Stephanie Link, director of research for TheStreet, reveals her diversified energy portfolio and the number one oil stock to buy.
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Monday, October 18, 2010
Top Oil Stock for $80 Oil
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Crude Oil,
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Phil Flynn: Ben's Bubble!
There is no doubt that Ben Bernanke can inflate the commodity bubble and at the same time let some of the air out. Ben Bernanke has somewhat disappointed commodity bulls by not being more forthcoming about the size and the scope of the next round of quantitative easing. While today the Wall Street Journal is raising legitimate concerns about the potential backlash from his policies due not only to rising commodity prices but also the surge of investment in some emerging markets.
The Wall Street Journal writes, “The Federal Reserve's latest effort to juice the U.S. economy is making many investors in emerging-market and commodity-producing nations confident the rally has longer to run. Others see trouble ahead, concerned too many investors are jumping into the rally and that these markets can't keep raising if the U.S. economy stays sluggish.” Already this year a record $60 billion has gone into emerging-market stock and bond funds... and investors expect another $500 Billion...”. The question becomes what will happen if investors run for the exits at the same time. Commodity inflation is now thought to be......Read the entire article.
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The Wall Street Journal writes, “The Federal Reserve's latest effort to juice the U.S. economy is making many investors in emerging-market and commodity-producing nations confident the rally has longer to run. Others see trouble ahead, concerned too many investors are jumping into the rally and that these markets can't keep raising if the U.S. economy stays sluggish.” Already this year a record $60 billion has gone into emerging-market stock and bond funds... and investors expect another $500 Billion...”. The question becomes what will happen if investors run for the exits at the same time. Commodity inflation is now thought to be......Read the entire article.
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SP 500 & Natural Gas Short Term Trend Charts
The broad markets along with metals have been on fire but in the last two weeks we have seen the sentiment become stronger. The extreme bullishness we are seeing has made it difficult for low risk swing traders to get in on the action simply because there have not been many sizable pullbacks. Instead the prices have been inching their way higher with very minor pullbacks before surging again.
The only way to take advantage of this type of price action in order to keep risk low is to take small positions when the market drops to the 5, 10 or 14 moving averages with a mental stop to exit the position if the market closes below the 14ma. Any position take up here should be small because the market is in runaway mode, meaning everyone is buying on the smallest of dips. The largest moves tend to be near the end of a trend which is why I feel this market could keep running for a few more weeks before taking a sharp plunge.
Natural Gas
If you have been reading my work over the past year you should know I don’t like natural gas. More people have lost money trying to play natural gas than any other investment vehicle out there which is why I don’t cover it very often. Many of you have been asking about Natural Gas (UNG) so here are my thoughts on it.
UNG has been in a down trend for several years and the only trades should be short positions at this time. The argument from some is that it’s undervalued and with winter just around the corner prices should go up. It’s a valid argument but price action is what makes traders money, not fundamentals.
The daily chart of Nat Gas below shows what I feel is about to happen. Remember, UNG is a terrible fund to be buying. Unless natural gas is moving strongly in your favor, this fund continually loses value simply because of the way its created.
Looking at the actual natural gas commodity chart is a different story… The trend is still down, but it does look as though it’s trying to form a base when looking at a 3 year weekly chart. That being said, there is still a very good chance we see gas test near the $3 level before starting a new trend so trying to pick a bottom here is not something I would be doing.
Trading Conclusion:
In short, the equities market is still in a strong uptrend. I’m not comfortable taking any large positions at this stage of the game but if we get a setup I will not hesitate to enter with a little money.
As for natural gas...trying to pick a bottom is deadly in a down trend as bounces tend to be short lived or flat. I will cover the dollar, gold, oil and the market internals in the member’s pre market morning video....
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Chris Vermeulen at The Gold And Oil Guy.Com
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The only way to take advantage of this type of price action in order to keep risk low is to take small positions when the market drops to the 5, 10 or 14 moving averages with a mental stop to exit the position if the market closes below the 14ma. Any position take up here should be small because the market is in runaway mode, meaning everyone is buying on the smallest of dips. The largest moves tend to be near the end of a trend which is why I feel this market could keep running for a few more weeks before taking a sharp plunge.
Natural Gas
If you have been reading my work over the past year you should know I don’t like natural gas. More people have lost money trying to play natural gas than any other investment vehicle out there which is why I don’t cover it very often. Many of you have been asking about Natural Gas (UNG) so here are my thoughts on it.
UNG has been in a down trend for several years and the only trades should be short positions at this time. The argument from some is that it’s undervalued and with winter just around the corner prices should go up. It’s a valid argument but price action is what makes traders money, not fundamentals.
The daily chart of Nat Gas below shows what I feel is about to happen. Remember, UNG is a terrible fund to be buying. Unless natural gas is moving strongly in your favor, this fund continually loses value simply because of the way its created.
Looking at the actual natural gas commodity chart is a different story… The trend is still down, but it does look as though it’s trying to form a base when looking at a 3 year weekly chart. That being said, there is still a very good chance we see gas test near the $3 level before starting a new trend so trying to pick a bottom here is not something I would be doing.
Trading Conclusion:
In short, the equities market is still in a strong uptrend. I’m not comfortable taking any large positions at this stage of the game but if we get a setup I will not hesitate to enter with a little money.
