This should create some controversy, when is the best time of day to profit?
Crude oil prices dropped near their lows for the year following warnings of a “severe recession” in Europe and an apparent easing of tensions over Iran’s nuclear program.
Benchmark U.S. crude on Tuesday lost 91 cents to end the day at $91.66 per barrel in New York while Brent crude fell by 40 cents to end at $108.41 per barrel in London. Both contracts hit a low for 2012 on Friday at $91.48 and $107.14, respectively.
Oil has declined almost every day this month as elections in Greece and France threatened existing plans to fix the eurozone economy A top economist for the Organization for Economic Cooperation and Development warned Tuesday that the eurozone could fall into recession this year if leaders fail to stimulate the economy. .
If that happens, it would stunt growth in world oil demand at a time when supplies are expanding.
Saudi Arabia, Iraq and Libya are producing and exporting more oil this year. And analysts say Iran’s oil exports could keep flowing if it lets international inspectors into its nuclear facilities as part of a new deal announced Tuesday.
Western leaders fear Iran is building a nuclear weapon. They’ve been trying to cut off Iran’s oil exports this year to pressure the country to allow in nuclear inspectors. Many nations already have stopped buying Iranian crude and Europe is expected to embargo all oil imports from Iran in July.
Iran says its nuclear program is for peaceful purposes only, but it so far has barred independent inspectors. If it allows them in, Europe may reward Iran by canceling the embargo, said Michael Lynch, president of Strategic Energy & Economic Research.
“If they don’t end it, it could be significantly delayed,” Lynch said.
Fears of a protracted standoff with Iran had helped push benchmark crude near $110 per barrel in February. Prices have since fallen below levels of early November, when the United Nations first warned of a potential nuclear threat from Iran.
Uninterrupted Iranian exports could boost world oil supplies to an average of 89.15 million barrels per day, according to the latest projections from the Energy Information Administration. That would be more than enough to meet world demand.
At the pump, U.S. gasoline prices fell nearly a penny to $3.68 per gallon, according to auto club AAA, Wright Express and Oil Price Information Service. A gallon of regular unleaded has dropped by 25.6 cents since peaking this year in early April.
In other futures trading, natural gas added 9.8 cents, up 4 percent, to finish at $2.707 per 1,000 cubic feet. Natural gas prices have jumped by 42 percent since hitting a 10 year low on April 19 as supplies declined. Weather forecasters also predicted a toasty Memorial Day weekend across much of the country, which implies that people will crank up their air conditioners and power plants will burn more natural gas for electricity.
Heating oil and wholesale gasoline were both flat, ending the day at $2.8614 and $2.937 per gallon, respectively.
20 Survival Skills for the Trader
Tuesday, May 22, 2012
Can the Stock Market Reverse and Rally to Highs?
Do the Bulls still stand a chance to make another run?
That is the question this weekend after we saw the 1340, 1322 pivots crashed right through following the “SP 500 Bear Case” weekend report on May 13th I sent to subscribers with a chart last weekend (May 13th SP 500 at 1353).
We ended the week with the SP 500 falling from 1353 to about 1292 and the US Dollar having rallied 13 of the past 15 days to the upside. We also have The Mclellan Oscillator at extreme oversold levels as in the November 2011 lows and close to the August 2011 lows. The Sentiment gauges are running at only 24% Bulls as opposed to the historic 39% averages, and the Percentage of NYSE listed stocks trading above the 50 day moving average plummeted to 12%. That is about as low as it has been during this bull market, other than last August when we hit 5%.
So that means that the sentiment/human behavioral ingredients are actually in place for a marked rally to the upside. What we examine this week is whether that can still happen and what type of Elliott Wave pattern would we need to see to validate it.
We can still make a case that this correction of 130 points from 1422 to 1292 (about 9.1% similar to many Bull market corrections since 2009 lows) is a wave 4 correction of waves 1-3. Wave 1-3 rallied in total from 1074-1422 and a 38% retracement of that entire cycle would put us right around 1291/92 pivots.
So below we have the chart that the Bulls would hang onto as possible for a dramatic recovery to new highs past 1422 and onward to 1454 or so. This needs to begin very shortly though and much below 1285 we can wipe this idea off the slate in my opinion.
So, last weekends Bear View is now a 50% probability and the Bullish count below is also 50%. The good news is I think we will know which one is taking control very early in the week. This is probably not a good time to place a big bet just yet in either direction, we are at an inflection point.
