Bernanke Speaks....and they all fall down!

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The U.S. stock indexes closed mixed today. The bulls were disappointed with Federal Reserve Chairman Ben Bernanke's speech to the Joint Economic Committee of the U.S. Congress. Bernanke said the U.S. is facing economic headwinds, especially due to the European Union debt crisis, but offered up no specifics on any fresh monetary stimulus package to promote more economic growth. The restrained tone of Bernanke's speech disappointed bulls who wanted immediate gratification on economic stimulus.

However, Bernanke at this time holding his cards close to his vest on the matter did not surprise most market watchers, many of whom still reckon the Fed will at some point down the road provide fresh monetary policy easing. The “Bernanke bust” overshadowed several significant market place developments that occurred earlier Thursday, led by news China has cuts its interest rate by 0.25% in an effort to stimulate its economy.

Crude oil closed down $0.85 a barrel at $84.17 today. Prices closed near the session low today. The crude bears have the solid overall near term technical advantage. There are still no early technical clues to suggest a market bottom is close at hand.

Natural gas closed down 14.6 cents at $2.275 today. Prices closed near the session low and hit a fresh six week low today. Bears have the solid overall near term technical advantage and gained more downside momentum today.

Gold futures closed down $44.10 an ounce at $1,590.10 today. Prices closed nearer the session low today and were pressured by the failure of Fed chief Bernanke to offer fresh monetary stimulus at today's testimony to Congress. The gold market bulls quickly lost their technical momentum today. Bears regained the slight near term technical advantage in gold.

The U.S. dollar index closed down 14 points at 82.63 today. Prices closed near mid range today and saw more profit taking. No chart damage has occurred this week but the bulls are fading a bit and a bearish weekly low close on Friday would begin to hint that a market top is in place. Bulls do still have the overall near term technical advantage.

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Where is Crude Oil and Precious Metals Likely Headed on Friday

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CNBC's Sharon Epperson discusses Thursday's activity in the commodities markets and looks at where crude oil and precious metals are likely headed on Friday.



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CME Group....Morning Crude Oil and Natural Gas Market Report

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July crude oil prices reversed early losses during the initial morning hours in response to an unexpected Chinese interest rate cut. This morning's announcement by the PBOC was the first action taken by central bankers to support growth. Meanwhile, the crude oil market drafted some support from yesterday's EIA inventory data that showed a draw of 111,000 barrels. However, an unexpected build in Cushing Oklahoma supplies and builds in gasoline and distillate supplies might have tempered the upside reaction in July crude oil.

EIA crude stocks are 15.668 million barrels above year ago levels and 37.31 million barrels above the five year average. Crude oil imports for the week stood at 8.957 million barrels per day compared to 9.056 million barrels the previous week. The refinery operating rate saw a significant increase of 1.9% to 91.0%, which compared to 87.2% last year and the five year average of 88.0%.

July natural gas prices registered a lower low in early morning action as they continued the decline from yesterday's high. While the natural gas market appeared to draft a measure of support from recent weather forecasts bolstering the case for higher air conditioning demand, there appears to be a more dominant negative force hanging over the market. Expectations for this morning's report are for an injection of around 55 bcf.

Posted courtesy of The CME Group

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Little Fed [Atlanta President] Speaks and Crude Oil market Listens

Have Gold, Silver and Mining Stocks Bottomed?

So this is what happens when a fed president out of ATLANTA speaks? Crude oil closed higher due to short covering on Wednesday as it bounced off the 87% retracement level of the 2011-2012 rally crossing at 81.36. The mid range close sets the stage for a steady opening when Thursday's night session begins. Stochastics and the RSI are oversold and are turning neutral to bullish signaling that sideways to higher prices are possible near term. Closes above the 20 day moving average crossing at 90.81 are needed to confirm that a low has been posted. If July extends this month's decline, last October's low crossing at 77.05 is the next downside target. First resistance is the 10 day moving average crossing at 87.31. Second resistance is the 20 day moving average crossing at 90.81. First support is Monday's low crossing at 81.21. Second support is last October's low crossing at 77.05.

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Natural gas closed lower on Wednesday and the low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are oversold and are turning neutral to bullish signaling that sideways to higher prices are possible near term. Closes above the 20 day moving average crossing at 2.576 would confirm that a short term low has been posted. If July renews last week's decline, the reaction low crossing at 2.166 is the next downside target. First resistance is the 20 day moving average crossing at 2.574. Second resistance is the reaction high crossing at 2.838. First support is last Friday's low crossing at 2.313. Second support is the reaction low crossing at 2.166.