As for natural gas...trying to pick a bottom is deadly in a down trend as bounces tend to be short lived or flat. I will cover the dollar, gold, oil and the market internals in the member’s pre market morning video....
Just Click Here to get my daily ETF Trend Newsletter in your email inbox.
Happy Trading,
Chris Vermeulen at The Gold And Oil Guy.Com
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Crude Oil Technical Outlook For Monday Morning Oct. 18th
Crude oil was slightly lower overnight as it extends last week's decline below the 10 day moving average crossing at 82.96. Stochastics and the RSI are overbought, diverging and are turning bearish signaling that additional weakness is possible.
Closes below the 20 day moving average crossing at 80.82 would confirm that a short term top has been posted. If December renews the rally off August's low, the 75% retracement level of May's decline crossing at 88.07 is the next upside target.
First resistance is the reaction high crossing at 85.08
Second resistance is the 75% retracement level of May's decline crossing at 88.07
Crude oil pivot point for Monday morning is 81.78
First support is the 20 day moving average crossing at 80.82
Second support is the reaction low crossing at 75.10
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Closes below the 20 day moving average crossing at 80.82 would confirm that a short term top has been posted. If December renews the rally off August's low, the 75% retracement level of May's decline crossing at 88.07 is the next upside target.
First resistance is the reaction high crossing at 85.08
Second resistance is the 75% retracement level of May's decline crossing at 88.07
Crude oil pivot point for Monday morning is 81.78
First support is the 20 day moving average crossing at 80.82
Second support is the reaction low crossing at 75.10
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Sunday, October 17, 2010
Crude Oil Declines on Weaker Outlook in Fuel Demand
Crude oil declined for a third day in New York amid speculation that builders in the U.S. started fewer homes in September and as the dollar gained against the euro, curbing the appeal of commodities as an alternative investment. Crude fell as the U.S. currency climbed for a second day after rebounding from the lowest level since January. Work began on 580,000 houses at an annual rate, down 3 percent from August, according to the median estimate of 56 economists surveyed by Bloomberg News before Commerce Department figures due tomorrow. Futures are on the longest losing streak since September. “Oil continues to be heavily impacted by U.S. dollar movements,” said Ben Westmore, minerals and energy economist at National Australia Bank Ltd. in Melbourne.
The November contract dropped as much as 69 cents, or 0.9 percent, to $80.56 a barrel in electronic trading on the New York Mercantile Exchange, and was at $80.77 at 11:08 a.m. Singapore time. Futures lost $1.44, or 1.7 percent, to $81.25 on Oct. 15, the lowest settlement since Sept. 30. The market is in its longest pullback since a four day drop through Sept. 17. Prices slipped 1.7 percent last week and are up 1.8 percent this year. Brent crude for December settlement declined as much as 65 cents, or 0.8 percent, to $81.80 a barrel on the ICE Futures Europe exchange in London. The contract on Oct. 15 dropped $1.75, or 2.1 percent, to $82.45......Read the entire article.
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The November contract dropped as much as 69 cents, or 0.9 percent, to $80.56 a barrel in electronic trading on the New York Mercantile Exchange, and was at $80.77 at 11:08 a.m. Singapore time. Futures lost $1.44, or 1.7 percent, to $81.25 on Oct. 15, the lowest settlement since Sept. 30. The market is in its longest pullback since a four day drop through Sept. 17. Prices slipped 1.7 percent last week and are up 1.8 percent this year. Brent crude for December settlement declined as much as 65 cents, or 0.8 percent, to $81.80 a barrel on the ICE Futures Europe exchange in London. The contract on Oct. 15 dropped $1.75, or 2.1 percent, to $82.45......Read the entire article.
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Saturday, October 16, 2010
Gold's Uptrend Unaffected by Surprising Fall after Bernanke's Comments
World financial markets were influenced by 2 important themes last week. These themes are expected to affect investment appetite and asset price movements in the medium term. The first is Fed's return to quantitative easing. As indicated in the September FOMC statement, most Fed members inclined to implementing additional easing measures to boost the economy. Apart from buying long term Treasury securities, members also talked about strategies to anchor inflation expectations.
These views were echoed by Fed Chairman Ben Bernanke during his speech at a Boston Fed conference on Friday. Bernanke said the Fed may expand asset purchases or change the language in its statement. He said that 'there would appear, all else being equal, to be a case for further action'.
Speculations for further QE have sent the dollar to a 15-year low against the yen and the USD index to the lowest level since December 11. Weakness in USD has caused abundant capitals flowing into emerging countries and pushed currencies in these countries higher. This has triggered some sorts of 'intervention' in emerging markets. For instance, Brazil and South Korea are stepping up attempts to control their currencies. This round of currency tensions have been driven by global economic imbalances.
While advanced economies have been trying to depreciate their currencies and urge emerging countries (such as China) to speed up appreciation, emerging economies are unwilling to accept the 'beggar thy neighbor' policy. The new rounds of QE and currency tensions are particularly influential for gold and the precious metal complex......Read the entire article.
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These views were echoed by Fed Chairman Ben Bernanke during his speech at a Boston Fed conference on Friday. Bernanke said the Fed may expand asset purchases or change the language in its statement. He said that 'there would appear, all else being equal, to be a case for further action'.
