Safe Havens are Shining but are Equities about to Rocket Higher?

It was another extremely volatile week sharp rallies followed by sharp sell offs. Fear is in no doubt controlling the market. The bulls and bears continue to battle it out. The charts below cover some important trends and market internals I pay attention to on a daily basis.

US Dollar Index – Daily Chart
The past two months the dollar as been in rally mode. The last 14 days we have seen a large bullish pennant form and this pattern typically marks the half way point for the current tend. The measured move for the USD is pointing to 93 over the next few months.

Gold Futures Prices – Daily Chart
Gold as we all know is seen as the major safe haven and the price per ounce has been steadily climbing. Friday we saw the major indexes sell down very hard but both the dollar and gold posted some solid gains. Gold does looks as though it needs some time to digest the recent move higher and this could take a week or two before anything exciting happens but I am on the lookout for low risk setups.

VIX – Volatility Index – 60 Minute Chart
This index measures the fear in the market. When fear is high and everyone is selling their positions we see the VIX jump in price. Over the past month we can see a possible Head & Shoulders pattern forming. If this pattern unfolds like it should then we will see the price of equities bottom in the coming week with the VIX dropping below the blue neckline. The old saying is “When the VIX is High is time to Buy, when the VIX is low its time to Go”.

Put Call Ration – 60 Minute Chart
In short, when the put/call ration is over 1.00 then there are more traders/investors buying Put Options than Call Options. Put options are when people are buying leverage to take advantage of lower prices. My thought/opinion about this is when more people are trading with leverage anticipating lower prices, I figure they have sold all their long positions and are now using leverage to profit from lower prices. Well if the majority of individuals have sold everything then in reality there should not be much left to be sold… So I feel this correction which started in April is almost finished.

NYSE Advance/Decline Line – 60 Minute Chart
This is one of my favorite charts to look at. While there are several indicators, market internals and technical analysis needed to clearly determine if the market is currently overbought or oversold, this chart is one that can help give you a good idea if you should be looking to buy, short or just stay in cash for the time being.

SP500 Futures Prices - 2 Hour Chart
The SP500 has been up and down like a yo-yo with some very dramatic moves. Up 2+% day down 2+% the next… very sharp and powerful moves can be both every profitable or costly if not traded correctly. Last week we caught a nice 2% gain in less than 24 hours which was an exciting trade. It looked at though the market was about to breakout to the upside and possibly reach the 1150 level but early Friday morning there were rumors about some Euro bank having serious problems and that was just enough to cause a domino effect sending the market lower throughout the entire session closing on a very strong negative note for the day/week.

That being said the market internals are indicating that equities are oversold at these current prices and a bounce is due any time. With the panic selling on the NYSE Friday reaching 119 sell orders for every 1 buy order I think we will see some follow through next week with lower prices, then a rebound once investors finish selling everything they own at which point we will be looking to get involved again.

Weekly Trading Conclusion:
In short, money continues to flow into the safe havens (Gold & US Dollar). The major indices are showing extreme panic selling and look ready to in the next few days. There is a possibility that the market could break down and start another major leg lower which is a big concern to me. I will be glued to the market internals and support levels for the major commodities and equity sectors in hopes to catch the bottom or to avoid another melt down.

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Crude Oil Weekly Technical Outlook For Sunday June 6th

Crude oil's break of 71.23 minor support last week suggests that recovery from 64.24 is already completed at 75.72 already. Initial bias is mildly on the downside this week for a test on 64.24 low first. Break there will confirm that whole decline for 87.15 has resumed and should target next key level at 60, which is close to 50% retracement of 33.2 to 87.15 at 60.18. On the upside, above 75.72 will bring another rise, but after all, upside should be limited by 61.8% retracement of 87.15 to 64.23 at 78.39 and bring fall resumption.

In the bigger picture, prior break of 68.59/69.50 support zone affirms our view that whole medium term rebound from 33.2 has completed at 87.15 already, just ahead of 50% retracement of 147.27 to 33.2 at 90.24. Further decline should be seen to 50% retracement of 33.2 to 87.15 at 60.18 at least. Also, as rebound from 33.2 is viewed as as a correction to the whole correction that started at 2008 at 147.27, we'd anticipate a break of 33.2 low in the longer term. On the upside, break of resistance at 78 level is needed to be indicate that fall from 87.15 is completed. Otherwise, we'll stay bearish.

