October crude oil closed higher on Friday. The high range close sets the stage for a steady to higher opening when Monday's night session begins. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near term. Closes below the reaction low crossing at 102.22 would confirm that a double top has been posted. Closes above July's high crossing at 108.93 would renew this summer's rally while opening the door for a possible test of weekly resistance crossing at 110.55 later this summer. First resistance is July's high crossing at 108.93. Second resistance is weekly resistance crossing at 110.55. First support is the reaction low crossing at 102.22. Second support is the 38% retracement level of the April-July rally crossing at 100.27.
The September S&P 500 closed higher on Friday as it extended Thursday's key reversal up. The high range close sets the stage for a steady to higher opening when Monday's night session begins trading. 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 1676.40 would confirm that a short term low has been posted. If September resumes the decline off August's high, the 50% retracement level of the June-August rally crossing at 1629.45 is the next downside target. First resistance is the 10 day moving average crossing at 1661.17. Second resistance is the 20 day moving average crossing at 1676.40. First support is Thursday's low crossing at 1631.70. Second support is the 50% retracement level of the June-August rally crossing at 1629.45.
October gold closed higher on Friday renewing the rally off June's low. The high range close sets the stage for a steady to higher opening when Monday's night session begins trading. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term. If October extends the aforementioned rally, June's high crossing at 1424.00 is the next upside target. Closes below the 20 day moving average crossing at 1333.70 would confirm that a short term top has been posted. First resistance is today's high crossing at 1399.40. Second resistance is June's high crossing at 1424.00. First support is the 20 day moving average crossing at 1333.70. Second resistance is the reaction low crossing at 1272.10.
September Henry natural gas closed lower due to profit taking on Friday as it consolidates some of this month's rally. The low range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are overbought but remain bullish signaling that sideways to higher prices are possible near term. If September extends this month's rally, the 38% retracement level of the May-August decline crossing at 3.662 is the next upside target. Closes below the 20 day moving average crossing at 3.473 would confirm that a short term top has been posted. First resistance is today's high crossing at 3.562. Second resistance is the 38% retracement level of the May-August decline crossing at 3.662. First support is the 20 day moving average crossing at 3.473. Second support is August's low crossing at 3.129.
Check out the Day Trading History of 16 Major Candlestick Patterns
Friday, August 23, 2013
Thursday, August 22, 2013
NASDAQ Flash Freeze and Digesting the FOMC Minutes
The U.S. stock indexes closed higher today. The Nasdaq was shut down for three hours in the afternoon, and that took some buying interest away from all the indexes. The stock index bulls still have the overall near term technical advantage, but are fading. The market place had some time to digest Wednesday afternoon's FOMC minutes that revealed no clear consensus from FOMC members on when to start to wind down the Fed's monthly bond buying program, also known as quantitative easing.
While the minutes were not all that different from the last minutes of the FOMC that were released several weeks ago, the “take away” the market place garnered from this latest Fed event was that “tapering” of quantitative easing is coming, and likely sooner rather than later. The FOMC minutes reinforced ideas that the long, long road of very easy money from the world's major central banks will reach an end in the coming months. Such was deemed bullish for the U.S. dollar, and bearish for world bond markets and periphery currencies. U.S. 10 year note yields hit a two year high of 2.925% overnight. German and U.K. bond yields also hit multi year highs overnight. Asian currency and financial markets remained strained Thursday.
The Indian rupee and Turkish lira hit new record lows versus the U.S. dollar Thursday. Indian and Indonesian central bank officials have taken steps to stabilize their currencies, but with only very limited success. There are worries about an “Asian contagion” that has in the past roiled markets worldwide. Rising interest rates in the major world economies have put pressure on the periphery currencies. Chinese manufacturing data Thursday showed improvement from the prior month.
The HSBC purchasing managers index rose to 50.1 in August from 47.7 in July. A reading over 50.0 suggests economic growth. China is the world's second- largest economy, but the leading worldwide importer of many key raw commodities. The China data somewhat assuaged the Asian markets, but the concerns of an Asian contagion outweighed the positive China data. Traders and investors have moved the ongoing Egypt unrest to the back burner for the moment, as there are no major, new developments there.