Speculations for further QE have sent the dollar to a 15-year low against the yen and the USD index to the lowest level since December 11. Weakness in USD has caused abundant capitals flowing into emerging countries and pushed currencies in these countries higher. This has triggered some sorts of 'intervention' in emerging markets. For instance, Brazil and South Korea are stepping up attempts to control their currencies. This round of currency tensions have been driven by global economic imbalances.
While advanced economies have been trying to depreciate their currencies and urge emerging countries (such as China) to speed up appreciation, emerging economies are unwilling to accept the 'beggar thy neighbor' policy. The new rounds of QE and currency tensions are particularly influential for gold and the precious metal complex......Read the entire article.
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Oil N' Gold: Crude Oil Weekly Technical Outlook
Crude oil attempted to draw support from 4 hours 55 EMA last week but lacked decisive strength to resume recent rally. Upside was limited below 84.43 resistance as crude oil weakened again towards the end of the week. Intraday bias remains neutral. Note that there is no confirmation of reversal yet. But even in case of another rise, we'll continue to focus on reversal signal inside resistance zone of 82.97/87.15. On the downside, break of 78.04 support will indicate that rise from 70.76 is over and turn focus back to this support level.
In the bigger picture, after all, we're still favoring the case that medium term rally from 33.2 is already completed at 87.15. Recovery from 64.23 is treated as a correction and should be near to completion, if not finished. Even in case of another rise, strong resistance should be seen as crude oil enters into resistance zone of 82.97/87.15 and bring reversal. We're still expecting another fall to 60 psychological level (50% retracement of 33.2 to 87.15 at 60.18). However, decisive break of 87.15 will put focus on long term fibo level at 50% retracement of 147.27 to 33.2 at 90.24.
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. Price actions from 147.27 are treated as consolidation in the larger up trend and with 90.24 fibo resistance intact, a test of 33.2 eventually is in favor. Though, decisive break of 90.24 will argue that crude oil will bring stronger rally to above 100 psychological level as a relatively powerful second wave of the consolidation continues.
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In the bigger picture, after all, we're still favoring the case that medium term rally from 33.2 is already completed at 87.15. Recovery from 64.23 is treated as a correction and should be near to completion, if not finished. Even in case of another rise, strong resistance should be seen as crude oil enters into resistance zone of 82.97/87.15 and bring reversal. We're still expecting another fall to 60 psychological level (50% retracement of 33.2 to 87.15 at 60.18). However, decisive break of 87.15 will put focus on long term fibo level at 50% retracement of 147.27 to 33.2 at 90.24.
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. Price actions from 147.27 are treated as consolidation in the larger up trend and with 90.24 fibo resistance intact, a test of 33.2 eventually is in favor. Though, decisive break of 90.24 will argue that crude oil will bring stronger rally to above 100 psychological level as a relatively powerful second wave of the consolidation continues.
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Friday, October 15, 2010
Commodity Corner: Crude Oil, Natural Gas, Gasoline Down for the Week
A stronger dollar, spurred by indications that the Federal Reserve plans to buy more U.S. government debt, placed downward pressure on crude oil Friday. Oil for November delivery fell $1.44 to settle at $81.25 per barrel. The euro, meanwhile, was down 0.8% against the dollar; a weaker dollar typically makes oil, priced in dollars, more attractive to buyers holding other currencies.
Boosting the greenback were comments Friday from Federal Reserve Chairman Ben Bernanke, who said Friday that the Fed was prepared to take additional measures to combat high unemployment and the threat of deflation. Under this "quantitative easing" process, the Fed would try to stimulate the economy by printing more money to buy debt. By increasing the money supply, the central bank hopes the measures would make borrowing cheaper for consumers and thus encourage Americans to spend more. Crude oil traded from $81.22 to $83.33 Friday, and it is down 1.2% for the week.
The November natural gas futures price, already buffeted in recent weeks by mild weather and abundant inventories, settled at $3.535 per thousand cubic feet Friday. The intraday trading range for gas was $3.55 to $3.68 Friday, and the commodity's settlement price fell 1.8% during the week. The front month price for gasoline declined four cents Friday to settle at $2.10 a gallon. November gasoline traded from $2.11 to $2.15, and it is down 3.2% for the week.
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Boosting the greenback were comments Friday from Federal Reserve Chairman Ben Bernanke, who said Friday that the Fed was prepared to take additional measures to combat high unemployment and the threat of deflation. Under this "quantitative easing" process, the Fed would try to stimulate the economy by printing more money to buy debt. By increasing the money supply, the central bank hopes the measures would make borrowing cheaper for consumers and thus encourage Americans to spend more. Crude oil traded from $81.22 to $83.33 Friday, and it is down 1.2% for the week.
The November natural gas futures price, already buffeted in recent weeks by mild weather and abundant inventories, settled at $3.535 per thousand cubic feet Friday. The intraday trading range for gas was $3.55 to $3.68 Friday, and the commodity's settlement price fell 1.8% during the week. The front month price for gasoline declined four cents Friday to settle at $2.10 a gallon. November gasoline traded from $2.11 to $2.15, and it is down 3.2% for the week.
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Rigzone
Sharon Epperson: Crude Oil and Gold Next Week
CNBC's Sharon Epperson discusses the day's activity in the commodities markets, and looks ahead to where oil and gold are likely headed next week.
