Phil Flynn: The Widow Maker Is Making OUT

They of course call it the widow maker or the unimaginative perhaps the heating oil gasoline spread. The Spread has been soaring as the heating oil market is reflecting all of the news that can pact supply by the preponderance of news that has driven oil. The news is getting more bullish for heating oil, diesel and fuel oil and more bearish for oil.

Whether you are talking about the agreement in principle by the European Union to impose an oil embargo on Iran or the closure of Petro Plus refineries in Europe the spread just continues to soar. Of course the other side of that coin is the fact that gasoline demand is weak. As we told you the EU will move forward on an oil embargo and the US made it harder for Iran to sell oil by new banking sanctions. This will tighten Distillate supply in Europe while gasoline demand is tanking!

The MasterCard Spending Pulse showed just how weak by reporting that Gasoline demand in the United States plunged 1.297 million bpd or 13.7% to 8.160 million bpd during the week ended Dec. 30, according to data released today by SpendingPulse, which is published by MasterCard Advisors, the professional arm of MasterCard Worldwide.

SpendingPulse reported 57.122 million bbl of gasoline was sold at retail outlets during the week reviewed, tumbling 9.079 million bbl versus the prior week. While the market was focused on the Iranian drama and word that the EU as expected would put on sanctions the good news was that French refiners decide not to call for a national strike. Also Heating oil is getting a boost from the return of winter, that north eastern cold blast is driving prices in many commodities. Even OJ is soaring as fears that a freeze in Florida may do damage to the Orange trees.

And a frosty reception the French 10 year auction may give us a break to get long. Gold looks like it has hit bottom. Now some say that gold rallied in response to the EU sanctions on Iran but it seems strange that oil fell back and gold did not. It shows you that there is something more to the gold rally. Gold of course did perform better in terms of the Euro as safe haven European buying seemed to gravitate towards the yen Silver on the other hand was weaker.

Of Course despite the recent weakness in silver and it ignominious correction the average annual price of $35.12 per ounce last year, set a new price record and was a 74% gain over the 2010 average annual price of $20.19 per ounce. We are seeing some long gold short silvers as the small investors are not ready to believe in the precious metals rally just yet.

Natural Gas could not stay below $300 for very long. A blast of winter and a upcoming injection report more than likely cause some short covering. That is despite a warm up in the Midwest! Winter? What winter? We should see a 76 bcf withdrawal and will leave supply at a record high for this time of year.

More Rain In Argentina? Maybe? The Beans pull back a bit Some experts are saying that id Argentina crop could be down by 2 to four million tons but could lose as much as 10 million if they do not get rain.


Check out Phil's service by emailing him at pflynn@pfgbest.com


Precious Metals, Equities and Crude Oil Long Term Outlook

Crude Oil Bulls "Cling" to Bullish Trade Triangles

Crude oil closed lower due to profit taking on Thursday as it consolidates some of the rally off December's low. The low range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI are overbought but remain bullish signaling that sideways to higher prices are possible near term.

If February extends the rally off December's low, the 75% retracement level of the 2011 decline crossing at 104.84 is the next upside target. Closes below the 20 day moving average crossing at 98.84 would signal that a short term top has been posted.

First resistance is Wednesday's high crossing at 103.74. Second resistance is the 75% retracement level of the 2011 decline crossing at 104.84. First support is the 10 day moving average crossing at 100.55. Second support is the 20 day moving average crossing at 98.84.

Crude oils chart Analysis Score of +90 this market remains very much in a strong upward trend, despite today’s pullback. The crude oil market has resistance starting at $104 up to the $105 level. Long and intermediate term traders should be long this market with appropriate money management stops. Monthly, weekly and daily Trade Triangles all remain bullish.


Five Best Trade Ideas for the Next Two Weeks

ONG: Crude Oil Daily Technical Outlook For Thursday Jan. 5th

Crude oil lost some upside momentum after breaching 103.37 resistance but retreat is so far shallow. Intraday bias remains on the upside and sustained break of 103.37 will confirm resumption of whole rise from 75.94 and should target 114.83 key resistance next. Meanwhile, break of 98.30 support is needed to signal topping. Otherwise, we'll stay cautiously bullish in crude oil even in case of deeper retreat.

In the bigger picture, fall from 114.83 has finished at 74.95 already. The structure suggests it's merely a correction or part of a consolidation pattern. Hence, rise from 33.2 is not completed yet. As long as 89.16/17 support holds, we'd favor a break of 114.83 resistance to resume the rally from 33.2. However, break of 89.16/17 will indicate that rebound from 74.95 has completed and whole fall from 114.83 is possibly resuming for another low below 74.95.

Nymex Crude Oil Continuous Contract 4 Hour, Daily, Weekly and Monthly Charts


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EIA: The Strait of Hormuz is the World's Most Important oil Transit Choke Point

The Strait of Hormuz (shown in the oval on the map), which is located between Oman and Iran, connects the Persian Gulf with the Gulf of Oman and the Arabian Sea. Hormuz is the world's most important oil choke point due to its daily oil flow of almost 17 million barrels per day (bbl/d) in 2011, up from between 15.5-16.0 million bbl/d in 2009-2010. Flows through the Strait in 2011 were roughly 35% of all seaborne traded oil, or almost 20% of oil traded worldwide.

