ONG: Recent Developments Support Gold's Outlook

The G-20 summit ended Friday mainly focused on the sovereign debt crisis in the Eurozone. Two critical developments we observed were Italy's acceptance of surveillance and monitor by the IMF, as well as the failure to agree on the use of IMF resources. Both are expected to affect market sentiment towards the 17 nation region.

In the IMF program to monitor Italy's progress of the reforms, the world lender will provide independent and frequent assessments of the economic and financial conditions of Italy. It will also review on the Italian government's implementation of the fiscal policy such that credibility will be built up in the government regarding policy implementation.

The G-20 communiqué stated that G-20 countries 'stand ready to ensure additional resources could be mobilised in a timely manner'. The various channels that countries can contribute to the IMF include bilateral contributions, SDRs, and voluntary contributions to an IMF special structure such as an administered account.

AS happened last week was Greece's announcement and cancellation of the referendum of the EU agreement, FOMC meeting as well as ECB meeting. We will discuss in the precious metal section on these issues and their impacts on gold price......Check out Oil N'Gold.Com's commodities price movement charts.


Get Our Free Weekly Index & Commodity Forecast

Crude Oil Bulls Seem to Lack any Strong Conviction on the Upside

The crude oil market continues to inch higher, but seems to lack any strong conviction on the upside. Our short term Trade Triangle moved into a positive position moving the Chart Analysis Score to a +70. However, the December contract for crude oil remains in a trading range bound by $90 a barrel support on the downside, and $95 a barrel resistance on the upside.

With a score of +70 this market maybe trying to move out of its broad trading range. Depending what happens to equity markets and the global economy will likely be reflected in this commodity. Intermediate term traders should be on the sidelines and long term traders should continue to be short the crude oil market.

Monthly oil Trade Triangles for Long Term Trends = Negative
Weekly oil Trade Triangles for Intermediate Term Trends = Positive
Daily oil Trade Triangles for Short Term Trends = Positive
Combined Strength of Trend Score = + 70

Watch todays video covering crude oil and all six markets we cover publicly.


Today’s Stock Market Club Trading Triangles

Sinopec, PetroChina Rise on Speculation Government to Change Fuel Pricing

China Petroleum and Chemical Corp., Asia’s biggest refiner, rose the most in almost three years in Hong Kong trading on speculation the state may allow fuel suppliers including PetroChina Co. to adjust prices on their own.

Sinopec, as China Petroleum is known, gained 8.3 percent, the largest increase since Dec. 8, 2008, to HK$7.92 at the close. PetroChina climbed 3.9 percent, while Cnooc Ltd. (883), whose parent operates a refinery, advanced 5.1 percent. The benchmark Hang Seng Index climbed 3.1 percent.

China, which controls fuel prices to curb inflation, may permit refiners to make “appropriate” changes, China Securities Journal reported, citing an unidentified person. This would mark a further move toward market oriented pricing after China introduced a system in 2008 that linked government mandated changes to swings in benchmark crude prices.....Read the entire Bloomberg article.


Get your FREE Trend Analysis for PetroChina

Phil Flynn: Kicking The Cannes Down The Road

Global markets are trying to recover as the ECB provides some cover for the Greeks with a surprise rate cut against a backdrop of some better than expected US economic data. Europe was trying to continue to kick the Greek can down the road and tried to end the charade with a package to head off a Greek default.

Greek PM Papandreou created a world of turmoil proposing a referendum of the EU handouts as the markets gyrated headline after headline. The Greek people want a bailout but they don't want to make the spending cuts that will be necessary. Austerity is no fun, especially when you think you hold Europe and the world hostage and that you can still have your cake and eat it too.

Rumors that Papandreou would resign or that the referendum was off the table created wild swings and crazy things. Yet ECB cut rates helped restore sanity in an insane world.

The market also hoped that the G20 would do the Cannes can and help provide confidence to the global market place. The AP reports, "The United States, China, Germany and other major rich and emerging economies have pledged to fight cross border tax evasion under an agreement approved Friday, which supporters say could raise tens of billions of dollars at a time when indebted European nations are scrambling for more revenue.

The deal approved during the Group of 20 summit adds to a marathon campaign by the United States and the European Union to pressure Switzerland and other tax havens to scrap practices they say help wealthy individuals and companies hide income. Supporters say the agreement could help governments collect tens of billions of dollars in taxes on previously hidden income......Read the entire article.