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Stock Market and Commodities Commentary For Friday Evening Oct. 15th
The S&P 500 index closed lower due to profit taking on Friday as it consolidates below the 87% retracement level of the April-July decline crossing at 1178.21. The mid range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are overbought, diverging and are turning bearish hinting that a short term top might be in or is near. Closes below the 20 day moving average crossing at 1148.52 are needed to confirm that a short term top has been posted. If December extends the aforementioned rally, April's high crossing at 1203.00 is the next upside target. First resistance is Wednesday's high crossing at 1180.80. Second resistance is April's high crossing at 1203.00. First support is the 10 day moving average crossing at 1160.64. Second support is the 20 day moving average crossing at 1148.52.
Crude oil closed lower due to profit taking on Friday as it consolidates some of the rally off August's low. The low range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near term. Closes below the 20 day moving average crossing at 80.62 are needed to confirm that a short term top has been posted. Closes above last week's high crossing at 85.08 are needed to renew the rally off August's low. First resistance is last week's high crossing at 85.08. Second resistance is the 75% retracement level of May's decline crossing at 88.07. First support last week's low crossing at 80.98. Second support is the 20 day moving average crossing at 80.62.
Natural gas closed lower on Friday renewing this year's decline. The low-range close sets the stage for a steady to lower opening on Monday. However, stochastics and the RSI are oversold and turning neutral to bullish hinting that a low might be in or is near. Closes above the 20 day moving average crossing at 3.827 are needed to confirm that a low has been posted. If November extends this year's decline, weekly support crossing at 3.390 is the next downside target. First resistance is the 20 day moving average crossing at 3.827. Second resistance is the reaction high crossing at 4.250. First support is today's low crossing at 3.520. Second support is weekly support crossing at 3.390.
Gold closed lower due to profit taking on Friday as it consolidates some of the rally off July's low. The low range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are overbought, diverging but remain neutral to bullish signaling that sideways to higher prices is possible near term. Upside targets will now be hard to project if it extends this year's rally into uncharted territory. Closes below the 20 day moving average crossing at 1324.30 would confirm that a short term top has been posted. First resistance is Thursday's high crossing at 1388.10. First support is the 10 day moving average crossing at 1350.00. Second support is the 20 day moving average crossing at 1324.30.
The U.S. Dollar closed higher due to short covering on Friday and posted a key reversal up. The high range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are oversold, diverging and are turning neutral to bullish hinting that a short term low might be in or is near. Closes above the 20 day moving average crossing at 78.66 would confirm that a short-term low has been posted. If December extends the decline off August's high, the 87% retracement level of the 2009-2010 rally on the weekly continuation chart crossing at 76.07 is the next downside target. First resistance is the 10 day moving average crossing at 77.61. Second resistance is the 20 day moving average crossing at 78.66. First support is today's low crossing at 76.34. Second support is the 87% retracement level of the 2009-2010 rally on the weekly continuation chart crossing at 76.07.
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Crude oil closed lower due to profit taking on Friday as it consolidates some of the rally off August's low. The low range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near term. Closes below the 20 day moving average crossing at 80.62 are needed to confirm that a short term top has been posted. Closes above last week's high crossing at 85.08 are needed to renew the rally off August's low. First resistance is last week's high crossing at 85.08. Second resistance is the 75% retracement level of May's decline crossing at 88.07. First support last week's low crossing at 80.98. Second support is the 20 day moving average crossing at 80.62.
Natural gas closed lower on Friday renewing this year's decline. The low-range close sets the stage for a steady to lower opening on Monday. However, stochastics and the RSI are oversold and turning neutral to bullish hinting that a low might be in or is near. Closes above the 20 day moving average crossing at 3.827 are needed to confirm that a low has been posted. If November extends this year's decline, weekly support crossing at 3.390 is the next downside target. First resistance is the 20 day moving average crossing at 3.827. Second resistance is the reaction high crossing at 4.250. First support is today's low crossing at 3.520. Second support is weekly support crossing at 3.390.
Gold closed lower due to profit taking on Friday as it consolidates some of the rally off July's low. The low range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are overbought, diverging but remain neutral to bullish signaling that sideways to higher prices is possible near term. Upside targets will now be hard to project if it extends this year's rally into uncharted territory. Closes below the 20 day moving average crossing at 1324.30 would confirm that a short term top has been posted. First resistance is Thursday's high crossing at 1388.10. First support is the 10 day moving average crossing at 1350.00. Second support is the 20 day moving average crossing at 1324.30.
The U.S. Dollar closed higher due to short covering on Friday and posted a key reversal up. The high range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are oversold, diverging and are turning neutral to bullish hinting that a short term low might be in or is near. Closes above the 20 day moving average crossing at 78.66 would confirm that a short-term low has been posted. If December extends the decline off August's high, the 87% retracement level of the 2009-2010 rally on the weekly continuation chart crossing at 76.07 is the next downside target. First resistance is the 10 day moving average crossing at 77.61. Second resistance is the 20 day moving average crossing at 78.66. First support is today's low crossing at 76.34. Second support is the 87% retracement level of the 2009-2010 rally on the weekly continuation chart crossing at 76.07.
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Is Exxon The Best Long Term Oil Play?
Dan Dicker, senior contributor for TheStreet.Com , says if he could recommend one oil stock to buy and hold for your kids it would be Exxon.