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Phil Flynn: Downgrade Dilemma
The oil market wanted to believe that the worst was over for the global economy, bouncing back from a 6 month low but a downgrade of Japan means the market will have to struggle to find the lower end of our trading range. As the June contract trades its last, more drama will ensue as the market awaits talks with Iran and their nuclear program and perhaps a Japan downgrade won’t be enough to keep the oil down.
Oh Fitch, talk about the timing of you Japanese downgrade. Oil stated to fall resuming its massive retreat as Fitch lowered sovereign debt rating to A+ with a negative outlook. Oil traders reacted as the dollar rallied and demand expectations again began to fall. It appears that oil may not have found the absolute low of its trading range just yet.
Of course the offset to that will be worries surrounding Iran and the nuclear talks. The market has been hopeful that a conflict can be avoided. This comes after the US Senate keeps the pressure on by voting more sanctions on the sanction overwhelmed regime. Reuters News reported the U.S. Senate unanimously approved on Monday a package of new economic sanctions on Iran's oil sector just days ahead of a meeting in Baghdad between major world powers and Tehran.
The pressure became more apparent when Iran said that they would allow the International Atomic Energy agency to allow weapon inspectors into sites that are suspected to be producing materials needed to make a nuclear weapon. CBS and the AP reported that, “despite some differences, a deal has been reached with Iran that will allow the U.N. nuclear agency to restart a long-stalled probe into suspicions that Tehran has secretly worked on developing nuclear arms, the U.N. nuclear chief said Tuesday.
The news from International Atomic Energy Agency chief Yukiya Amano, who returned from Tehran on Tuesday, comes just a day before Iran and six world powers meet in Baghdad for negotiations and could present a significant turning point in the heated dispute over Iran's nuclear intentions. The six nations hope the talks will result in an agreement by the Islamic Republic to stop enriching uranium to a higher level that could be turned quickly into the fissile core of nuclear arms.”
Yet will oil stay optimistic if Iran at any point tries to limit what the inspectors can do? We have seen this cat and mouse game many times before not only with Iran, but the king of the cat and mouse, the late Saddam Hussein. While oil traders can remain optimistic can Israel?
The Wall Street Journal is asking whether some investors wagering on natural-gas prices are losing their spark. The Journal says that, “natural-gas prices have jumped as much as 44% since sinking to decade lows last month. Much of that rally had been powered by rising demand from utilities, which had taken advantage of the low prices by using more natural gas instead of coal. But the higher prices are making coal competitive once again. Coal prices are down 22% since the start of the year."
The Journal says that utilities are continuously fine-tuning how much coal and natural gas they're burning to generate electricity. In recent months, they've increasingly favored natural gas due to the steep drop in natural gas prices. Utilities keep the breakdown of their fuel use a trade secret. How utilities will respond to higher gas prices has spurred debate among investors. Some analysts and traders say the rally threatens to erode natural gas recent gains in market share as utilities switch back to coal, and that could limit any further price increases. A must read in the Journal Today!
To sign up for Phils Daily Trade Levels! Just call him 800-935-6487 or email him at pflynn@pfgbest.com
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Monday, May 21, 2012
Warm Weather and Low Natural Gas Prices Dampen Spot Electricity Prices This Winter
E-Minis Unfair Advantage....Have You Watch This Yet?
The combination of one of the warmest winters (November-March) in decades and low spot natural gas prices contributed to low wholesale electric prices at major market locations during the winter of 2011-2012 (see chart below). Warm weather kept electric system load low across the East Coast and helped dampen the need for coal fired generation. Natural gas generation was up significantly to take advantage of low natural gas prices. Reduced nuclear generation due to outages and reduced hydropower generation both served to moderate declining electricity prices in much of the country.
On peak, wholesale electricity prices generally ranged from $20-$50 per megawatt hour last winter, with some exceptions. Electricity prices dropped during the winter, especially starting in January, as spot natural gas prices neared their lowest levels in the past decade.
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The combination of one of the warmest winters (November-March) in decades and low spot natural gas prices contributed to low wholesale electric prices at major market locations during the winter of 2011-2012 (see chart below). Warm weather kept electric system load low across the East Coast and helped dampen the need for coal fired generation. Natural gas generation was up significantly to take advantage of low natural gas prices. Reduced nuclear generation due to outages and reduced hydropower generation both served to moderate declining electricity prices in much of the country.