In the long term picture, current development suggests that rebound from 33.2 is finished at 87.15, inside 76.77/90.24 fibo resistance zone as expected. Our view is that fall fro 87.15 would develop into the third falling leg of the whole correction from 147.27 and hence, we'd anticipate an eventual break of 33.2 low in the long term as such correction extends.....Nymex Crude Oil Continuous Contract 4 Hours Chart.

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Disappointing Employment Numbers Drag Crude Oil Down Near $72

Crude oil prices fell hard Friday after a key barometer of the economy showed that U.S. companies remain reluctant to hire, dampening prospects that a rebounding economy mean more oil and gasoline demand. The nation's payrolls added 431,000 jobs last month, almost all of them from temporary census jobs. The unemployment rate inched down to 9.7 percent. Private companies added just 41,000 jobs, compared with 218,000 in April, and well below analysts' forecasts.

Stock markets dropped with the weaker than expected private sector hiring picture, and that pulled down oil prices as well. The Dow Jones Industrial Average, the NASDAQ and the S&P 500 were all down about 2 percent in late morning trading. Meanwhile, retail gasoline prices rose Friday for the first time in nearly a month, though analysts think pump prices for June are likely to continue falling, albeit at a slower pace.

Benchmark crude for July delivery dropped $2.38 at $72.23 per barrel in trading on the New York Mercantile Exchange. Earlier in the session, it climbed as high as $75.42. The contract rose $1.75 to settle at $74.61 on Thursday. "This jobs report makes it look like we're not going to see a summer boom," said Mike Lynch of Strategic Energy and Economic Research.....Read the entire article.

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Crude Oil, Natural Gas, Gold and Dollar Commentary For Friday Evening

Crude oil closed lower on Friday as it consolidated some of the rally off May's low. The low range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term. Closes above the 20 day moving average crossing at 74.16 are needed to confirm that a short term low has been posted. If July renews the decline off May's high, last July's low crossing at 66.11 is the next downside target. First resistance is the 20 day moving average crossing at 74.16. Second resistance is last Friday's high crossing at 75.72. First support is today's low crossing at 70.79. Second support is last Tuesday's low crossing at 67.15.

Natural gas closed higher on Friday as it extends Thursday's breakout above the upper boundary of the April-May trading range crossing at 4.433. The mid range close sets the stage for a steady opening on Monday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. If July extends this week's rally, the 50% retracement level of the November-May decline crossing at 5.151 is the next upside target. Closes below the 10 day moving average crossing at 4.326 would confirm that a short term top has been posted. First resistance is today's high crossing at 4.977. Second resistance is the 50% retracement level of the November-May decline crossing at 5.151. First support is the 10 day moving average crossing at 4.326. Second support is Wednesday's low crossing at 4.217.

The U.S. Dollar closed higher on Friday breaking out to the topside of the consolidation pattern of the past two weeks. The high range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are turning bullish signaling that sideways to higher prices possible near term. If June extends this year's rally, the March 2009 high on the weekly continuation chart crossing at 89.71 is the next upside target. Closes below the reaction low crossing at 85.33 are needed to confirm that a short term top has been posted. First resistance is today's high crossing at 88.33. Second resistance is weekly resistance crossing at 89.71. First support is the 20 day moving average crossing at 86.30. Second support is the reaction low crossing at 85.33.

Gold closed higher on Friday and the high range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near term. If August extends this week's rally, May's high crossing at 1251.40 is the next upside target. Closes below today's low crossing at 1198.10 would confirm that a short term top has been posted. First resistance is Tuesday's high crossing at 1230.60. Second resistance is May's high crossing at 1251.40. First support is today's low crossing at 1198.10. Second support is the reaction low crossing at 1168.00.