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Phil Flynn: I'm Starting With The Man With The Money
The Europeans are Asking Him To Change His Ways. And No Message Could Have Been Any Clearer; If You Wanna Make The World A Better Place, If You Wanna Make The World A Better Place Take A Look At Yourself, And Then make a change. Or stop printing some for a change. The Man in the mirror or at least the spotlight is Fed Chairman Ben Bernanke! The whole world has gone on an anticipatory tear after his promise to print more money and now some officials are fearful that this printing binge could destabilize the global economy and start a currency war.
The Financial Times says that one unnamed European official said that a further aggressive round of qualitative easing by the Federal Reserve would make US exports more competitive at the expense of its rival. This comes as an ironic situation especially considering the fact that US trade deficit hit 46.3 billion in August as imports from China continue to rise. China of course might be named a currency manipulator which could even increase the chances of a potential currency war looming ahead. This comes after the dollar hit a 15 year low against the yen and metal prices such as silver and copper soared yesterday.....Read the entire article.
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The Financial Times says that one unnamed European official said that a further aggressive round of qualitative easing by the Federal Reserve would make US exports more competitive at the expense of its rival. This comes as an ironic situation especially considering the fact that US trade deficit hit 46.3 billion in August as imports from China continue to rise. China of course might be named a currency manipulator which could even increase the chances of a potential currency war looming ahead. This comes after the dollar hit a 15 year low against the yen and metal prices such as silver and copper soared yesterday.....Read the entire article.
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Crude Oil Technical Outlook For Friday Morning Oct. 15th
Crude oil was slightly lower overnight as it extends Thursday's decline but remains above the 10 day moving average crossing at 83.13. At the same time, stochastics and the RSI are overbought, diverging but are turning neutral to bullish signaling that additional short term gains are possible.
If December renews the rally off last week's low, the 75% retracement level of May's decline crossing at 88.07 is the next upside target. Closes below the 20 day moving average crossing at 80.68 would confirm that a short term top has been posted.
First resistance is last Wednesday's high crossing at 85.08.
Second resistance is the 75% retracement level of May's decline crossing at 88.07.
First support is the 10 day moving average crossing at 83.13.
Second support is the 20 day moving average crossing at 80.68.
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If December renews the rally off last week's low, the 75% retracement level of May's decline crossing at 88.07 is the next upside target. Closes below the 20 day moving average crossing at 80.68 would confirm that a short term top has been posted.
First resistance is last Wednesday's high crossing at 85.08.
Second resistance is the 75% retracement level of May's decline crossing at 88.07.
First support is the 10 day moving average crossing at 83.13.
Second support is the 20 day moving average crossing at 80.68.
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Thursday, October 14, 2010
Commodity Corner: Crude Falls on Declining Demand
Crude futures for November delivery edged lower Thursday as government reports showed demand for U.S. petroleum dropped to its lowest level in more than 10 months. Front month crude fell 32 cents, settling at $82.69 a barrel on the New York Mercantile Exchange.
According to the U.S. Department of Energy's Energy Information Administration (EIA), oil inventories decreased by 400,000 for the week ended Oct. 8 while gasoline stockpiles decreased by 1.8 million barrels to 218.2 million barrels. Analysts claim crude fell due to an eight and a-half month low in imports, causing inventories to decline. A weaker economy decreases demand for crude. First time claims for unemployment insurance increased by 13,000 from the previous week, reported the U.S. Department of Labor.
Additionally, the euro strengthened against the dollar. The euro rose 0.6 percent, while the ICE dollar index was down 0.6 percent. A weaker dollar heightens the appeal of commodities, making it cheaper for foreign currencies. The falling dollar has kept oil futures above the $80 mark for more than a week. The intraday range for oil prices was $82.21 to $84.12.
November natural gas lost 3.9 cents to settle at $3.66 per thousand cubic feet on the NYMEX Thursday. The EIA reported an increase of 91 billion cubic feet for natural gas inventories. Natural gas stockpiles for the week ended Oct. 8 were 3.59 trillion cubic feet. Natural gas traded from $3.60 to $3.76 Thursday. The price of gasoline also settled lower Thursday at $2.14 a gallon. During Thursday's trading session, gasoline prices fluctuated between $2.12 and $2.185.
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According to the U.S. Department of Energy's Energy Information Administration (EIA), oil inventories decreased by 400,000 for the week ended Oct. 8 while gasoline stockpiles decreased by 1.8 million barrels to 218.2 million barrels. Analysts claim crude fell due to an eight and a-half month low in imports, causing inventories to decline. A weaker economy decreases demand for crude. First time claims for unemployment insurance increased by 13,000 from the previous week, reported the U.S. Department of Labor.
Additionally, the euro strengthened against the dollar. The euro rose 0.6 percent, while the ICE dollar index was down 0.6 percent. A weaker dollar heightens the appeal of commodities, making it cheaper for foreign currencies. The falling dollar has kept oil futures above the $80 mark for more than a week. The intraday range for oil prices was $82.21 to $84.12.
November natural gas lost 3.9 cents to settle at $3.66 per thousand cubic feet on the NYMEX Thursday. The EIA reported an increase of 91 billion cubic feet for natural gas inventories. Natural gas stockpiles for the week ended Oct. 8 were 3.59 trillion cubic feet. Natural gas traded from $3.60 to $3.76 Thursday. The price of gasoline also settled lower Thursday at $2.14 a gallon. During Thursday's trading session, gasoline prices fluctuated between $2.12 and $2.185.
