but would like to see more positive action.

The Dollar Index: -65. Our indicators are still negative longer term for the dollar. Minor support at $74.00. Major support at $73.00. Big resistance at $76.00.

The Thomson Reuters/Jefferies CRB Commodity Index: -70. We are at the lower end of the Donchian channel and the market is oversold. We would not rule out some sort of bounce from current levels. Market still appears to be in a broad trading range.



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Is This Market Flashing a Buy Signal or Another Market Collapse?

Since the first trading session in May we have seen the stock market sell off. The old saying “sell in May and go away” was dead on again this year. Here we are 7 weeks later with the stock market continuing to lose ground. This extended sell off has everyone all worked up that this is the beginning of another market collapse.

Let’s take a quick look at the SP500 hourly chart covering the month of June.

As you can see, price is still falling but every couple of trading sessions we get some big money players nibbling on stocks accumulating shares and running the market higher. This type of price action is typically an early signal that the market is trying to bottom.

There are two key ingredients for a higher stock market and both have been missing from the mix for a couple months. The two key sectors which have a significant weighting in terms of the broader market are the financial and technology stocks.

Let’s take a look at the financial sector:
As you can see on the bottom of this chart, financials started to lag the market in late January. Ever since then this sector has been in a strong downtrend pulling the broad market averages lower with it. The good news is that this sector has just reached a major support zone and is looking ripe for a bounce and possible rally.

The other main ingredient to a higher stock market is the technology sector.

Looking at the technology sector:
Here we can see technology stocks have been pulling back for several weeks. Tech stocks are now trading down at a major support zone and they look oversold. A bounce from this level is very likely in the coming week.

Weekend Trading Conclusion:
In short, I continue to feel the market is trying to bottom here and we are at the tipping point when things get volatile and choppy just before we get a trend reversal in the S&P 500. Keep an eye on the short term charts of financials and technology sectors. Once they start making higher highs and higher lows on the 60 minute charts I believe it will be the start of a nice bounce and possible rally.

Get Chris Vermeulens free weekly technical analysis on sectors here at The Gold and Oil Guy.Com

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Politicians Around the World Just Kicking The Can Down the Road

I guess the most common expression I'm hearing is "kick the can down the road". It would seem as though politicians the world over are pretty much the same. None of them wants to face the truth that there is no more money. So what do they do they, "kick the can down the road".

And once again the taxpayers have to come up with the money. Lending more money to Greece is the height of insanity in my opinion simply because How can they possibly pay back the first tranches of money that was already has been lent to them? But that's what's happened today Merkle and Sarkozy made concessions and basically declared that "happy days are here again" are they really? I was talking to a good friend of mine this morning who is one of the smartest people I know and I asked him point blank, what do you think of the global and US economy? Here is what he said to me. "It is a time to be cautious and guarded" they were his exact words. I'll let you think about that.

So what can we as investors do to protect ourselves and hopefully profit in uncertain times? Well, for starters we need to understand the market conditions we are in the best we can. Second we need to identify where the money is still moving and in which direction. Adam Hewison has put together a great free video summing up the current conditions and trends of the major markets. The video is brief, to the point and very actionable...best of all its free. Click here to take a look.



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EIA: Natural Gas Weekly Update....Increases in Inventory Sending Prices Lower

The past week was characterized by passing of the earlier week’s heat wave. The Henry Hub price decreased 31 cents per million Btu (MMBtu) for the week (6.4 percent) to close at $4.52 per MMBtu on June 15. During the midst of the heat wave, working natural gas in storage last week rose to 2,256 billion cubic feet (Bcf) as of Friday, June 10, according to the U.S. Energy Information Administration’s (EIA) Weekly Natural Gas Storage Report (WNGSR). The implied increase for the week was 69 Bcf, leaving storage volumes positioned 275 Bcf below year-ago levels. At the New York Mercantile Exchange (NYMEX), the July 2011 natural gas contract price lost every day of the week, closing at $4.577 per MMBtu on Wednesday. The natural gas rotary rig count, as reported June 10 by Baker Hughes Incorporated, fell by 8 to 879 active units, continuing the trend of recent weeks. Meanwhile, oil-directed rigs were up 10 to 969, maintaining the disparity between the two drilling strategies.

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Rigzone: Crude Oil Plummets on Stronger Dollar

Crude oil for July delivery plunged Wednesday as fears of an escalating debt crisis in Greece contributed to a stronger dollar.

Oil lost $4.56 to settle at $94.81 after the dollar index, a gauge of the greenback's value against other major currencies, increased by 1.5 percent Wednesday. The euro lost 2.1 percent against the dollar, weighed down by Greek government officials' scrambling to gain support for austerity measures. The government must agree to such measures to address the country's debt crisis in order to qualify for a bailout from the European Union and International Monetary Fund.

Providing a softer landing for oil was a U.S. Energy Information Administration report showing a larger than expected decline in crude oil stocks last week. According to the EIA, total oil inventories decreased by 3.4 million barrels to 365.6 million barrels as of June 10. Analysts surveyed by Platts, meanwhile, had projected a 1.9 million barrel draw.

Front-month crude traded within a range from $94.01 to $99.95 Wednesday.

July natural gas remained flat during midweek trading, ending the day at $4.58 per thousand cubic feet. Milder than normal temperatures throughout the Upper Midwest and Northeast are curbing demand for natural gas to generate electricity for cooling in these regions.

Natural gas peaked at $4.605 and bottomed out at $4.52 Wednesday.

The gasoline futures price lost 15 cents to settle at $2.92 a gallon. During Wednesday's session, July gasoline fluctuated from $2.91 to $3.07.


