Crude Oil and Natural Gas Technical Outlook For Wednesday Morning

Crude oil was higher overnight as it consolidates above the 10 day moving average crossing at 76.13. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term.

If August extends this month's rally, the reaction high crossing at 79.38 is the next upside target. Closes below last Tuesday's low crossing at 74.25 would temper the near term friendly outlook.

First resistance is last Wednesday's high crossing at 78.15
Second resistance is the reaction high crossing at 79.38

Crude oil pivot point for Wednesday is 77.16

First support is last Tuesday's low crossing at 74.25
Second support is the reaction low crossing at 71.09

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Natural gas was higher overnight and is trading above the 20 day moving average crossing at 4.595. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term.

Closes above the 20 day moving average crossing at 4.595 would confirm that a short term low has been posted while opening the door for a larger degree rally into the end of July. Closes below Monday's low crossing at 4.454 would temper the near term friendly outlook.

First resistance is the reaction high crossing at 4.659
Second resistance is the reaction high crossing at 4.923

Natural gas pivot point for Wednesday is 4.558

First support is Monday's low crossing at 4.454
Second support is last Tuesday's low crossing at 4.334

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Crude Rebounded Together with Equities Despite Mixed Housing Data

Crude oil rebounded in NY session Tuesday as driven by reversal in Wall Street. Corporate earnings results were disappointing while new home sales plunged to an 8 month low. However, investors looked forward for Fed Chairman Ben Bernanke's Congressional testimony in Capitol Hill today. The market anticipated Bernanke would downplay recent weak data that might lead to a double dip recession. He would probably say economic slowdown is temporary and the Fed is ready for new stimulus measures if the economy worsens. The front month WTI contract settled at 77.58, up +0.88%, yesterday.

Wall Street opened lower in the morning session as corporate earnings were weaker than expected. Earnings of IBM and Texas Instruments, large tech stocks, disappointed as revenues missed market expectations. Goldman Sachs reported it net income tumbled -82% y/y to $613M, the lowest level since end 2008, in 2H10 as trading revenue declined more than anticipated. At the same time, Johnson & Johnson revised down its guidance. The company said earnings excluding specia items will be $4.65-4.75/share this year, compared with consensus of $4.80-4.9. The cut is due to a series of drug recalls. These were then upstaged by a powerful report from Apple Inc. Net income jumped +78% y/y to $3.25B in the third quarter as driven by strong iphone sales which generated $5.33B revenue on 8.4M units.

Economic data released yesterday was mixed. While housing starts slid -5.02% to 549K in June from a downwardly revised 578K in the prior month, building permits surprisingly soared +2.09% to 586K during the month. The market, however, chose to focus on the positive side and sent stocks higher. DJIA and S&P 500 ended the day +0.47% and +1.1% higher respectively. Crude oil also rose after the National Hurricane Centre said that a weather system over Puerto Rico and the Dominican Republic has a 60% chance of becoming a tropical cyclone.

Concerning oil inventory, the industry sponsored API said crude and gasoline inventories fell, 0.241 mmb and -0.412 mmb respectively in the week ended July 16. Distillate stockpile, however, rose +0.979 mmb during the week. The market currently forecasts the US Energy Department will report another week of draw for crude inventory but builds in gasoline and distillate stockpiles.

Gold gained +0.83% to settle at 1191.7 as driven by modest safe haven demand. The Hungarian government raised 35B forint from issuance of the 3-month bills, compared with the 45B forint originally planned. The average yield surged to 5.47%, the highest level in 19 weeks, as the talk with the IMF/EU suspended.

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Crude Oil, Natural Gas, U.S. Dollar and Gold All Close Higher

Crude oil closed higher on Tuesday as it consolidates above the 20 day moving average crossing at 75.87. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term. If August extends the rally off this month's low, the reaction high crossing at 79.38 is the next upside target. Closes below last Tuesday's low crossing at 74.25 would temper the near term friendly outlook. First resistance is last Wednesday's high crossing at 78.15. Second resistance is the reaction high crossing at 79.38. First support is last Tuesday's low crossing at 74.25. Second support is the reaction low crossing at 71.09.

Natural gas closed higher on Tuesday ending a two day correction. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. Closes above the 20 day moving average crossing at 4.605 are needed to confirm that a short term low has been posted. If August resumes the decline off June's high, the reaction low crossing at 4.108 is the next downside target. First resistance is the 20 day moving average crossing at 4.605. Second resistance is the reaction high crossing at 4.923. First support is last Thursday's low crossing at 4.288. Second support is the reaction low crossing at 4.108.

The U.S. Dollar closed higher due to short covering on Tuesday as it consolidates some of the decline off June's high. 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 September extends the aforementioned decline, the 50% retracement level of the November-June rally crossing at 82.15 is the next downside target. Closes above the 20 day moving average crossing at 84.51 are needed to confirm that a short term low has been posted. First resistance is the 10 day moving average high crossing at 83.51. Second resistance is the 20 day moving average crossing at 84.51. First support is last Friday's low crossing at 82.25. Second support is the 50% retracement level of the November-June rally crossing at 82.15.