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Sharon Epperson Discusses Today's Activity in the Commodities Markets
CNBC's Sharon Epperson discusses the day's activity in the commodities markets, and looks ahead to where oil and gold are likely headed tomorrow.
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Stock Market and Commodities Commentary For Thursday Evening Oct. 14th
The S&P 500 index closed lower due to profit taking on Thursday as it consolidates below the 87% retracement level of the April-July decline crossing at 1178.21. The mid range close sets the stage for a steady to lower opening on Friday. At the same time, stochastics and the RSI are overbought, diverging and are turning neutral to bearish hinting that a short term top might be in or is near. Closes below the 20 day moving average crossing at 1145.58 are needed to confirm that a short term top has been posted. If December extends the aforementioned rally, April's high crossing at 1203.00 is the next upside target. First resistance is Wednesday's high crossing at 1180.80. Second resistance is April's high crossing at 1203.00. First support is the 10 day moving average crossing at 1157.02. Second support is the 20 day moving average crossing at 1145.58.
Crude oil closed lower due to profit taking on Thursday but remains above the 10 day moving average crossing at 83.04. The low range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI are neutral signaling that sideways to higher prices are possible near term. Closes above last week's high crossing at 85.08 are needed to renew the rally off August's low. Closes below the 20 day moving average crossing at 80.35 are needed to confirm that a short term top has been posted. First resistance is last week's high crossing at 85.08. Second resistance is the 75% retracement level of May's decline crossing at 88.07. First support last week's low crossing at 80.98. Second support is the 20 day moving average crossing at 80.35.
Natural gas closed lower on Thursday ending a two day short covering bounce off Tuesday's low. The low range close sets the stage for a steady to lower opening on Friday. However, stochastics and the RSI are oversold and turning neutral to bullish hinting that a low might be in or is near. Closes above the 20 day moving average crossing at 3.860 are needed to confirm that a low has been posted. If November extends this year's decline, weekly support crossing at 3.390 is the next downside target. First resistance is the 20 day moving average crossing at 3.860. Second resistance is the reaction high crossing at 4.250. First support is Tuesday's low crossing at 3.545. Second support is weekly support crossing at 3.390.
Gold closed higher on Thursday as it extends the rally off July's low. The mid-range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices is possible near term. Upside targets will now be hard to project as it extends this year's rally. Closes below the 20 day moving average crossing at 1320.00 would confirm that a short term top has been posted. First resistance is today's high crossing at 1388.10. First support is the 10 day moving average crossing at 1345.40. Second support is the 20 day moving average crossing at 1320.00.
The U.S. Dollar closed lower on Thursday renewing the decline off August's high. The mid-range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI are oversold, diverging but are turning neutral signaling that additional weakness is possible near term. If December extends the decline off August's high, the 87% retracement level of the 2009-2010 rally on the weekly continuation chart crossing at 76.07 is the next downside target. Closes above the 20 day moving average crossing at 78.88 would confirm that a short term low has been posted. First resistance is the 10-day moving average crossing at 77.72. Second resistance is the 20 day moving average crossing at 78.88. First support is today's low crossing at 76.48. Second support is the 87% retracement level of the 2009-2010 rally on the weekly continuation chart crossing at 76.07.
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Crude oil closed lower due to profit taking on Thursday but remains above the 10 day moving average crossing at 83.04. The low range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI are neutral signaling that sideways to higher prices are possible near term. Closes above last week's high crossing at 85.08 are needed to renew the rally off August's low. Closes below the 20 day moving average crossing at 80.35 are needed to confirm that a short term top has been posted. First resistance is last week's high crossing at 85.08. Second resistance is the 75% retracement level of May's decline crossing at 88.07. First support last week's low crossing at 80.98. Second support is the 20 day moving average crossing at 80.35.
Natural gas closed lower on Thursday ending a two day short covering bounce off Tuesday's low. The low range close sets the stage for a steady to lower opening on Friday. However, stochastics and the RSI are oversold and turning neutral to bullish hinting that a low might be in or is near. Closes above the 20 day moving average crossing at 3.860 are needed to confirm that a low has been posted. If November extends this year's decline, weekly support crossing at 3.390 is the next downside target. First resistance is the 20 day moving average crossing at 3.860. Second resistance is the reaction high crossing at 4.250. First support is Tuesday's low crossing at 3.545. Second support is weekly support crossing at 3.390.
Gold closed higher on Thursday as it extends the rally off July's low. The mid-range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices is possible near term. Upside targets will now be hard to project as it extends this year's rally. Closes below the 20 day moving average crossing at 1320.00 would confirm that a short term top has been posted. First resistance is today's high crossing at 1388.10. First support is the 10 day moving average crossing at 1345.40. Second support is the 20 day moving average crossing at 1320.00.