However, any escalation in violence is likely to impact the market place. News reports that Syria has used chemical weapons against its civilians, with hundreds killed, is a matter that will be closely monitored by the market place, and is yet another geopolitical hotspot that could flare up to become a major markets factor.
So why not consider adding this simple set up in the Crude Oil market?
While the minutes were not all that different from the last minutes of the FOMC that were released several weeks ago, the “take away” the market place garnered from this latest Fed event was that “tapering” of quantitative easing is coming, and likely sooner rather than later. The FOMC minutes reinforced ideas that the long, long road of very easy money from the world's major central banks will reach an end in the coming months. Such was deemed bullish for the U.S. dollar, and bearish for world bond markets and periphery currencies. U.S. 10 year note yields hit a two year high of 2.925% overnight. German and U.K. bond yields also hit multi year highs overnight. Asian currency and financial markets remained strained Thursday.
The Indian rupee and Turkish lira hit new record lows versus the U.S. dollar Thursday. Indian and Indonesian central bank officials have taken steps to stabilize their currencies, but with only very limited success. There are worries about an “Asian contagion” that has in the past roiled markets worldwide. Rising interest rates in the major world economies have put pressure on the periphery currencies. Chinese manufacturing data Thursday showed improvement from the prior month.
The HSBC purchasing managers index rose to 50.1 in August from 47.7 in July. A reading over 50.0 suggests economic growth. China is the world's second- largest economy, but the leading worldwide importer of many key raw commodities. The China data somewhat assuaged the Asian markets, but the concerns of an Asian contagion outweighed the positive China data. Traders and investors have moved the ongoing Egypt unrest to the back burner for the moment, as there are no major, new developments there.
However, any escalation in violence is likely to impact the market place. News reports that Syria has used chemical weapons against its civilians, with hundreds killed, is a matter that will be closely monitored by the market place, and is yet another geopolitical hotspot that could flare up to become a major markets factor.
So why not consider adding this simple set up in the Crude Oil market?
Wednesday, August 21, 2013
"Beating the Market Makers" webinar replay.....Can you be on the same side of the trade?
Over 10,000 traders watched the live webinar on Tuesday and John does limit seating so sign up right away before traders fill all of the slots.
Just Click here to Register Now
Here's what he'll be covering...
- How to be on the same side as the Market Maker
- How to protect yourself in a trade
- How to pick the right stock at the right time
- What Wall Street doesn't want you to know about weekly options
- The one simple trick to put the odds in your favor
And much more......
This timely webinar replay will take place on Thursday, August 22nd at 2:00PM Eastern Time.
Click here to register
After you register you will receive reminder emails automatically so you don't miss the webinar. I don't know if they'll be recording this, or if he'll ever share this information again, so don't miss out.
We'll see you in this free training class, then we'll see you in the markets. Will you be trading with us....or against us?
Ray @ The Crude Oil Trader
Market Makers.....Can you be on the same side of the trade?
Andrey Dashkov: Peak Gold
By Andrey Dashkov, Research Analyst
In the mining business, it is said that grade is king. A high-grade project attracts attention and money. High grade drill intercepts can send an exploration company's stock price higher by an order of magnitude. As a project moves to the development stage, the higher the grade, the more robust the projected economics of a project. And for a mine in production, the higher the grade, the more technical sins and price fluctuations it can survive.
It is also said that the "low hanging fruit" of high-grade deposits has all been picked, forcing miners to put lower-grade material into production.
You could call it Peak Gold.....and argue that the peak is already behind us. Let's test that claim and give it some context.
One of the ways to look at grades is to compare today's highest-grade gold mines to those from the past. We pulled grade data from the world's ten highest grade gold mines for the following chart.
As of last year, grades at the richest mines have fallen an average of 20% since 1998. However, except for 2003, when the numbers were influenced by the Natividad gold/silver project (average grade 317.6 g/t Au) and Jerritt Canyon (245.2 g/t Au), the fourteen-year trend is relatively stable and not so steeply declining. The spike in 2003 looks more like an outlier than Peak Gold.
However, these results don't provide much insight into the resource sector as a whole, one reason being that the highest-grade mines have vastly different production profiles.
For example, Natividad—owned by Compañía Minera Natividad y Anexas—produced over 1 million ounces in 2003 from ore grading over 300 g/t gold, while the San Pablo mine owned by DynaResource de Mexico produced only 5,000 ounces of gold from 25 g/t Au ore in the same year.