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Gold closed higher on Wednesday but remains below the 38% retracement level of this year's decline. The low range close sets the stage for a steady to lower opening when Thursday's night session begins trading. Stochastics and the RSI remain bullish signaling sideways to higher prices are possible near term. If August extends last Friday's rally, April's high crossing at 1674.30 is the next upside target. If August renews the decline off February's high, the 75% retracement level of the 2010-2011 rally crossing at 1461.30 is the next downside target. First resistance is last Friday's high crossing at 1632.00. Second resistance is April's high crossing at 1674.30. First support is the 20 day moving average crossing at 1581.10. Second support is May's low crossing at 1529.30.

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Have Gold, Silver and Mining Stocks Bottomed?

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On Friday, the price action in gold caught the attention of most market participants as gold put in a monster move to the upside in light of risk assets such as the S&P 500 selling off sharply. In fact, gold futures rallied nearly $58 per troy ounce on Friday (+3.71%) while the S&P 500 Index sold off over 32 handles (-2.46%).

Monday saw some profit taking in gold and silver futures as Friday’s monster gains had to be digested. Short term traders were locking in profits, but overall the price action remains quite bullish at the moment. The gold miners remained extremely strong into the bell on Monday as buyers bid up prices in the afternoon to push them nearly 1.65% higher for the trading session.

Long time readers understand that I am a gold bull in the longer term and have been for quite some time. Unlike some gold bugs, I will discuss the downside in precious metals from time to time even though it generally fills up my email inbox with some rather rude and hate filled emails.

My view of gold and silver is that they are senior currencies. With that being said, I monitor the value of gold in U.S. Dollars and recognize that a stronger U.S. Dollar in the longer term is not necessarily bullish for gold. Yes both gold and the Dollar can rally together, but mutualistic price action generally does not last for long periods of time. Obviously I monitor the price action of the U.S. Dollar Index futures on a regular basis to help me gauge when the Dollar is at key turning points regarding.....Here is the entire article, charts and video.


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Bulls are Hopeful 81.36 is the Magic Support Number....Probably Not!

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The numbers just don't add up for the bulls as crude oil closed higher due to short covering on Tuesday as it bounced off the 87% retracement level of the 2011-2012 rally crossing at 81.36. The mid range close sets the stage for a steady opening when Wednesday's night session begins. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term. If July extends this month's decline, last October's low crossing at 77.05 is the next downside target. Closes above the 20 day moving average crossing at 91.41 are needed to confirm that a low has been posted. First resistance is the 10 day moving average crossing at 87.96. Second resistance is the 20 day moving average crossing at 91.41. First support is Monday's low crossing at 81.21 and second support is quite a ways below that at last October's low crossing at 77.05.

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Natural gas closed higher due to short covering on Tuesday as it consolidated some of last week's decline. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term. If July extends last week's decline, the reaction low crossing at 2.166 is the next downside target. Closes above the 20 day moving average crossing at 2.576 would confirm that a short term low has been posted First resistance is the 20 day moving average crossing at 2.576. Second resistance is the reaction high crossing at 2.838. First support is last Friday's low crossing at 2.313. Second support is the reaction low crossing at 2.166.

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Gold closed higher on Tuesday as it consolidates below the 38% retracement level of this year's decline. The mid range close sets the stage for a steady opening when Wednesday's night session begins trading. Stochastics and the RSI remain bullish signaling sideways to higher prices are possible near term. If August extends last Friday's rally, April's high crossing at 1674.30 is the next upside target. If August renews the decline off February's high, the 75% retracement level of the 2010-2011 rally crossing at 1461.30 is the next downside target. First resistance is last Friday's high crossing at 1632.00. Second resistance is April's high crossing at 1674.30. First support is the reaction low crossing at 1529.30. Second support is the 75% retracement level of the 2010-2011 rally crossing at 1461.30.

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NOAA Predicts a Near Normal 2012 Atlantic Hurricane Season

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On May 24, 2012, the National Oceanic and Atmospheric Administration's Climate Prediction Center said that, for the six month hurricane season beginning June 1, there is a 70% chance of 9 to 15 named storms in the Atlantic Basin, of which 4 to 8 may strengthen to hurricanes. Of those, 1 to 3 may become major hurricanes (Category 3, 4, or 5). During the hurricane season from 1981 through 2010, the Atlantic basin averaged 12 named storms and 6 hurricanes each year, 3 of which were major hurricanes.

As of June 1, 2012, there have been two named Atlantic Basin storms (Tropical Storms Alberto and Beryl).