The U.S. Dollar closed lower on Thursday renewing the decline off August's high. The mid-range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI are oversold, diverging but are turning neutral signaling that additional weakness is possible near term. If December extends the decline off August's high, the 87% retracement level of the 2009-2010 rally on the weekly continuation chart crossing at 76.07 is the next downside target. Closes above the 20 day moving average crossing at 78.88 would confirm that a short term low has been posted. First resistance is the 10-day moving average crossing at 77.72. Second resistance is the 20 day moving average crossing at 78.88. First support is today's low crossing at 76.48. Second support is the 87% retracement level of the 2009-2010 rally on the weekly continuation chart crossing at 76.07.
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Crude Oil Falls as Report Shows Petroleum Demand Decreases to 10 Month Low
Crude oil fell after a government report showed U.S. petroleum demand dropped to the lowest level in more than 10 months as the economy struggled to recover. Crude declined for a third day this week after the Energy Department reported total petroleum demand decreased 0.7 percent to 18.3 million barrels a day in the week ended Oct. 8, the lowest level since the seven days ended Nov. 27, 2009. A Labor Department report today showed U.S. jobless claims unexpectedly rose to 462,000 in the week to Oct. 9.
“The demand numbers were very weak,” said Tim Evans, an energy analyst at Citi Futures Perspective in New York. “We don’t really have a bull market unless we have stronger consumer demand.” Oil for November delivery fell 34 cents, or 0.4 percent, to $82.67 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Earlier today, futures rose to a one week high of $84.12. Prices have climbed 4.2 percent this year.
Brent crude for November settlement fell 35 cents, or 0.4 percent, to $84.29 a barrel on the ICE Futures Europe exchange in London. The Energy Department reported demand for gasoline decreased 2 percent to 8.81 million barrels a day, the lowest level since the week ended Feb. 12. Oil also declined as the report showed crude supplies fell 416,000 barrels last week, less than the American Petroleum Institute estimated yesterday......Read the entire article.
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“The demand numbers were very weak,” said Tim Evans, an energy analyst at Citi Futures Perspective in New York. “We don’t really have a bull market unless we have stronger consumer demand.” Oil for November delivery fell 34 cents, or 0.4 percent, to $82.67 a barrel at the 2:30 p.m. close of floor trading on the New York Mercantile Exchange. Earlier today, futures rose to a one week high of $84.12. Prices have climbed 4.2 percent this year.
Brent crude for November settlement fell 35 cents, or 0.4 percent, to $84.29 a barrel on the ICE Futures Europe exchange in London. The Energy Department reported demand for gasoline decreased 2 percent to 8.81 million barrels a day, the lowest level since the week ended Feb. 12. Oil also declined as the report showed crude supplies fell 416,000 barrels last week, less than the American Petroleum Institute estimated yesterday......Read the entire article.
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Gold/Dollar Play is Getting Extreme
A lot of what is driving the recent stock market and commodity rally can be attributed to the plummeting Dollar. To some degree the rally in Gold (GLD) is almost getting parabolic in nature. While we've been longer-term bullish on Gold for some time, such a strong uptrend becomes more and more likely to break down sharply. Feel free to ride up such a strong uptrend, but take profits quickly and be prepared to jump on the bearish side should it break down -- because it will correct sharply and quickly when it does.
Take a look below at the recent very strong inverse correlation between GLD (yellow) and the Dollar ETF (UUP, green). When/if this does break down a bit with the Dollar rallying and Gold selling off, option traders can consider a Long UUP, Short GLD paired trade strategy. But don't jump in front of this runaway train yet.
And wherefore the Dollar, which more and more seems to be the main driver of the recent big rally in many commodities and strenght in stocks. Using the US Dollar Index (DXY), which goes back 30 years+, you can see below that we've reached the lowest levels ever since the economic crisis occurred. As I've mentioned previously, a weak currency is NOT good for a country and its economy over the long-term (although some make the argument that it does boost the power of our exports). Buying power and wealth of Americans are badly hurt when foreign good become more relatively expensive and inflation raises the prices of basic commodities. And think about it from a traveler's perspective ... if you travel to a country with a very poor exchange rate, making it basically dirt cheap to go there ... what do you equate that with? A third world or emerging economy, basically. Not good for the once strong USA, in my view.
So where can the Dollar bottom out? Well, looking at the DXY Weekly Chart below, you can see we're in a pretty steep downtrend, so don't fade this just yet. Notice that the recent downtrend began when we failed at the same top that was resistance in late 2008 and early 2009. We are fast approaching the area where the DXY bottomed in late 2009, and beyond that lies the significant lows of the 2008 panic.
Bottom line: The Dollar and its various ETFs and Indexes are in a free fall, so don't jump in front of a falling knife. This is contributing to strong rallies in Gold and other commodities and also helping push stocks higher to some degree. These types of parabolic trends in Dollar and Gold will tend to steepen and steepen until it breaks down sharply, right at the top (or bottom) when the biggest greed of an "easy trade" comes in. So ride these trends while they last, but limit exposure and take profits quickly, when these end they usually reverse hard and rapidly, and jump on the other side for profits in both directions from option trading.
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Take a look below at the recent very strong inverse correlation between GLD (yellow) and the Dollar ETF (UUP, green). When/if this does break down a bit with the Dollar rallying and Gold selling off, option traders can consider a Long UUP, Short GLD paired trade strategy. But don't jump in front of this runaway train yet.