This made San Pablo one of the world's ten highest-grade operations in 2003, but its impact on global gold supply was minimal. In short, the group is too diverse to draw any solid conclusions.
We then turned to the world's top 10 largest operations, a more representative operation, and tallied their grades since 1998.
The picture here is more telling. Since 1998, gold grades of the world's top ten operations have fallen from 4.6 g/t gold in 1998 to 1.1 g/t gold in 2012.
This does indeed look like Peak Gold, in terms of the easier-to-find, higher-grade production having already peaked, but it's not as concerning as you might think. As gold prices increased from $302 per ounce at the end of 1998 to the latest price of $1,377, both low-grade areas of existing operations and new projects whose grades were previously unprofitable became potential winners.
Expanding existing operations into lower-grade zones near an existing operation is the cheapest way to increase revenue in a rising gold price environment. So many companies did just that.
Indeed, the largest gold operations—the type we included in the above chart—would be the first ones to drop their gold grades when prices are higher, simply due to the fact that what they lose in grade they can make up in tonnage run through existing processing facilities. Larger size allows lower-grade material to be profitable because of economies of scale. New technologies have helped to make lower-grade deposits economic as well.
So, at least until 2011, the conventional wisdom of "grade is king" was being replaced by "size is king."
However, production costs have been increasing as well—and have continued increasing even as metals prices have retreated in recent years. Rising operating costs and capital misallocations (growth for growth's sake, for example) are at least partly to blame for miners' underperformance this year.
Suddenly, grade seems to be recovering its crown. It remains to be seen whether more high-grade discoveries can actually be made, or whether Peak Gold is actually behind us.
The Takeaway
Truth is, there is no king. Grade and size, although among the most important variables in the mining business, tell only part of the story. Neither higher grades nor monster size prove profitability by themselves—the margin they generate at a given point in time is what matters most. And then what the company does with its income matters, too.
It's true that high enough grade can trump all other factors in a mining project, but it's the task of a company's management to navigate the changing environment, control operating costs, and oversee the company's growth strategy so that it creates shareholder value.
The resource sector has had a sober awakening, and now we see many companies changing their priorities from expansion to profitability, which depends on many parameters in addition to grade. This is a good thing.
As for Peak Gold, if that does indeed turn out to be behind us, the big, bulk-tonnage low-grade deposits that are falling out of favor today will become prime assets in the future. It'll either be that or go without.
Times may be tough, but the story of the current gold bull cycle isn't done being written. The better companies will survive the downturn and thrive in the next chapter. Identifying these is the ongoing focus of our work.
| How about a project that's high grade and big? We recommended a new producer that has such an asset, and it hasn't been this cheap since its IPO. Find out who it is in the August issue of Casey International Speculator. Start your risk-free trial with 100% money-back guarantee here. |
Know the Zone & Improve Your Gap Trading
Guest writer today is our trading partner Scott Andrews. If you are not familiar with Scott's work this will be a great primer on "gap trading".
I am a gap trader. Specifically, I 'fade' the opening gap (i.e. go short when the gap is up or long when the gap is down). My first research breakthrough many years ago was in recognizing that gap selection was the “door” to making profits and the “key” to that door was to focus on the location of the opening price.
Using the prior day's direction (up or down) and the open, high, low, and closing prices, I created ten “zones” and each provides tremendous insight into the probability of a gap filling or not. My selection strategy has evolved over the years to include market conditions, patterns and seasonality, but zones remain the foundation of my gap fade selection criteria.
So why do opening zones work? They inherently incorporate :
* proven support and resistance levels
* short term trend
* overnight bias
* gap size
* trader psychologically
Together these five elements combine to create a wide range of gap fade setups that vary from highly probable to highly risky for any market. Since opening gaps in general have a strong tendency to trade back to the prior day's closing price (65-70%), the name of the game is not trying to catch all of the winners, but rather to avoid most of the losers. And that is what opening zones do very well.