On average, 14 crude oil tankers per day passed through the Strait in 2011, with a corresponding amount of empty tankers entering to pick up new cargos. More than 85% of these crude oil exports went to Asian markets, with Japan, India, South Korea, and China representing the largest destinations.
At its narrowest point, the Strait is 21 miles wide, but the width of the shipping lane in either direction is only two miles, separated by a two mile buffer zone. The Strait is deep and wide enough to handle the world's largest crude oil tankers, with about two-thirds of oil shipments carried by tankers in excess of 150,000 deadweight tons.

Several alternatives are potentially available to move oil from the Persian Gulf region without transiting Hormuz, but they are limited in capacity, in many cases are not currently operating or operable, and generally engender higher transport costs and logistical challenges.

• Alternate routes include the 745-mile Petroline, also known as the East-West Pipeline, across Saudi Arabia from Abqaiq to the Red Sea. The East-West Pipeline has a nameplate capacity of about 5 million bbl/d, with current movements estimated at about 2 million bbl/d.
• The Abqaiq-Yanbu natural gas liquids pipeline, which runs parallel to the Petroline to the Red Sea, has a 290,000-bbl/d capacity.
• Additional oil could also be pumped north via the Iraq-Turkey pipeline to the port of Ceyhan on the Mediterranean Sea, but volumes have been limited by the closure of the Strategic Pipeline linking north and south Iraq.
• The United Arab Emirates is also completing the 1.5 million bbl/d Abu Dhabi Crude Oil Pipeline that will cross the emirate of Abu Dhabi and end at the port of Fujairah just south of the Strait.
• Other alternate routes could include the deactivated 1.65-million bbl/d Iraqi Pipeline across Saudi Arabia (IPSA) and the deactivated 0.5 million-bbl/d Tapline to Lebanon.

EIA's World Oil Transit Chokepoints analysis brief contains additional information about other chokepoints, and the Middle East & North Africa overview contains additional information about countries in the region.

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ONG: Crude Oil Daily Technical Outlook For Wednesday Jan. 4th

The retreat from 101.77 was relatively brief and crude oil got strong support from 4 hours 55 EMA. Subsequent rally sent crude oil back to 103.18 so far. Intraday bias is back on the upside for 103.37 resistance. Break there will confirm that rise from 74.95 has resumed and should target 114.83 resistance next. On the downside, below 98.30 minor support will dampen this immediate bullish view and flip bias back to the downside to extend the consolidation from 103.37 instead.

In the bigger picture, fall from 114.83 has finished at 74.95 already. The structure suggests it's merely a correction or part of a consolidation pattern. Hence, rise from 33.2 is not completed yet. As long as 89.16/17 support holds, we'd favor a break of 114.83 resistance to resume the rally from 33.2. However, break of 89.16/17 will indicate that rebound from 74.95 has completed and whole fall from 114.83 is possibly resuming for another low below 74.95.

Nymex Crude Oil Continuous Contract 4 Hour, daily, Weekly and Monthly Charts


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Will Crude Oil be the New Gold Standard in 2012?

Crude oil is on the move. Tensions, technicals and Trade Triangles are propelling crude oil higher!

February crude oil closed higher on Tuesday as it extended the rally off December's low. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term.

If February extends the rally off December's low, November's high crossing at 103.28 is the next upside target. Closes below the 20 day moving average crossing at 98.70 would signal that a short term top has been posted.

First resistance is November's high crossing at 103.28. Second resistance is the May 2011 high crossing at 105.34. First support is the 20 day moving average crossing at 98.70. Second support is the 38% retracement level of the October-November rally crossing at 92.73.

With a Chart Analysis Score of +100, this market is in a strong upward trend. The crude oil market has resistance starting at $102 up to the $103 level. Long and intermediate term traders should be long this market with appropriate money management stops.

Monthly Trade Triangles for long term trends is bullish. Weekly Trade Triangles for intermediate term trends is bullish. And daily Trade Triangles for short term trends are bullish.

Just click here to check out Adam Hewisons first video of 2012.


Five Best Trade Ideas for the Next Two Weeks

Simple 2012 Trends to Profit from Next

Happy New Year, from everyone here at The Crude Oil Trader!

We hope this week's price action didn't catch you off guard? It was profitable but you really had to be on the ball to pocket the gains.....

Anyways, we just wanted to wish you a New Year and thank you for being part of our success in 2011 before it’s too late.

Have you heard of Chris Vermeulen? He is one of our partners here and he has been hitting the cover off the ball when it comes to trading the indexes, commodities and the dollar. His daily pre-market technical analysis videos are interesting, timely, educational and traded with amazing accuracy every week.

Chris is doing his onetime new year’s special offer giving his premium trading & education service away at half price until Dec 31st at midnight. At that price you just cannot go wrong.

