Monday Precious Metals and Equity Prices are Marked UP!

The past couple months have been a roller coaster ride for investors and traders. Overseas headline news has made investing and trading more difficult than normal because of prices gaping up or down at the opening bell several times per week. The next two weeks are going to be even crazier because of the Greek election and Spanish bank bailout.

This past weekend it looks as though the Spanish banks are getting bailed out which will be similar to the 2008 – 09 bailout we saw in the United States. This news has marked up stocks and commodity prices during overnight trading Sunday. The major indexes are up 1-2% across the board.

Looking at the technical and sentiment this is what I feel will take place and how it can be attacked…

Major stock indexes and commodities will be trading at resistance at the open on Monday.

And the dollar which was hit hard in overnight trading Sunday is now trading at support. A bounce in the dollar and sellers stepping in at resistance could pull the market down for session or two.

The big questions is what do traders do with this jump stocks and commodities?

The first 15 minutes of Monday’s session short sellers will be panicking out of their positions and getting stopped out. Once the dust starts to settle resistance and an oversold dollar may do their part and force the market lower later in the day.

Now if we add sentiment into this picture thinking of the masses covering their short positions in a big way we know from past events that when the masses all trade the same direction the market quickly reverses goes the opposite direction in the short term for 1-3 days.

So what does one do if they are short the market this week as I am in this boat?

Personally, I would wait 15-30 minutes to let things unfold and see what the price, volume and sentiment is doing. Keep in mind morning trends tend to stall out and roll over at 10am ET, or 11:30am ET. Knowing that; I will be watching price and volume to see if there is a bearish intraday pattern unfolding that looks as though it will unfold within those time frames. If so, I will hold my position and look for a reversal back down where I can exit at a lower price hopefully. But for all we know this news may just put the top market and we get much lower prices yet. Anyways, that is my plan as of Sunday night.

Stocks, Gold & Dollar Rising Together?

The recent few months I have been talking about how we could stocks, commodities and the dollar rise together. While is sounds crazy we just may start seeing that happen sooner than later. The Euro group appears to be willing to bailout the Spanish banks and that should cause the Euro lose more value and send the US dollar soaring.

Having more Euro liquidity is bullish for stocks and commodities along with the dollar. For all we know this just may be the financial storm for American’s next eggs (investments owned in Dollars) to rebound strongly over the next 12 months.

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Crude Oil Weekly Technical Outlook For Saturday June 9th

From the staff at Oil N'Gold......

Crude oil turned into sideway consolidation after edging lower to 81.21 initially. Recovery was limited by 4 hours 55 EMA but there was no follow through selling. Initial bias is neutral this week and we'd likely see more consolidative trading ahead. Above 87.03 will bring another rise but upside should be limited by 92.21 resistance and bring fall resumption eventually. Below 81.21 will send crude oil through 80 psychological level to test on 74.95 key support.

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

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Bullish Signals Creeping in to the Crude Oil Market

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Crude oil closed lower on Friday but remains above 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 Sunday's evening session begins. Stochastics and the RSI are turning bullish signaling that sideways to higher prices are possible near term. Closes above the 20 day moving average crossing at 89.54 are needed to confirm that a low has been posted. If July renews this spring'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 86.17. Second resistance is the 20 day moving average crossing at 89.54. 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 higher on Friday as it consolidated some of the decline off May's high. The high range close sets the stage for a steady to higher opening on Monday. 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 2.547 are needed to confirm that a short term low has been posted. If July renews the aforementioned decline, the reaction low crossing at 2.166 is the next downside target. First resistance is the 20 day moving average crossing at 2.547. Second resistance is the reaction high crossing at 2.838. First support is today's low crossing at 2.231. Second support is April's low crossing at 2.096.


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Gold closed higher due to short covering on Friday as it consolidates some of Thursday's decline. The high range close sets the stage for a steady to higher opening when Sunday's evening session begins trading. Stochastics and the RSI are overbought and are turning neutral to bearish hinting that a short term top might be in or is near. 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. If August extends the rally off May's low, April's high crossing at 1674.30 is the next upside 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 1580.90. Second support is May's low crossing at 1529.30.

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Bloomberg: Crude Oil Heads for Longest Weekly Losing Streak Since 1998

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Crude oil fell, heading for the longest run of weekly losses in more than 13 years, on concern that an economic slowdown in the U.S. and Europe will worsen and curb fuel demand.

Crude dropped as much as 3.3 percent after German exports decreased for the first time this year as Europe’s debt crisis and weaker global growth reduced consumption. Federal Reserve officials need to assess the risk from Europe and U.S. budget cuts before deciding on stimulus measures, Federal Reserve Chairman Ben S. Bernanke said yesterday.

“Germany is the lynchpin of the whole euro zone, and if they are slowing, that’s going to add more negative news to the markets,” said Rich Ilczyszyn, chief market strategist and founder of Iitrader.com in Chicago. “It’s basically a letdown after Bernanke’s comments yesterday. There is no growth right now, no oil demand”.....Read the entire Bloomberg article.

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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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