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Phil Flynn: All Right So You Are Mad At BP

All right so you are mad at BP so why not go out and try to cut into their profits buy not buying their gasoline. Well it sounds good, but the problem is that if you want to get back at BP that is not the way to do it. The truth is BP is not in the retail gas business and the other truth is all you will hurt by boycotting them is the people that have nothing to do with the spill. A BP boycott is an exercise in futility.People are angry and they want to lash out but a boycott won't hurt BP.

The owners of BP gas stations just bought the brand name and are in many cases hard working taxpaying citizens that are basically trying to make a living in a business where profit margins are already thin and rely heavily on the sale of cold drinks, coffee and hot dogs. They too are the victims of BP’s errors and are probably even angrier at BP than you are. Boycotting BP branded service stations to get back at and hurt BP will have about the same impact on BP as if you decided to boycott Dunkin Donuts or McDonalds or CNBC. On second thought, maybe boycotting CNBC might be a good way to express your anger.

You know keeping things like that bottled up like that might not be good for your health. And of course watching the Fox Business Network is a good way to feel better.Back in 2007 BP sold all of its U.S. convenience retail units of its company owned and company operated convenience stores. The majority of sites were sold to franchisees and some to dealers and large distributors (jobbers). While the franchises are required to market BP.....Read the entire article.

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Crude Oil Daily Technical Outlook For Friday Morning

Crude oil is still staying in tight range below 75.72 and intraday bias remains neutral. On the downside, break of 71.23 minor support will indicate that rebound from 64.23 is finished and will flip intraday bias back to the downside for retesting this low first. On the upside, above 75.72 will bring another rise, but after all, upside should be limited by 61.8% retracement of 87.15 to 64.23 at 78.39 and bring fall resumption.

In the bigger picture, prior break of 68.59/69.50 support zone affirms our view that whole medium term rebound from 33.2 has completed at 87.15 already, just ahead of 50% retracement of 147.27 to 33.2 at 90.24. Further decline should be seen to 50% retracement of 33.2 to 87.15 at 60.18 at least. Also, as rebound from 33.2 is viewed as as a correction to the whole correction that started at 2008 at 147.27, we'd anticipate a break of 33.2 low in the longer term. On the upside, break of resistance at 78 level is needed to be indicate that fall from 87.15 is completed. Otherwise, we'll stay bearish.....Nymex Crude Oil Continuous Contract 4 Hours Chart.

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Crude Oil Falls First Day in Three on Slowing Growth in China

Crude oil fell for the first day in three on concern growth will slow in China, cutting fuel demand in the world’s second largest energy user. Oil gave up some of yesterday’s 2.4 percent gain on speculation Chinese demand will slow as policymakers trim economic stimulus after the $1.4 trillion lending binge that revived growth in 2009. Crude supplies at Cushing, Oklahoma, where New York traded West Texas Intermediate oil is delivered, rose last week, the Energy Information Administration said.

“The mood is still cautious,” said Toby Hassall, a commodity analyst at CWA Global Markets Pty in Sydney. “The numbers from the EIA were not unexpected in terms of the seasonal pattern. There is still caution in the marketplace.” Crude oil for July delivery dropped as much as 42 cents, or 0.6 percent, to $74.19 a barrel, in electronic trading on the New York Mercantile Exchange. It was at $74.31 at 10:33 a.m. Singapore time. Yesterday, the contract rose $1.75 to settle at $74.61. Futures are poised for a 0.4 percent gain for the week, the second consecutive weekly increase.

“Sentiment is still very fragile,” David Moore, a commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney, said by telephone today. “Inventories are still high. There are some signs of improvement but it’s certainly not a tight market at this stage”....Read the entire article.

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Video: Crude Oil and Natural Gas Inventories Slide

Oil inventories declined greater than expected, with CNBC's Sharon Epperson and Chris Motroni, Heritage Energy.




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Top Trader Exposes Penny Stock Frauds

This article will make a lot of people nervous. Very nervous.

Why? Because it’s about a trading breakthrough available to only a small number of people that has the potential to make the recent run up in the stock market look like chicken feed.

But it’s also going to calm the nerves of every investor troubled by recent market upheavals and volatility....the kind of nerves that normally grip your gut in ice cold fear when there’s money at stake.