Gold closed higher due to short covering on Tuesday and closed above the 38% retracement level of this year's rally crossing at 1183.90. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are oversold but remain bearish signaling that sideways to lower prices are possible near term. If August extends the decline off June's high, the reaction low crossing at 1168.00 is the next downside target. Closes above the 20 day moving average crossing at 1215.40 are needed to confirm that a low has been posted. First resistance is the 10 day moving average crossing at 1199.40. Second resistance is the 20 day moving average crossing at 1215.40. First support is today's low crossing at 1175.10. Second support is the reaction low crossing at 1168.00.

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New Video: Is it Time to Buy Gold?

It would appear that the euphoria over gold has quickly diminished and many of gold's greatest proponents, who were calling for gold to go over $2,000 an ounce, appear to be disheartened and shell shocked by the recent sharp downturn in gold.

There's an old adage in trading and it goes like this, "they slide faster than they glide." This is true of all markets and what it means is they go down faster than they go up.

In our new video on gold, we share with you some of the thoughts we have right now on this market. We could be looking at some great buying opportunities if just a few components fall into place.

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Crude Oil and Natural Gas Market Commentary For Tuesday Morning

Crude oil was lower due to profit taking overnight as it consolidates above the 10 day moving average crossing at 76.02. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term.

If August extends this month's rally, the reaction high crossing at 79.38 is the next upside target. Closes below last Tuesday's low crossing at 74.25 would temper the near term friendly outlook.

First resistance is last Wednesday's high crossing at 78.15
Second resistance is the reaction high crossing at 79.38

Crude oil's pivot point for Tuesday morning is 76.83

First support is last Tuesday's low crossing at 74.25
Second support is the reaction low crossing at 71.09

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Natural gas was lower overnight as it consolidates above the 10 day moving average crossing at 4.451. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term.

Closes above the 20 day moving average crossing at 4.599 would confirm that a short term low has been posted. If August renews the decline off June's high, the reaction low crossing at 4.285 is the next downside target.

First resistance is the 20 day moving average crossing at 4.599
Second resistance is the reaction high crossing at 4.923

Natural gas pivot point for Tuesday morning is 4.506

First support is last Tuesday's low crossing at 4.334
Second support is the reaction low crossing at 4.285



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Successful Investing and Trading Boils Down to Predictability

Successful investing and trading boils down to predictability. There are many markets that are predictable for short and long periods of time, but it’s difficult to know how long such predictability will last.

Many would say that BP plc (BP)’s continued decline in the weeks and months after the oil spill was predictable, but then again, many were wrong with their immediate and “confident” doomsday predictions, so far, as they predicted the stock would continue sliding into single digits…totally missing the near 40% bounce off the lows in recent days.

The same kind of “confident” predictions were made about Greece and the euro sliding into oblivion and yet both have bounce substantially as it looks like the doomsday predictors were wrong…so far.

We don’t even need to go into these panic/disaster situations, a perfect example of how difficult predictability is Intel Corporation (INTC)’s blow out earnings the other night and how the stock was up big-time afterhours which led overnight futures to surge with many pundits calling for a major technology, not to mention overall stock market, rally to take place…no dice…never happened....INTC opened up huge then gradually down trended all day, their superior earnings seemingly already priced in.

Long story short: “confident” financial market prediction is for suckers.

There are far too many variables floating around for the news, let alone investors and traders, to ever be able to grasp and analyze everything well enough to make any kind of supremely confident predictions.

But that’s exactly why penny stocks should be considered as a predictable market. Let me explain...

This overly simplistic, hugely manipulated, much despised market niche is everything the rest of the financial markets are not: easily predictable.

Unlike forex, ETFs, futures, there are no hugely intelligent people working around the clock, considering every single potential profit angle and using complex algorithms to test out the reliability of various data sets and chart patterns.

Penny Stocks are only traded , promoted, manipulated and invested in by the dumbest, most greedy people in the world.

Sometimes Penny stock companies are either fraudulent or incompetent or both with short and longterm statistics proving that more than 99% of them utterly fail in every conceivable way.

In short, the players and the companies are predictable which is why I specialize in this underappreciated (thankfully) niche and why it’s not just possible/probable for me to earn index and everyone else crushing returns, it’s possible/probable for me to be able to teach you too….this ain’t rocket science folks.

Please do learn from this short video lesson series I’ve put together.

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Crude Oil Rises for a Second Day on Optimism Fuel Demand Will Increase

Crude oil rose for a second day in New York on optimism that China’s expanding economy and a forecast that U.S. crude supplies declined last week will show signs of improving fuel demand.
Oil gained as China’s stocks advanced for a second day as rising domestic consumption boosted the earnings of automakers. U.S. crude inventories probably dropped in the seven days ended July 16, the fourth consecutive week of declines, a Bloomberg News survey showed before a Department of Energy report tomorrow.