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Market Update For Wednesday 6/15/2011

Here's a brief summary of what's in today's video and what's happening right now in the major markets:

- SP 500: -70. The market action today can only be described as negative. A score is now -70 and our downside target for this market is 1250. Major downside support is at 1250.

- Silver: -70. I would watch this market very carefully today as I feel that it is probably at the lower end of its range. We would use the Donchian Channels along with the fact that this market is oversold and expect to see a bounce from current levels. Major Support at 34.00.

- Gold: +70. Gold is currently oversold and we expect to see this market balance sometime in the near future. We would not be surprised to see further sideways action but we want to be long this market as the Donchian channel comes in at 1503. Major support at 1,500.

- Crude Oil: +55 Trading range. This market continues to pound out a base to go higher. Long term indicator remains positive. Support coming into this market at $96/barrel. This market is currently oversold and choppy.

- The Dollar Index: -55. Despite today's strong dollar rally in the index, the longer term and mid-term Trade Triangles remain negative. Resistance now at 76.50. The dollar index is now in overbought territory. Minor support at 73.50 and major support at 73.00.

- Reuters/Jefferies CRB Commodity Index: +55. This index is now beginning to reach an oversold condition and we may see further backing and filling-in softness. Near-term resistance at 350.00. Minor support at 340. Major support at 335.00. Trading range.

The big question is are we going to close lower seven weeks in a row in the major indexes. Many people trading the markets now have not seen the classic bear market which does not give you a chance to get out. Several of our major long-term indicators are close to turning negative and when they do we would recommend moving into an all cash position for hitting any portfolio you might have in stocks.

See what you can do to protect your portfolio and to watch Adam analyze these markets click here for instant access to INO TV.



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Chris Vermeulens Stocks & Commodity Technical Trading Outlook For Summer 2011

Do you have a plan for trading summer 2011? Are you sticking to the usual "sell in May and go away"? Today Chris Vermeulen of The Gold and Oil Guy.Com gives us plan for trading the summer of 2011......

The coming summer should be exciting for traders! While summer trading generally tends to be slow, this one could be different. A large number of other professional traders I talk with are all feeling the tension building in the market. We all think some big movements are just around the corner and the big question is which way are things going to move?

Depending on your trading style you may be viewing the recent market action as the beginning stages of a bear market (major sell off). A bear market is not necessarily impossible as the U.S. Economy is showing the beginning signs of weakness. The fact that stocks have moved lower for almost 6 weeks straight is a recent reminder that we may not be out of the woods just yet. The recent price action and negative sentiment has been harsh enough to make 99% of traders bearish.

In contrast, some traders may be seeing this market as an oversold dip preparing for a bounce/rally in the bull market which we have been in since 2009. Some traders may see this as a buying opportunity because you are a contrarian. Most contrarians generally want to do the opposite of the masses (herd) who are merely trading purely out of emotional sentiment.

I myself have mixed thoughts on the market at this point in time. I’m not a big picture (long trend forecasting) kind of guy but my trading partner David Banister is great at it. Rather I am a shorter term trader catching extreme sentiment shifts in the market with trades lasting 3-60 days in length. So looking forward 2-5 days I feel as though stocks and commodities are going to bottom and start to head higher for a 2-6% bounce. At that point we need to regroup and analyze how the market got there… Was the buying coming from the herd, institutions, or was it just a short covering rally? Additionally, where are the key resistance levels and did we break through any?

During extreme sentiment shifts in the market we tend to see investments fall out of sync with each other for a few days. I feel the attention will be on stocks and we get a bounce this week. I am expecting commodities to trade relatively flat during the same time period.

OK let’s take a quick look at the charts…

Dollar Index 4 Hour Candles
I feel as though the US Dollar is trying to bottom. It is very possible that we test the May low at which point I would expect another strong bounce and possible multi-month rally. So if the dollar drops to the May lows then we should see higher stocks and commodities, but once the dollar firms up and heads higher it will be game over for risk assets.

Crude Oil Chart – Daily
Oil took a swan dive in early May and has yet to show any signs of moving higher. Actually crude oil is looking more and more bearish as time goes by.

Silver 4 Hour Chart
Silver has formed much of the same pattern that oil has. On a technical basis its pointing to sharply lower prices still. The fact that silver bullion went from an investment to a speculative trading instrument within the past 8 months makes me think it could test the $25 area. The one thing to remember here is that silver is still overall in a bull market. This is a 50/50 guess in my opinion as it nears the apex of this pennant pattern.

Gold 4 Hour Chart
Gold has held up much better than other metals and commodities and I feel that is because it’s still seen at the REAL safe haven. But reviewing the chart Im starting to see bearish price action beginning to take place.

SP500 Futures – 10 Minute Chart Going Back 8 Days
Last week the SP500 continued to show signs of weakness. Any bounce in the market was on light volume and that is because the sellers took a break and let all the small traders buy the market back up. But once the market moved up enough then sellers jumped back in and unloaded their shares.

Last Thursday I sent out an update to members pointing out that lower prices were to be expected. I came to this conclusion because of many data points. Looking at the chart you can see sellers are clearly in control. The SP500 bounces high enough that it reached a key resistance levels going back 5 days. Also the 200 period moving average was at that level. To top that off my sentiment reading for the herd mentality was at a point which sellers like to start dumping their shares again.

Weekly Market Trading Conclusion:
In short, I am getting more bullish for a bounce as the market falls. But once we are into day 3 or 4 of a bounce we must be ready to take profits and/or look for a possible short setup.

Get Chris' free weekly reports at The Gold and Oil Guy.Com

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