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Crude Oil Bulls Start the Week Higher, Bears Still Have the Advantage
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Crude oil closed higher due to short covering on Monday as it consolidated some of this month's decline. The high range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term. If June extends this month's decline, the 62% retracement level of the 2011-2012 rally crossing at 89.90 is the next downside target. Closes above the 20 day moving average crossing at 98.88 are needed to confirm that a low has been posted. First resistance is the 10 day moving average crossing at 94.53. Second resistance is the 20 day moving average crossing at 98.88. First support is today's low crossing at 90.84. Second support is the 62% retracement level of the 2011-2012 rally crossing at 89.90.
20 Survival Skills for the Trader
Natural gas closed lower due to profit taking on Monday as it consolidates some of the rally off April's low. The low range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term. If June extends the rally off last week's low, February's high crossing at 3.040 is the next upside target. Closes below the 20 day moving average crossing at 2.388 would signal that a short term top has been posted. First resistance is last Friday's high crossing at 2.759. Second resistance is February's high crossing at 3.040. First support is the 10 day moving average crossing at 2.535. Second support is the 20 day moving average crossing at 2.388.
6 Things Successful Traders Have in Common
Gold closed slightly lower on Monday but remains above the 10 day moving average crossing at 1579.00. The mid-range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI have turned bullish signaling a low might be in or is near. Closes above the 20 day moving average crossing at 1615.10 are needed to confirm that a short term low has been posted. If June renews the decline off February's high, the 38% retracement level of the 2008-2011 rally crossing at 1487.50 is the next downside target. First resistance is the 20 day moving average crossing at 1615.10. Second resistance is this month's high crossing at 1672.30. First support is last Wednesday's low crossing at 1526.70. Second support is the 38% retracement level of the 2008-2011 rally crossing at 1487.50.
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Crude oil closed higher due to short covering on Monday as it consolidated some of this month's decline. The high range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term. If June extends this month's decline, the 62% retracement level of the 2011-2012 rally crossing at 89.90 is the next downside target. Closes above the 20 day moving average crossing at 98.88 are needed to confirm that a low has been posted. First resistance is the 10 day moving average crossing at 94.53. Second resistance is the 20 day moving average crossing at 98.88. First support is today's low crossing at 90.84. Second support is the 62% retracement level of the 2011-2012 rally crossing at 89.90.
20 Survival Skills for the Trader
Natural gas closed lower due to profit taking on Monday as it consolidates some of the rally off April's low. The low range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term. If June extends the rally off last week's low, February's high crossing at 3.040 is the next upside target. Closes below the 20 day moving average crossing at 2.388 would signal that a short term top has been posted. First resistance is last Friday's high crossing at 2.759. Second resistance is February's high crossing at 3.040. First support is the 10 day moving average crossing at 2.535. Second support is the 20 day moving average crossing at 2.388.
6 Things Successful Traders Have in Common
Gold closed slightly lower on Monday but remains above the 10 day moving average crossing at 1579.00. The mid-range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI have turned bullish signaling a low might be in or is near. Closes above the 20 day moving average crossing at 1615.10 are needed to confirm that a short term low has been posted. If June renews the decline off February's high, the 38% retracement level of the 2008-2011 rally crossing at 1487.50 is the next downside target. First resistance is the 20 day moving average crossing at 1615.10. Second resistance is this month's high crossing at 1672.30. First support is last Wednesday's low crossing at 1526.70. Second support is the 38% retracement level of the 2008-2011 rally crossing at 1487.50.
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Sunday, May 20, 2012
Saudi Arabia Edges Out Russia as the Biggest Oil Producer
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Saudi Arabia boosted crude production close to a 31 year high in March, overtaking Russia as the world’s largest oil producer for the first time in six years, according to the Joint Organization Data Initiative.
Saudi crude exports rose 3 percent in March, reaching the highest level in five years as Iran cut shipments, according to government statistics posted today on the initiative’s website.
Saudi Arabia, OPEC’s largest producer, increased daily output to 9.923 million barrels in March, up 0.7 percent to the second highest level since at least 1980, according to the initiative. That topped output from Russia, which pumped 9.920 million barrels a day, for the first time since February 2006, according to the data.
The initiative, known as JODI, is supervised by the Riyadh based International Energy Forum and compiles data provided by member governments. The IEF is a group of nations accounting for more than 90 percent of global oil and natural gas supply and demand, established as a forum for producing and consuming countries to discuss energy security.....Read the entire article.