“China’s upside really is its restocking ability and its underlying economic growth, I can’t see too much weakness in that market,” said Mark Pervan, a senior commodity strategist at Australia & New Zealand Banking Group Ltd. in Melbourne. Crude oil for August delivery gained as much as 37 cents, or 0.5 percent, to $76.91 a barrel in electronic trading on the New York Mercantile Exchange, and was at $76.80 at 1:59 p.m. Singapore time. Yesterday, it rose 53 cents, or 0.7 percent, to $76.54. The August contract expires today.

The more active September contract increased 22 cents, or 0.3 percent, to $77.12 a barrel. Futures have declined 3.4 percent this year. The dollar was at $1.2972 per euro at 1:46 p.m. Singapore time from 1.2942 in New York yesterday. A weaker dollar increases the investment appeal of commodities like oil. The Shanghai Composite Index, which tracks the bigger of China’s stock exchanges, rose 43.85, or 1.8 percent, to 2,519.28 as of 1:19 p.m. local time, set for the highest since June 28.....Read the entire article.

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Crude Oil Closes and Consolidates Above 20 Day Moving Average

Crude oil closed higher on Monday as it consolidates above the 20 day moving average crossing at 75.95. The mid-range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term. If August extends the rally off this month's low, the reaction high crossing at 79.38 is the next upside target. Closes below last Tuesday's low crossing at 74.25 would temper the near term friendly outlook. First resistance is last Wednesday's high crossing at 78.15. Second resistance is the reaction high crossing at 79.38. First support is last Tuesday's low crossing at 74.25. Second support is the reaction low crossing at 71.09.

Natural gas closed lower on Monday but remains above the 10 day moving average crossing at 4.470. The mid-range close sets the stage for a steady opening on Tuesday. 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 4.620 are needed to confirm that a short term low has been posted. If August resumes the decline off June's high, the reaction low crossing at 4.108 is the next downside target. First resistance is the 20 day moving average crossing at 4.620. Second resistance is the reaction high crossing at 4.923. First support is last Thursday's low crossing at 4.288. Second support is the reaction low crossing at 4.108.

The U.S. Dollar closed higher due to short covering on Monday as it consolidates some of the decline off June's high. The mid-range close sets the stage for a steady 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 September extends the aforementioned decline, the 50% retracement level of the November-June rally crossing at 82.15 is the next downside target. Closes above the 20 day moving average crossing at 84.68 are needed to confirm that a short term low has been posted. First resistance is the 10 day moving average high crossing at 83.65. Second resistance is the 20 day moving average crossing at 84.68. First support is last Friday's low crossing at 82.25. Second support is the 50% retracement level of the November-June rally crossing at 82.15.

Gold closed lower on Monday and below the 38% retracement level of this year's rally crossing at 1183.90. The low range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are diverging but turning bearish again signaling that sideways to lower prices are possible near term. If August extends the decline off June's high, the reaction low crossing at 1168.00 is the next downside target. Closes above the 20 day moving average crossing at 1217.90 are needed to confirm that a low has been posted. First resistance is the 10 day moving average crossing at 1199.80. Second resistance is the 20 day moving average crossing at 1217.90. First support is today's low crossing at 1176.90. Second support is the reaction low crossing at 1168.00.

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Phil Flynn: When Irish Eyes Are Crying

A downgrade of Irish debt, an oil spill in China and two storm systems down in the Atlantic that bear watching has oil being pulled in different directions. The tug and pull between bearish and bullish forces has oil bouncing in both directions. Now with a whole plate of earnings ahead of us, the dollar and the stock market will be our guide unless of course things get nasty weather wise down south. Overnight Moody's Investors Service cut Ireland's sovereign debt rating to Aa2 from Aa1because of what they say is the government's "gradual but significant loss of financial strength."

Moody says that Ireland’s weakening debt affordability, lower economic growth prospects due to the severe downturn in the banking and real estate sectors, as well as liabilities from the bailout of the banking sector all contributed to the downgrade. At first oil broke on this news as it was feared that this downgrade might hit Europe and what is perceived as Euro Zone stability. Yet oil came back as Moody's at the same time lifted the ratings outlook on Irish government debt to stable from negative and said that the risks are now evenly balanced at the new lower rating standard.

Besides we all knew that Ireland was in danger of a downgrade in the first place. Don’t cry over spilled milk but I guess you can cry over spilled oil. The latest oil spill is in China.....Read the entire article.

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New Video: Is the Euro on Shaky Ground?

In this short video we take an in depth look at the euro and its relationship to the US dollar. The recent sharp rally in the euro, up from the 1.19 level, may be coming to an end.

We look at several indicators that are close to confirming that this market may be set to head lower.

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