Get 4 FREE Trading Videos from INO TV!

Transocean Drops on Biggest Earnings Miss in Half a Decade

Transocean Ltd. (RIG), the world’s largest offshore oil driller, fell the most in almost three years after third quarter earnings missed analysts’ estimates by the biggest margin in at least half a decade.

Transocean declined 12 percent to close at $49 in New York. Earlier, the stock plunged as much as 14 percent for the worst intraday performance since November 2008. After regular trading on U.S. markets closed yesterday, the company posted a loss of $71 million, or 22 cents a share, its largest third quarter loss in at least 10 years.

Excluding one time items such as foreign exchange contract costs associated with last month’s Aker Drilling ASA acquisition, the Vernier, Switzerland based company recorded per share profit of 3 cents, 73 cents lower than the average of 32 analysts’ estimates compiled by Bloomberg.

The company “did not deliver” in the third quarter, Chief Executive Officer Steven Newman told analysts and investors on a conference call today.

Manufacturing delays among equipment providers prolonged downtime for rigs subject to more stringent U.S. safety rules imposed in the wake of last year’s Macondo disaster in the Gulf of Mexico, Newman said........Read the entire Bloomberg article.



FREE Trade School Video “The Fibonacci Tool Fully Explained”

Rigzone: Crude Rises On Host Of Positive Economic News

Crude oil futures rose in volatile early trading Thursday on a host of bullish economic news, including a drop in initial jobless claims, an increase in business productivity and a European interest rate cut.

Light, sweet crude for December delivery was up $1.49, or 1.6%, at $94.00 a barrel on the New York Mercantile Exchange. Brent crude on the ICE Futures Europe exchange was up $1.28, or 1.2%, at $110.62 a barrel.

The U.S. said initial jobless claims fell 9,000, to 397,000 in the week ended Oct. 29, slightly lower than analyst expectations of 400,000. Productivity for the quarter was up 3.1% at an annualized rate, and the ECB reduced interest rates by a 0.25 percentage point to 1.25%.

Summit Energy analyst Matt Smith called the European Central Bank's move an "absolutely fabulous curveball" and said it would likely be good for oil prices. "It shows that the ECB not only acknowledges the frailty of the region's economy, but is willing to take whatever steps needed to promote stability," he said in a note......Read the entire Rigzone article.


How To Find Winning Trades In Any Market

Crude Oil Bulls Hold The Near Term Advantage

Crude oil closed higher on Thursday while extending the trading range of the past seven days. The high range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are overbought but are neutral to bullish signaling that sideways to higher prices are possible near term.

If December extends the rally off this month's low, the 50% retracement level of the May-October decline crossing at 95.32 is the next upside target. Closes below the 20 day moving average crossing at 89.04 are needed to confirm that a short term top has been posted.

First resistance is the 50% retracement level of the May-October decline crossing at 95.32. Second resistance is the 62% retracement level of the May-October decline crossing at 100.08. First support is the 20 day moving average crossing at 89.04. Second support is the reaction low crossing at 83.40.


Here’s a Great Alternative to High Price Trading Courses

Trends in Eagle Ford Drilling Highlight the Search for Oil and Natural Gas

Rapid growth in horizontal drilling at the Eagle Ford shale formation in Texas, like activity described in the previous story on the Bakken formation, has resulted in significant increases in crude oil and natural gas production. Increasing natural gas volumes have also boosted production of lease condensate (recovered as a liquid from natural gas in lease separation facilities) and natural gas liquids (extracted further "downstream" at natural gas processing plants).

The animated map shows that the Eagle Ford shale comprises three "windows" (roughly parallel acreage swaths). Production from these windows is increasingly liquids rich moving generally from south to north. The circular yellow and green producing well markers signify the more "oily" wells, with the red markers representing wells that produce mostly natural gas.

Eagle Ford Shale Drilling & Production (click image to animate)

 In 2007, total Eagle Ford liquids production (crude oil and condensate) was less than 21 thousand barrels, none of which was from horizontal wells. In 2010, production averaged nearly 29 thousand barrels per day (bbl/d), and was approaching 60 thousand bbl/d by year's end; virtually all was from horizontal wells. Production continues to rise in 2011; according to the Railroad Commission of Texas, Eagle Ford liquids production averaged 74 thousand bbl/d through July.