Just Click Here to read Chris’ Trade Ideas for 2012

Have a happy and safe New Year's!
Ray @ The Crude Oil Trader

Five Best Trade Ideas for the Next Two Weeks

The last week of the year volume tends to be light due to the fact that big money traders are busy enjoying the holidays and waiting for their yearend bonuses.

I was not planning on doing much this week because of the low volume but after reviewing some charts and risk levels on my top 5 trading vehicles I could not help but share my findings with everyone last Friday.

You can see what I talked about on Friday here > Holiday Short Squeeze & Crude Oil Trade Idea

This Wednesday turned out to be an exciting session with all 5 of my trade ideas moving in our favour right on queue.

Charts of the 5 investments moving in the directions we anticipated …
- Dollar bounced off support

- Stocks are topping and selling off today

- Oil looks to have topped and is selling off

- Gold and Silver are moving lower

- VIX (Volatility Index) just bounced

Many of my readers took full advantage of my recent analysis and trade ideas which is great to hear.  All the different ways individuals used to make money from Friday’s analysis is mind blowin......

The most common trade is the oil one with most traders adding more to Tuesday when the price reached its key resistance level on the chart. Also many traders took partial profits Wednesday locking in 3% or more in two days using the SCO ETF.

It’s amazing how many people like to trade the vix using ETFs. The best trade from followers thus far was an 8% gain in TVIX which was bought 4 days ago anticipating the pop in volatility which I had been talking about last week. Keep in mind ETFs for trading the vix are not very good in general. I stay away from them, but TVIX is the best I found so far.

Currently stocks are oversold falling sharply from the pre-market highs. Meaning stocks have fallen too far too fast and a bounce is likely to take place Thursday.

Also we saw some panic selling hit the market today with 14 sellers to 1 buyer. That level tells me that the market needs some time to recover and build up strength for another selloff later this week or next. We will see this pause unfold when the SP500 drifts higher for a session or two with light buying volume. This will confirm sellers are in control and give us another short setup.

In my Wednesday morning video I explained how/where to set stops when using leveraged ETFs because I know 90% of traders using them do not have a clue as to how to do this and they get shaken out of their trades just before a top or bottom. 

I hope this helps you understand things more...... Over time you will pickup on a lot of new trading tips, tools and techniques with this free newsletter so just give it time and keep trades small until you are comfortable with my analysis.

Just click here to get My FREE Weekly Newsletter Here

Chris Vermeulen

Market Looks Poised to Reverse Hard to Downside Within Days

The market has been in the process of a near 13 Fibonacci week corrective rally since the October 4th 2011 lows at 1074 on the SP 500. So far the highs reached on the initial rally of 218 points were in October at 1292. That has remained the high water mark as we have consolidated over the last many weeks. I expect the market to complete this counter trend ABC bounce during the Dec 27th-29th window, followed by a good sized correction into Mid-January ahead of the earning season.

The patterns that I am seeing are based on crowd behavioral “Elliott Wave” analysis that I perform at my TMTF and ATP services, and this analysis now favors a 70% probability of a bearish decline beginning very shortly to the 1150’s area on the SP 500 index. To wit, Investment Advisors in recent surveys have over 45% Bulls and only 30% bears with typical tops forming around 47-48% Bulls in surveys. In addition, the rally has been on light volume and recent action seems to be forming a rising “bearish wedge” pattern at the same time.

Reversals in the market often come when few expect it whether they come near bottoms or tops. My most recent forecasts called a bullish turn after Thanksgiving Day when most were bearish in the 1160’s on the SP 500 index. We then rallied 109 points to a 1267 high, which we are retesting now. As we recently pulled back into the low 1200’s, I again said to watch for a major market turn on Dec 20th. We then immediately rallied so far into the 1270 area from the 1203 lows.

Below is a chart I sent to my subscribers on Dec 24th, having projected a continuing rally into the 27th-29th window of trade. If you’d like to benefit from our market turn calls and crowd behavioral based pattern analysis on the SP 500 and Gold and Silver, check us out at Market Trend Forecast to sign up for our free forecast or get 33% holiday discount on our premium gold and silver forcecast.

David A Banister

Get Market Trend Forecast Big Picture Index & Commodity Forecasts Here

Merry Christmas Crude Oil Bulls.....From Iran to You!

Crude oil bulls get a Christmas gift from our friends in Iran, but will it hold? Oil closed above $100 a barrel for the first time in nearly two weeks on geopolitical news out of Iran along with the perception of U.S. consumer confidence. The higher close extended the rally off last week's low. This high range close sets the stage for a steady to higher opening on Wednesday.

Stochastics and the RSI remain bullish signaling that sideways to higher prices in crude oil are possible near term. If February extends last week's rally, the reaction high crossing at 102.56 is the next upside target. If February renews the decline off November's high, the 50% retracement level of the October-November rally crossing at 89.46 is the next downside target.

First resistance is the reaction high crossing at 102.56. Second resistance is November's high crossing at 103.28. First support is the 38% retracement level of the October-November rally crossing at 92.73. Second support is the 50% retracement level of the October-November rally crossing at 89.46.

A Play on SCO This Week.....a Short Squeeze & Crude Oil Trade Idea