Here's what's at stake: a limited number of people are going to get an opportunity at this all new approach to trading that's generating returns 141% and more per year! And if that's not exciting enough, these lucky few will get personal access to a trader ranked #1 out of 45,000 by Covester.com.

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Crude Oil, Natural Gas, Gold and Dollar Commentary For Thursday Evening

Crude oil closed higher on Thursday as it extends the rebound off May's low. The high range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near term. Closes above the 20 day moving average crossing at 74.60 are needed to confirm that a short term low has been posted. If July renews the decline off May's high, last July's low crossing at 66.11 is the next downside target. First resistance is the 20 day moving average crossing at 74.60. Second resistance is last Friday's high crossing at 75.72. First support is the 10 day moving average crossing at 71.97. Second support is last Tuesday's low crossing at 67.15.

Natural gas closed higher on Thursday and closed above the upper boundary of the April-May trading range crossing at 4.433. The high range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. If July extends this week's rally, the 38% retracement level of the November-May decline crossing at 4.872 is the next upside target. Closes below the 10 day moving average crossing at 4.264 would confirm that a short term top has been posted. First resistance is today's high crossing at 4.703. Second resistance is the 38% retracement level of the November-May decline crossing at 4.872. First support is Wednesday's low crossing at 4.217. Second support is the reaction low crossing at 3.971.

The U.S. Dollar closed higher on Thursday as it extends the consolidation pattern of the past two weeks. The high range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are diverging but are turning neutral to bullish signaling that sideways to higher prices possible near term. If June renews this year's rally, the 87% retracement level of 2009's decline on the weekly continuation chart crossing at 87.79 is the next upside target. Closes below the reaction low crossing at 85.33 are needed to confirm that a short term top has been posted. First resistance is the reaction high crossing at 87.63. Second resistance is weekly resistance crossing at 87.79. First support is the 20 day moving average crossing at 86.12. Second support is the reaction low crossing at 85.33.

Gold closed lower due to profit taking on Thursday. The low range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near term. If August extends this week's rally, May's high crossing at 1251.40 is the next upside target. First resistance is Tuesday's high crossing at 1230.60. Second resistance is May's high crossing at 1251.40. First support is the 10 day moving average crossing at 1206.70. Second support is the reaction low crossing at 1168.00.

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Phil Flynn: Oil Prices Rise On Leaked Information

That is right! The jobs report was leaked causing a rally in the stock market! Who got their hands on this valuable inside information and leaked it to the marketplace at large? Well believe it or not it was Obama himself. What!? I know! Yet that is exactly what he did. Speaking at Carnegie Mellon University in Pittsburgh, the President said, “After losing an average of 750,000 jobs a month during the winter of last year, we have now added jobs for five of the last six months, and we expect to see strong job growth in Friday's report.” Ah ha!!!

Do you think he knows something? Now that is just one day after the Vice President Joe Biden said that the upcoming May employment report would show a much larger number of jobs created than in the previous month, when 290,000 jobs were added. Do you think he knows something? Ok, silly question. But of course the market took the President seriously anyway helping to drive stocks and the oil market higher.Why oil? Well based on improving US demand expectations on better US jobs outlook we might actually consume more oil.

That thought was enforced by some pretty strong auto sales data. It seems that in the Month of May while the stock market was tanking auto sales were soaring! Maybe some people were taking their stock profits to buy new cars. Ford, GM and Chrysler all saw double digit sales gains over May of a year ago according to the AP. The AP reported, “May marked the seventh straight month of year-over-year sales increases for the auto industry. Ford Motor Co., General Motors Co., and Chrysler Group L.L.C. saw double digit sales gains over the same month last year, when GM was headed into bankruptcy, joining Chrysler”.....Read the entire article.

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Are Gulf Oil Disaster Stocks Way Oversold?

Goldman Sachs Daniel Boyd feels the market sell down for offshore drillers is overdone.