This should create some controversy, when is the best time of day to profit?
Saudi crude exports rose 3 percent in March, reaching the highest level in five years as Iran cut shipments, according to government statistics posted today on the initiative’s website.
The initiative, known as JODI, is supervised by the Riyadh based International Energy Forum and compiles data provided by member governments. The IEF is a group of nations accounting for more than 90 percent of global oil and natural gas supply and demand, established as a forum for producing and consuming countries to discuss energy security.....Read the entire article.
This should create some controversy, when is the best time of day to profit?
Where is Gold, Natural Gas and Crude Oil Headed This Week
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Is the gold rally for real or just a short covering bounce? CNBC's Sharon Epperson discusses the Friday's activity in the commodities markets and looks ahead to where crude oil and precious metals are likely headed next week.
This should create some controversy, when is the best time of day to profit?
Is the gold rally for real or just a short covering bounce? CNBC's Sharon Epperson discusses the Friday's activity in the commodities markets and looks ahead to where crude oil and precious metals are likely headed next week.
This should create some controversy, when is the best time of day to profit?
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If you have a trading goal, but the lack a proven system for getting there, grab veteran trader Todd Mitchell’s step by step blueprint for setting up a profitable trade right now.
Get Todd's "30 Minute E-Mini Breakout, valued at $497"
He’s fine tuned and perfected a system for making money during just the first 30 minutes of the trading day. Yes, only 30 minutes....Please don’t miss out on this.
If you visit this website right now, you can download this strategy at no cost to you whatsoever. Everything you will need to know about trading this strategy is revealed to you. Nothing is being held back.
Take a few minutes to just click here and watch the 30 Minute E-Mini Breakout video and see what I mean.
Todd Mitchell is only making this free report and trading tutorial available for a limited time.
Get the free strategy now ... trade it tomorrow.
Saturday, May 19, 2012
Natural Gas Consumption Reflects Shifting Sectoral Patterns
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U.S. natural gas consumption since 1997 reflects shifting patterns. Total U.S. natural gas consumption rose 7% between 1997 and 2011, but this modest growth masks bigger changes in individual sectors. Electric power is now the largest natural gas consuming sector and it shows perhaps the greatest sensitivity to price changes. The graphics below highlight key factors that influence natural gas consumption.
The electric power sector has the flexibility to shift some amount of baseload power generation, much of which has traditionally been fueled by coal, to underutilized natural gas generators without requiring additional investments in infrastructure.
Natural gas consumption for power generation is expanding. An earlier Today in Energy article noted that consumption of natural gas for electric power (or "power burn") has exceeded natural gas consumption in the industrial sector since early 2009. The power sector added a significant amount of new natural gas fired generating capacity over the last decade, much of which was in the form of efficient combined cycle units.
For many years, while coal fired generation was less expensive, those natural gas fired combined cycle units were used at relatively low rates. Recently, with natural gas prices declining and coal prices rising, dispatching natural gas generators in some parts of the country has become increasingly competitive with running coal generators. Competition between natural gas and coal appeared first in the Southeast, where coal fired power was more expensive due to the cost of transporting coal over long distances.
In the industrial sector, natural gas consumption increased in 2010 and 2011, reversing a trend of declining consumption that lasted from the mid-1990s to 2009. Natural gas is used in the industrial sector and manufacturing subsector for process heating, steam generation, onsite electricity generation, space heating, and petrochemical processing.
The downward trend in natural gas prices has lowered the cost of a key input for some industries. However, the short term flexibility to take immediate advantage of low natural gas prices is limited in this sector, because many manufacturers that relied heavily on natural gas as fuel or feedstock closed down or moved abroad in the late 1990s and early 2000s in the face of rising natural gas prices. For various reasons, some of the remaining firms may switch fuel to natural gas, and others may never switch regardless of fuel costs, leaving a wide range of dependencies on natural gas prices (see Tables 10.15 and 10.21 from EIA's Manufacturing Energy Consumption Survey).
Domestic and global macroeconomic trends affect industrial activity, which is often tracked by industrial indices. However, some U.S. manufacturers (e.g., petrochemicals) that use natural gas derived feedstocks (e.g., ethane) are enjoying a competitive advantage while international competitors consume more expensive, oil derived feedstocks.
Residential and commercial consumption of natural gas is primarily for space heating, water heating, and cooking; the most influential short term factor for these sectors is weather (quantified here as heating degree-days).