In major shale plays, drilling activity depends largely on the resource mix and relative fuel prices. For example, drilling in the Barnett shale focuses on natural gas. By contrast, operators in the Bakken formation tend to drill mainly for crude oil. In the Eagle Ford, however, the animation underscores how operators target a combination of crude oil, condensate, and natural gas liquids due to their relative price premium over natural gas. 


Source: U.S. Energy Information Administration, based on data from HPDI, LLC.

Note: Dot color is determined by the well's gas oil production ratio, or the volume of natural gas produced relative to oil. The higher the ratio (from green to red), the more gas is being produced. Dot size represents the well's production volume: either gas measured in barrels of oil equivalent per day (BOEPD) or oil measured in barrels. The lower right inset graph represents combined oil and natural gas production on a BOEPD basis.

---

Phil Flynn: Greased Lightening!

Greece throws the world in turmoil as France and Germany says that the Greece referdum is a vote on whether Greece wants to stay in the Euro Zone. In the mean time, Big Bad Ben Bernanke says that QE 3d is a real possibility as he lowers the growth and jobs forecast for the US economy. The Energy Information agency added a few surprises with a big build in crude oil and a disturbing drop in distillates that could send chills across your spine if you heat your home with heating oil. Yet the markets seemr to hope that the nova convening G20 can bring order back to the market place in a world where we don't know where the next crisis might come from.

Now austerity is one issue but having a sugar daddy to pay your bills is another. Greek PM Papandreou threw caution to the wind for what purpose no one is quite sure. If it was to save his political backside well perhaps he is one. European leaders on the other hand reframed the debate by telling the people of Greece that the referendum vote about the Greek bailout package may be a vote on whether they want to be in or out of the EU.

German Chancellor Angela Merkel and French President Nicolas Sarkozy has pulled the plug on the euro zone rescue aid driving Greek bonds to 100% and perhaps putting the country on the verge on bankruptcy. Sarkozy says that there will be, "no French taxpayer money, no German taxpayer money" until the question is answered. In the meantime global markets tank but are finding hope that somehow the G20 will restore sanity or a split in Papandreou inner circle might find hope that Greece will accept its partners handout.....Read Phil's entire article.

Wednesday Market Summary - Crude Oil , Natural Gas and Gold

Crude oil closed higher on Wednesday while extending last week's trading range. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are overbought but are neutral to bullish signaling that sideways to higher prices are possible near term.

If December extends the rally off this month's low, the 50% retracement level of the May-October decline crossing at 95.32 is the next upside target. Closes below the 20 day moving average crossing at 88.48 are needed to confirm that a short term top has been posted.

First resistance is the 50% retracement level of the May-October decline crossing at 95.32. Second resistance is the 62% retracement level of the May-October decline crossing at 100.08. First support is the 20 day moving average crossing at 88.48. Second support is the reaction low crossing at 83.40.

Get 4 FREE Trading Videos from INO TV!

Natural gas was lower on Wednesday while extending October's trading range. Stochastics and the RSI are turning neutral signaling that sideways trading is possible near term. Closes above the reaction high crossing at 4.039 are needed to confirm that a short term low has been posted.

If December renews this year's decline, monthly support crossing at 3.225 is the next downside target.

First resistance is the 25% retracement level of the June-October decline crossing at 4.133. Second resistance is the 38% retracement level of the June-October decline crossing at 4.336. First support is last Thursday's low crossing at 3.724. Second support is monthly support crossing at 3.225.

How to Use Money Management Stops Effectively

Gold closed higher on Wednesday and the high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that additional strength is possible near term.

If December extends the rally off September's low, the 62% retracement level of the 2008-2011 rally crossing at 1775.20 is the next upside target. Closes below the reaction low crossing at 1604.70 would confirm that a short term top has been posted.

First resistance is the 62% retracement level of the 2008-2011 rally crossing at 1775.20. Second resistance is the 75% retracement level of the 2008-2011 rally crossing at 1826.50. First support is the reaction low crossing at 1604.70. Second support is September's low crossing at 1535.00.

What are you waiting for....Here is 10 FREE Trading Lessons!