Goldman:
Investor fears related to the six month moratorium on deepwater drilling in the US Gulf are overdone from a fundamental perspective, in our view as this represents just 3%-5% of annual revenues for the major companies. We ultimately expect the financial impact to be minimal (3%-7% of EPS in 2010 and we are slightly lowering our estimates to reflect this) and temporary given not only the importance of DW to US oil supply but that many of the rigs will move to international locations where there are current shortages.

They're approaching the trough valuations they hit when the world was ending in early 2009:

Here's a stock-by-stock breakdown of the price to book valuations:

Look for 2Q earnings as a positive catalyst:

With P/B and EV/GCI at “reasonable” trough levels, we recommend longer-term investors buy the group now though recognize that short-term investors might prefer to wait until either the oil spill is contained, which will give more confidence that the DW drilling ban will be lifted in six months, or 2Q results which we expect to confirm our view that global fundamentals will remain strong.

Mr. Boyd is also particularly bullish on another gulf disaster stock, outside of the drillers, Halliburton

(HAL)

We maintain our Buy rating on Halliburton. We think that the shares are now discounting trough assumptions given that it is trading at just an average historical multiple of the actual 1Q2010 trough in earnings.

Perhaps these are the smarter BP-disaster plays, the stocks which have fallen hard along with BP due to the gulf disaster, but aren't nearly as exposed to the ballooning potential liabilities.

From Vincent Fernando at The Business Insider

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The World’s Biggest LNG Producer Holding Onto it’s Gas

On paper, it should be a perfect match. Qatar has huge amounts of gas to export and its neighbours are desperately prowling for reliable energy supplies to power their emerging economies. But Qatar’s recent decision to rule out significant gas exports to its allies in the Gulf Cooperation Council from a huge gas project inaugurated earlier this month illustrates just how acute the gas needs are among some of the globe’s biggest oil producers.

The new Qatari jewel is the second phase of Al-Khaleej Gas, which is now producing about 1.25 billion cubic feet a day, equivalent to about 17% of the country’s production. Combined with AKG-1, the two projects account for more than a quarter of the country’s overall output. (Most of the remainder is liquefied and exported around the world.)

Qatar’s deputy prime minister and energy minister, Abdullah al-Attiyah, recently said that all of the gas production from AKG-2 would be used to meet domestic demand, especially for electricity generation, and to continue feeding the relentless double-digit economic growth of the past few years.

Qatar is already the world’s biggest LNG producer. It’s also a growing player in gas to liquids. But over the next decades, the country’s domestic gas demand is expected to double. And that increased gas demand can be seen throughout the region as oil rich countries work to grow their economies, especially for petrochemical and industrial sectors, as well as domestic desalination and electricity demand.

Regional electricity demand is expected to increase annually by more than 6% and it is already competing with gas demand from petrochemical plants, with countries like Kuwait forced to prioritize power over industrial output.....Read the entire article.

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Crude Oil Daily Technical Outlook For Thursday Morning

Intraday bias in crude oil remains neutral as sideway trading continues between 71.23 and 75.72. Break of 71.23 minor support will indicate that rebound from 64.23 is finished and will flip intraday bias back to the downside for retesting this low first. On the upside, above 75.72 will bring another rise, but after all, upside should be limited by 61.8% retracement of 87.15 to 64.23 at 78.39 and bring fall resumption.

In the bigger picture, prior break of 68.59/69.50 support zone affirms our view that whole medium term rebound from 33.2 has completed at 87.15 already, just ahead of 50% retracement of 147.27 to 33.2 at 90.24. Further decline should be seen to 50% retracement of 33.2 to 87.15 at 60.18 at least. Also, as rebound from 33.2 is viewed as as a correction to the whole correction that started at 2008 at 147.27, we'd anticipate a break of 33.2 low in the longer term. On the upside, break of resistance at 78 level is needed to be indicate that fall from 87.15 is completed. Otherwise, we'll stay bearish.....Nymex Crude Oil Continuous Contract 4 Hours Chart.

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Crude Oil Rises a Second Day on U.S. Home Sales Growth, Crude Stockpile Decline

Oil gained for a second day in New York after U.S. home sales rose and an industry funded report showed a decline in the country’s gasoline inventories, bolstering optimism that the economic recovery will accelerate. Oil advanced as the Standard & Poor’s 500 Index climbed after pending sales of existing homes rose to the highest level since October.