The residential and commercial sectors have limited short-term flexibility to take advantage of inexpensive natural gas, as heating systems can be expensive to modify and are replaced infrequently. Over longer timescales, the number of households using natural gas for space heating has increased, for example, in the Northeast, households are switching their heating fuel from heating oil to natural gas. However, the increasing efficiency of home heating systems (lower average gas use per customer) masks some of the effect of the increasing number of natural gas customers, even when normalized for weather.
Seasonal patterns in natural gas consumption appear in all sectors. Colder winter weather means more natural gas consumption for space heating, and warmer summer weather leads to increased consumption in the power sector with increasing demand for air conditioning.
This should create some controversy, when is the best time of day to profit?
U.S. natural gas consumption since 1997 reflects shifting patterns. Total U.S. natural gas consumption rose 7% between 1997 and 2011, but this modest growth masks bigger changes in individual sectors. Electric power is now the largest natural gas consuming sector and it shows perhaps the greatest sensitivity to price changes. The graphics below highlight key factors that influence natural gas consumption.
The electric power sector has the flexibility to shift some amount of baseload power generation, much of which has traditionally been fueled by coal, to underutilized natural gas generators without requiring additional investments in infrastructure.
Natural gas consumption for power generation is expanding. An earlier Today in Energy article noted that consumption of natural gas for electric power (or "power burn") has exceeded natural gas consumption in the industrial sector since early 2009. The power sector added a significant amount of new natural gas fired generating capacity over the last decade, much of which was in the form of efficient combined cycle units.
For many years, while coal fired generation was less expensive, those natural gas fired combined cycle units were used at relatively low rates. Recently, with natural gas prices declining and coal prices rising, dispatching natural gas generators in some parts of the country has become increasingly competitive with running coal generators. Competition between natural gas and coal appeared first in the Southeast, where coal fired power was more expensive due to the cost of transporting coal over long distances.
Domestic and global macroeconomic trends affect industrial activity, which is often tracked by industrial indices. However, some U.S. manufacturers (e.g., petrochemicals) that use natural gas derived feedstocks (e.g., ethane) are enjoying a competitive advantage while international competitors consume more expensive, oil derived feedstocks.
Residential and commercial consumption of natural gas is primarily for space heating, water heating, and cooking; the most influential short term factor for these sectors is weather (quantified here as heating degree-days).
The residential and commercial sectors have limited short-term flexibility to take advantage of inexpensive natural gas, as heating systems can be expensive to modify and are replaced infrequently. Over longer timescales, the number of households using natural gas for space heating has increased, for example, in the Northeast, households are switching their heating fuel from heating oil to natural gas. However, the increasing efficiency of home heating systems (lower average gas use per customer) masks some of the effect of the increasing number of natural gas customers, even when normalized for weather.
Seasonal patterns in natural gas consumption appear in all sectors. Colder winter weather means more natural gas consumption for space heating, and warmer summer weather leads to increased consumption in the power sector with increasing demand for air conditioning.
This should create some controversy, when is the best time of day to profit?
ONG: Crude Oil Weekly Technical Outlook
Crude oil dropped further to as low as 90.93 last week and broke mentioned 92.52 support. Initial bias remains on the downside this week and further fall should be seen to 61.8% retracement of 74.95 to 100.55 at 88.55. Strong support is anticipated at this 88.55 fibonacci level to bring rebound. On the upside, above 94.16 minor resistance will turn bias neutral and bring recovery. But upside should be limited by 100.68 support turned resistance and bring another fall.
In the bigger picture, price actions from 114.84 are developing into a three wave consolidation pattern. And, the third leg should have already started at 110.55. Deeper fall should eventually be seen to 74.95 low and possibly below. Though, we'd likely see strong support from 64.23 cluster level, 61.8% retracement of 33.20 to 114.83 at 64.38 and bring another medium term rise. Hence we'll look for reversal signal below 74.95.
In the long term picture, crude oil is in a long term consolidation pattern from 147.27, with first wave completed at 33.2. The corrective structure of the rise from 33.2 indicates that it's second wave of the consolidation pattern. While it could make another high above 114.83, we'd anticipate strong resistance ahead of 147.24 to bring reversal for the third leg of the consolidation pattern.
Nymex Crude Oil Continuous Contract 4 Hour, Daily, Weekly and Monthly Charts
This should create some controversy, when is the best time of day to profit?
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