So why do you think gaps in the U-L zone (bottom right of the Gap Zone Map) show such a low historical win rate (48%)? I believe it's because gaps opening in this zone are catching traders positioned to the long side off guard, triggering many sell stops in the process. Plus, such an obvious reversal from the prior day surely attracts new short sellers who want to jump on board the beginning of a new potential trend. I've nicknamed this zone the “BLUD” zone for obvious reasons, plus it's easy to remember: "Below the Low of an Up Day."
Whether you trade the opening gap as a setup or just want to improve the timing of your swing trade entries and exits, you will do a better job, if you pay attention to the opening zone next time. And by the way, gap zones work great for not only the indices, but individual stocks and commodity markets like Corn and Oil too.
Good trading and good gapping!
You may also be interested in watching Scott’s short video on the The Power of Diversification. During this short, compelling video, Scott explains:
* Why asset diversification is not enough
* 7 ways traders can diversify
* The right vs. wrong way to diversify
* Equity curve example (the power of complementary strategies)
And much more
Watch This Video Now
Using the prior day's direction (up or down) and the open, high, low, and closing prices, I created ten “zones” and each provides tremendous insight into the probability of a gap filling or not. My selection strategy has evolved over the years to include market conditions, patterns and seasonality, but zones remain the foundation of my gap fade selection criteria.
So why do opening zones work? They inherently incorporate :
* proven support and resistance levels
* short term trend
* overnight bias
* gap size
* trader psychologically
Together these five elements combine to create a wide range of gap fade setups that vary from highly probable to highly risky for any market. Since opening gaps in general have a strong tendency to trade back to the prior day's closing price (65-70%), the name of the game is not trying to catch all of the winners, but rather to avoid most of the losers. And that is what opening zones do very well.
So why do you think gaps in the U-L zone (bottom right of the Gap Zone Map) show such a low historical win rate (48%)? I believe it's because gaps opening in this zone are catching traders positioned to the long side off guard, triggering many sell stops in the process. Plus, such an obvious reversal from the prior day surely attracts new short sellers who want to jump on board the beginning of a new potential trend. I've nicknamed this zone the “BLUD” zone for obvious reasons, plus it's easy to remember: "Below the Low of an Up Day."
Whether you trade the opening gap as a setup or just want to improve the timing of your swing trade entries and exits, you will do a better job, if you pay attention to the opening zone next time. And by the way, gap zones work great for not only the indices, but individual stocks and commodity markets like Corn and Oil too.
Good trading and good gapping!
You may also be interested in watching Scott’s short video on the The Power of Diversification. During this short, compelling video, Scott explains:
* Why asset diversification is not enough
* 7 ways traders can diversify
* The right vs. wrong way to diversify
* Equity curve example (the power of complementary strategies)
And much more
Watch This Video Now
Tuesday, August 20, 2013
Market Makers.....Can you be on the same side of the trade?
As of this morning over 10,000 traders have registered and John does limit seating so sign up right away.
Just Click here to Register Now
Here's what he'll be covering...
- How to be on the same side as the Market Maker
- How to protect yourself in a trade
- How to pick the right stock at the right time
- What Wall Street doesn't want you to know about weekly options
- The one simple trick to put the odds in your favor
And much more......
This timely webinar will take place on Tuesday, August 20th at 8:00PM Eastern Time.
Click here to register
After you register you will receive reminder emails automatically so you don't miss the webinar. I don't know if they'll be recording this, or if he'll ever share this information again, so don't miss out.
We'll see you in this free training class, then we'll see you in the markets. Will you be trading with us....or against us?
Ray @ The Crude Oil Trader
Market Makers.....Can you be on the same side of the trade?
Monday, August 19, 2013
Markets Drop for a Fourth Day on Bond Price and Bank Worries
September crude oil closed lower due to profit taking on Monday. The mid-range close sets the stage for a steady opening when Tuesday's night session begins. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near term. Closes above July's high crossing at 108.93 would renew this summer's rally while opening the door for a possible test of weekly resistance crossing at 110.55 later this summer. Closes below the reaction low crossing at 102.22 would confirm that a short term top has been posted. First resistance is July's high crossing at 108.93. Second resistance is weekly resistance crossing at 110.55. First support is the reaction low crossing at 102.22. Second support is the 38% retracement level of the April-July rally crossing at 100.27.