The American Petroleum Institute said last week’s gasoline supplies fell to the lowest this year. “The flow of data from the U.S. is still on the positive side, suggesting recovery,” said Toby Hassall, commodity analyst at CWA Global Markets Pty in Sydney. “If we start to see inventories decline in line with their seasonal pattern then that should offer support to the market.”

Crude oil for July delivery increased as much as $1.03, or 1.4 percent, to $73.89 a barrel in electronic trading on the New York Mercantile Exchange, and was at $73.77 at 1:36 p.m. Singapore time. Yesterday, the contract rose 28 cents, or 0.4 percent, to settle at $72.86. The S&P 500 increased 2.6 percent yesterday. That has pushed Asia stocks higher today with the MSCI Asia Pacific Index climbing the most since February. The index of pending U.S. home sales gained 6 percent after they were projected to rise 5 percent in April, according to the median of 40 forecasts in the Bloomberg survey.

“The economic numbers out of the U.S. have been improving gradually this month,” said Serene Lim, an energy commodity strategist at Australia & New Zealand Banking Group Ltd. in Singapore. “Yesterday’s API data was quite encouraging. We’ll have to see if the Department of Energy numbers match that, especially if the Cushing inventories fall”....Read the entire article.

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Crude Oil Bulls Gain Momentum on High Range Close

Crude oil closed higher due to short covering on Wednesday ending a two day correction off last Friday's high. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near term. Closes above the 20 day moving average crossing at 75.05 are needed to confirm that a short term low has been posted. If July renews the decline off May's high, last July's low crossing at 66.11 is the next downside target. First resistance is the 20 day moving average crossing at 75.05. Second resistance is last Friday's high crossing at 75.72. First support is the 10 day moving average crossing at 71.82. Second support is last Tuesday's low crossing at 67.15.

Natural gas closed higher on Wednesday as it extends the rally off last week's low. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. If July extends this week's rally, May's high crossing at 4.587 is the next upside target. If July renews the decline off May's high, the reaction low crossing at 3.971 is the next downside target. First resistance is today's high crossing at 4.440. Second resistance is May's high crossing at 4.587. First support is last Tuesday's low crossing at 4.036. Second support is the reaction low crossing at 3.971.

The U.S. Dollar closed higher on Wednesday but the mid-range close sets the stage for a steady opening on Thursday. Stochastics and the RSI are diverging but are neutral to bearish signaling that sideways trading is possible near term. If June renews this year's rally, the 87% retracement level of 2009's decline on the weekly continuation chart crossing at 87.79 is the next upside target. Closes below the reaction low crossing at 85.33 are needed to confirm that a short term top has been posted. First resistance is the reaction high crossing at 87.63. Second resistance is weekly resistance crossing at 87.79. First support is the 20 day moving average crossing at 86.01. Second support is the reaction low crossing at 85.33.

Gold closed lower due to profit taking on Wednesday. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. If August extends this week's rally, May's high crossing at 1251.40 is the next upside target. First resistance is Tuesday's high crossing at 1230.60. Second resistance is May's high crossing at 1251.40. First support is the 20 day moving average crossing at 1210.80. Second support is the 10 day moving average crossing at 1205.40.



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Crude Oil Prices Climb as Monthly Jobs Report Looms

Oil prices rose on Wednesday as investors began to place bets ahead of Friday's monthly jobs report that figures to provide fresh clues about the strength of the rebounding economy and demand for oil. At the same time, gasoline pump prices across the country continued their slow slide toward levels not seen since a year ago. Benchmark crude for July delivery climbed 90 cents at $73.48 a barrel on the New York Mercantile Exchange. The contract fell $1.39 to settle at $72.58 on Tuesday.

Retail gasoline prices fell for the 27th straight day, dropping 0.4 cent overnight to a national average of $2.723 per gallon, according to AAA, Wright Express and Oil Price Information Service. Prices have dropped 4.8 cents in the past week and 17.2 cents in the past month. Prices remain 19.8 cents over year ago levels. Oil prices have been supported by recent economic data that have come in better than expected, including a report Wednesday that showed pending home sales at their highest level in April since October. Demand for crude products also has been increasing.