And wherefore the Dollar, which more and more seems to be the main driver of the recent big rally in many commodities and strenght in stocks. Using the US Dollar Index (DXY), which goes back 30 years+, you can see below that we've reached the lowest levels ever since the economic crisis occurred. As I've mentioned previously, a weak currency is NOT good for a country and its economy over the long-term (although some make the argument that it does boost the power of our exports). Buying power and wealth of Americans are badly hurt when foreign good become more relatively expensive and inflation raises the prices of basic commodities. And think about it from a traveler's perspective ... if you travel to a country with a very poor exchange rate, making it basically dirt cheap to go there ... what do you equate that with? A third world or emerging economy, basically. Not good for the once strong USA, in my view.
So where can the Dollar bottom out? Well, looking at the DXY Weekly Chart below, you can see we're in a pretty steep downtrend, so don't fade this just yet. Notice that the recent downtrend began when we failed at the same top that was resistance in late 2008 and early 2009. We are fast approaching the area where the DXY bottomed in late 2009, and beyond that lies the significant lows of the 2008 panic.
Bottom line: The Dollar and its various ETFs and Indexes are in a free fall, so don't jump in front of a falling knife. This is contributing to strong rallies in Gold and other commodities and also helping push stocks higher to some degree. These types of parabolic trends in Dollar and Gold will tend to steepen and steepen until it breaks down sharply, right at the top (or bottom) when the biggest greed of an "easy trade" comes in. So ride these trends while they last, but limit exposure and take profits quickly, when these end they usually reverse hard and rapidly, and jump on the other side for profits in both directions from option trading.
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Phil Flynn: Do You Remember When OPEC Used To Matter?
It seemed like the greedy cartel held the fate of the global economy right square in their hand. Press people would stalk different oil ministers desperately trying to get a comment or a clue to whether or not they would dispense their favor on the world and pump more oil or cut production and thumb their nose at the world.
These oil ministers loved the attention. For a couple of weeks a year they were like rock stars with paparazzi following them all around. Not bad for an evil cabal of market conspirators. Yet now, even though some press is attending the OPEC meeting, the guys are not getting the attention that they are used to. It is kind of like a celebrity on the decline that is quickly becoming yesterday’s news. There is no OPEC drama.
OPEC is living the economic dream. They are one of the biggest beneficiaries of the global economic crisis. OPEC is going to leave their production quotas unchanged and will continue to cheat on production as the opportunities arise. Why change things now when times are so good? Heck why constrain production when you have the global central banks around the globe doing your heavy lifting for you?
OPEC should get on their knees everyday and thank their lucky stars for a guy like Federal Reserve Chairman Ben Bernanke who is turning out to be OPEC’s best friend. Why Ben Bernanke? I will tell you why......Read the entire article.
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These oil ministers loved the attention. For a couple of weeks a year they were like rock stars with paparazzi following them all around. Not bad for an evil cabal of market conspirators. Yet now, even though some press is attending the OPEC meeting, the guys are not getting the attention that they are used to. It is kind of like a celebrity on the decline that is quickly becoming yesterday’s news. There is no OPEC drama.
OPEC is living the economic dream. They are one of the biggest beneficiaries of the global economic crisis. OPEC is going to leave their production quotas unchanged and will continue to cheat on production as the opportunities arise. Why change things now when times are so good? Heck why constrain production when you have the global central banks around the globe doing your heavy lifting for you?
OPEC should get on their knees everyday and thank their lucky stars for a guy like Federal Reserve Chairman Ben Bernanke who is turning out to be OPEC’s best friend. Why Ben Bernanke? I will tell you why......Read the entire article.
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Bulletproof Your Retirement Account
If you are looking to retire in the next 10, 15, or even 20 years, it's time to have a strategy in place before it's too late. Now is the time to plan and protect your family's future by turning your portfolio into the financial fortress that you're counting on in the years to come.
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You may remember when we launched the "Perfect Portfolio" some months ago. This portfolio was very popular, but many of you told me that it would not work within your retirement accounts. With this in mind, I specifically designed the "Perfect 'R' Portfolio" to work with your 401(k) or IRA account.
The "Perfect 'R' Portfolio" uses an easy to follow MarketClub strategy that I developed using my many years of investing experience as a former floor trader and member of four major exchanges.
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With complete access to MarketClub and my foolproof strategy, you can see and verify for yourself that everything in the report is 100% accurate. Download this report today and see how you can easily use this information to bulletproof your retirement account ... no matter what
happens to the economy.
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In today's short video, we share with you a way to bulletproof your retirement portfolio.
You may remember when we launched the "Perfect Portfolio" some months ago. This portfolio was very popular, but many of you told me that it would not work within your retirement accounts. With this in mind, I specifically designed the "Perfect 'R' Portfolio" to work with your 401(k) or IRA account.
The "Perfect 'R' Portfolio" uses an easy to follow MarketClub strategy that I developed using my many years of investing experience as a former floor trader and member of four major exchanges.
For most investors, this report will come as a real wake-up call. For your own sake, I hope that you are one of them.
In this report, I share with you all the rules and results which explain how the "Perfect 'R' Portfolio" was created, how it actually works, and how it can work for you. As a bonus, I have included a special certificate that will give you instant access to MarketClub for the next
30 days.
With complete access to MarketClub and my foolproof strategy, you can see and verify for yourself that everything in the report is 100% accurate. Download this report today and see how you can easily use this information to bulletproof your retirement account ... no matter what
happens to the economy.
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