October gold closed lower due to profit taking on Monday as it consolidated some of the rally off June's low. The low range close sets the stage for a steady to lower opening when Tuesday's night session begins trading. Stochastics and the RSI are overbought but remain bullish signaling that sideways to higher prices are possible near term. If October extends the aforementioned rally, June's high crossing at 1424.00 is the next upside target. Closes below the 20 day moving average crossing at 1323.60 would confirm that a short term top has been posted. First resistance is today's high crossing at 1382.40. Second resistance is June's high crossing at 1424.00. First support is the 20 day moving average crossing at 1323.60. Second resistance is the reaction low crossing at 1272.10.
September Henry natural gas closed higher on Monday and above the 20 day moving average crossing at 3.416 confirming that a short term low has been posted. The high range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. If September extends today's rally, the 38% retracement level of the May-August decline crossing at 3.662 is the next upside target. Closes below the 10 day moving average crossing at 3.327 would confirm that a short term top has been posted. First resistance is today's high crossing at 3.501. Second resistance is the 38% retracement level of the May-August decline crossing at 3.662. First support is the 10 day moving average crossing at 3.327. Second support is August's low crossing at 3.129.
And of course we can't leave out coffee anymore. September coffee closed lower on Monday and the low range close set the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near term. If September renews this month's rally, the reaction high crossing at 126.50 is the next upside target.
Sign up for John Carter's next webinar "Beating the Market Makers" NOW!
Sunday, August 18, 2013
Scott Andrews.....Proof You are Crazy not to Diversify Your Trading
No single trading strategy works all the time and diversification can help during the tough stretches by REDUCING your draw downs. Best of all, diversification (done properly) can also ACCELERATE your equity without increasing your overall risk.
Check out this excellent video by our friend Scott Andrews from Master The Gap as he explains the ins and outs of trading diversification. No opt-in required.
The Power of Diversification
During this short, compelling video, Scott explains:
• Why asset diversification is not enough
• 7 ways traders can diversify
• The right vs. wrong way to diversify
• Equity curve example (the power of complementary strategies)
• And much more
Watch This Video Now
Don't worry; there is NO SALES PITCH in this presentation. It's just solid information from a conservative trader that we believe everyone should consider.
If you are interested in adding a new setup and/or market feel free to opt in, then watch your email in the coming days for another free video introducing you to trading the oil market.
Please feel free to leave us a comment and let us know what you think about Scott's video
Proof You are Crazy not to Diversify Your Trading
Friday, August 16, 2013
Be on right side of this market, protect yourself, BE HERE
Here's what he'll be covering...
* How to be on the same side as the Market Maker
* How to protect yourself in a trade
* How to pick the right stock at the right time
* What Wall Street doesn't want you to know about weekly options
* The one simple trick to put the odds in your favor
And much more
This timely webinar will take place online but seating is limited due to the high demand.
Click Here to Register
After you register you will receive reminder emails automatically so you don't miss the webinar. I don't know if they'll be recording this, or if he'll ever share this information again, so don't miss out.
See you in this free training class.
Then we'll see you in the markets, as we put John's methods to work,
Ray @ The Crude Oil Trader
Be on right side of this market, protect yourself, BE HERE
Adam weighs in ...... Is Gold Indicating Trouble Ahead?
As another trading week comes to a close, it is worth noting that gold is closing at a nine week high for a Friday. I believe that this is a significant event, and believe that gold has now put in a base to move higher later this year and next year.
It's a little ironic that hedge fund traders, like George Soros, recently divested themselves of their long gold positions, as it now appears that the market has put in a major base and wants to move higher.
Our long term monthly Trade Triangle for gold continues to be in a negative mode. However, this Trade Triangle [click here to get a free trial of Adam's Trade Triangle technology] is slowly beginning to flatten out and I would not be surprised to see it change to green in the not too distant future. In today's report, I will be covering gold and a gold stock that you may want to trade, as it flashed a major buy signal today.
I will also be covering some very interesting stocks that I think have potential on the upside after their recent correction from their highs, as well as my analysis of the major markets and what I am looking for in next week's market.
Have a great trading day and a super weekend,
Adam Hewison
President, INO.com
Co-Creator, MarketClub
P.S. Click here to check out Adam's INO TV. It's FREE!
John Carter's "Dirty Secrets of Weekly Options".... New Video
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