The latest read on how the U.S. economy is doing comes Friday when the unemployment report for May is released. "If this market is disappointed, it could be a new leg down for gas prices," said Phil Flynn of PFGBest. Rising stock markets helped oil prices on Wednesday. The Dow Jones Industrial Average was up about 120 points at midday. The NASDAQ and the S&P 500 posted gains as well. Oil and gasoline prices have fallen about 16 percent in the past month, even as the spill in the Gulf of Mexico worsens. Tankers bringing imported oil to Gulf ports and taking refined product out continue to work around the huge slick at the mouth of the Mississippi River.

In other Nymex trading in July contracts, heating oil rose 3.99 cents to $2.0103 a gallon, and gasoline added 4.67 cents to $2.292 a gallon. Natural gas was up 14.3 cents at $4.391 per 1,000 cubic feet. In London, the Brent crude July contact was up $1.50 at $74.21 on the ICE futures exchange.....Here's more AP business news!

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Dan Dicker: BP Stock Is Bad News

Dan Dicker, TSC senior contributor, says he got the BP stock call wrong and is looking for a micro rally to sell his shares. Follow Dan on Twitter at Dan_Dicker.



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Crude Oil Daily Technical Outlook Wednesday Morning

Intraday bias in crude oil remains neutral for the moment. Break of 71.23 minor support will indicate that rebound from 64.23 is finished and will flip intraday bias back to the downside for retesting this low first. On the upside, above 75.72 will bring another rise, but after all, upside should be limited by 61.8% retracement of 87.15 to 64.23 at 78.39 and bring fall resumption.

In the bigger picture, prior break of 68.59/69.50 support zone affirms our view that whole medium term rebound from 33.2 has completed at 87.15 already, just ahead of 50% retracement of 147.27 to 33.2 at 90.24. Further decline should be seen to 50% retracement of 33.2 to 87.15 at 60.18 at least. Also, as rebound from 33.2 is viewed as as a correction to the whole correction that started at 2008 at 147.27, we'd anticipate a break of 33.2 low in the longer term. On the upside, break of resistance at 78 level is needed to be indicate that fall from 87.15 is completed. Otherwise, we'll stay bearish......Nymex Crude Oil Continuous Contract 4 Hours Chart.

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Crude Oil Falls for Third Day on Concern Slower Growth to Cut Fuel Demand

Oil fell for a third day as Chinese equities dropped, highlighting concerns about flagging fuel demand in the world’s second largest crude user, and as the euro fell against the dollar, limiting the appeal of commodities. Oil gave up earlier gains as China’s Shanghai Composite Exchange slumped to a 13 month low on concerns about banks’ abilities to raise funds. The country’s manufacturing index yesterday showed less than expected growth. The euro declined for a second day following reports yesterday European unemployment reached a 12 year high in April.

“The market is very sensitive to any news right now,” said Clarence Chu, a trader at options dealer Hudson Capital Energy in Singapore. “The dollar and euro exchange has been very volatile so that translates to the oil price. The soft euro will impact the dollar and that will hurt China’s export sector.” Crude oil for July delivery dropped 50 cents, or 0.7 percent, to $72.08 a barrel at 12:38 p.m. Singapore time on the New York Mercantile Exchange. Prices have swung between gains of 0.5 percent and losses of as much as 1.1 percent today.

Yesterday, the contract lost $1.39, or 1.9 percent, to $72.58. Futures fell 14 percent in May. The euro retreated as much as 0.3 percent today after hitting a four year low of $1.2111 yesterday. It was at $1.2191 at 12:39 p.m. Singapore time.
China’s purchasing manager’s index declined to 53.9 in May from 55.7 in the previous month. It fell short of a median 54.5 estimate from 18 economists surveyed by Bloomberg News. A gauge of manufacturing in the 16 member euro region declined to 55.8 from 57.6 the previous month, London based Markit Economics said.....Read the entire article.

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