Tropical storms and hurricanes can temporarily disrupt the U.S. oil and natural gas supply chain (producing fields, gathering, processing, refining, and transportation), especially in the Gulf Coast region. The U.S. Energy Information Administration's Federal Offshore Gulf of Mexico reporting region (GOM Fed) is a key component of U.S. crude oil and natural gas production.

The GOM Fed region provided nearly one quarter of total U.S. crude oil production in 2011, the highest share among Federal offshore regions and second only to Texas among individual states. Driven by increasing volumes associated with deepwater and ultra-deepwater development activity, the GOM Fed region helped to reverse a decades-long decline in U.S. crude oil production in 2009. GOM Fed region production declined in 2010 and 2011, largely the result of suspended drilling activity following the Macondo oil spill. Exploration and development operations have since resumed, however.

The potential impact of hurricanes on U.S. natural gas supply is comparatively muted, as the GOM Fed region accounts for a relatively modest portion of total U.S. natural gas production. The GOM Fed region supplied about 8% of total U.S. marketed natural gas production in 2011, down significantly from a decade ago, when the region had an approximate one quarter share. The GOM Fed region's relative contribution has diminished as a result of both gradually declining offshore production and significant increases in Lower 48 output, due primarily to expanding shale gas developments in several areas of the country.

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Monday Mathem Chart and Live Video Analysis

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This week should be just exciting with the markets reaching extreme levels for bonds, gold, SP500, and crude oil. This morning’s video covers it in detail.

Pre Market Analysis Points....

* US dollar index in consolidation and also forming a mini head and shoulders pattern which if the neckline is broken points to lower prices for the dollar that may last 1-2 sessions.

* Gold and silver are both trading at resistance levels and are headline driven at this point. Anything could happen going forward so I remain on the side for now.

* Crude oil continues to show weakness but is now trading within a major support level. I am keeping my eye on the intraday charts for a reversal pattern to play a bounce/rally this week.

* Bonds continue to rise with record low yields… This shows there is real panic fear in the market and lower prices may continue for another week or two.

* The volatility index while elevated is still overall trading low. This means more downside is possible investors and baby boomers start to roll more of their money out of stocks and into bonds.

* SP500 sold down another 1% in futures trading after the closing bell which was very bearish. This morning we have seen the dollar index pullback and that has allowed the SP500 to recover the 1% post market drop on Friday.....Read the entire article and watch todays video.



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Crude Oil Bulls Get Some Help From 87% Retracement Level

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Crude oil closed higher due to short covering on Monday as it bounced off the 87% retracement level of the 2011-2012 rally crossing at 81.36. The high range close sets the stage for a steady to higher opening when Tuesday's night session begins. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term. If July extends this month's decline, last October's low crossing at 77.05 is the next downside target. Closes above the 20 day moving average crossing at 92.14 are needed to confirm that a low has been posted. First resistance is the 10 day moving average crossing at 88.86. Second resistance is the 20 day moving average crossing at 92.14. First support is today's low crossing at 81.21. Second support is last October's low crossing at 77.05.

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Natural gas closed higher due to short covering on Monday as it consolidated some of last week'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 July extends last week's decline, the reaction low crossing at 2.166 is the next downside target. Closes above the 20 day moving average crossing at 2.576 would confirm that a short term low has been posted First resistance is the 20 day moving average crossing at 2.576. Second resistance is the reaction high crossing at 2.838. First support is last Friday's low crossing at 2.313. Second support is the reaction low crossing at 2.166.

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Gold closed lower on Monday as it consolidates some of last Friday's rally. The low range close sets the stage for a steady to lower opening when Tuesday's night session begins trading. Stochastics and the RSI remain bullish signaling sideways to higher prices are possible near term. If August extends last Friday's rally, April's high crossing at 1674.30 is the next upside target. If August renews the decline off February's high, the 75% retracement level of the 2010-2011 rally crossing at 1461.30 is the next downside target. First resistance is last Friday's high crossing at 1632.00. Second resistance is April's high crossing at 1674.30. First support is the reaction low crossing at 1529.30. Second support is the 75% retracement level of the 2010-2011 rally crossing at 1461.30.

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MLP's....The Retail Investor Can Level The Playing Field

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One my favorite oil and commodities trader is Dan Dicker of MercBloc. Today he is bringing it to our attention how the retail investor can level the playing field by taking advantage of the pull back in energy right now. We have always loved the MLP's whether the market is up or down. We just don't see a downside either way.



20 Survival Skills for the Trader