Crude Oil Rises for First Time in Three Days on Optimism U.S. Demand May Gain

Crude oil climbed for the first time in three days after the Japanese economy grew faster than expected, stoking speculation Asia’s fuel demand will increase. Futures retraced some of last week’s 2.3 percent decline after Japan’s gross domestic product rose an annualized 3.9 percent in the third quarter, the Cabinet Office said in Tokyo today. The median forecast of 21 economists surveyed by Bloomberg News was for a 2.5 percent increase.

“It gives further evidence of that Asian recovery,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. “You’ve seen the recovery in China and the positive spill over affects for those economies in the Asian region. Up until now, you haven’t really seen it as much in Japan.”

December crude futures added as much as 50 cents, or 0.6 percent, to $85.38 in electronic trading on the New York Mercantile Exchange, and was at $85.33 at 11:53 a.m. Sydney time. Crude fell $2.93 to $84.88 on Nov. 12, the lowest since Nov. 3. Prices are up 7.6 percent this year.
Chinese oil processing rose to a record last month after refiners increased production to ease a domestic fuel shortage. Plants refined 37 million metric tons, or about 8.8 million barrels a day, in October, up 12 percent from a year earlier, China Mainland Marketing Research Co. said Nov. 11......Read the entire article.


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I Just Watched This.....New Forex Leverage Video

The rules have changed recently in Forex, regarding a number of key issues, but none as important as the leverage change. I've read some decent articles detailing it, but nothing has covered it like the video I just watched from Scott Downing at BigTrends.

Click Here to watch "The Rules of Forex Have Recently Changed"

He explains the new leverage rules and how he's been able to pull consistent pips despite the leverage change. It's also a full KIT of Forex tools for you here too:

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Natural Gas Weekly Technical Outlook For Sunday Nov. 14th

Natural gas edged higher to 4.269 last week but failed to sustain gain and pulled back into prior range. Initial bias remains neutral this week and we'd probably see some sideway trading. But after all, rise from 3.255 is in favor to continue as long as 3.743 support holds. Break of 4.249 will target falling trend line resistance (now at 4.4). However, break of 3.743 support will indicate that rebound is finished and flip bias back to the downside for retesting this low.

In the bigger picture, current development raises the possibility that fall from 6.108 has indeed finished with three waves down to 3.255, and failed 100% projection of 6.108 to 3.81 from 5.194 at 2.896. That is, it's merely a correction to rebound from 2.409. There is no confirmation of reversal yet and key focus will be on mentioned trend line resistance from 6.108, now at around 4.4 level. Sustained break there will likely pave the way the another high above 6.108 in medium term. Though, a break below 3.255 will turn focus back to 2.409 low instead.

In the longer term picture, question remains on whether 2.409 is the long term bottom already. Downside momentum since 6.108 is so far not too convincing and it looks like 2.409 won't be violated even in case of another fall. On the other hand, natural gas is still limited well below 55 weeks EMA and 55 months EMA and there is no confirmation of reversal yet. We'll stay neutral before a break of 5.194 resistance.

Nymex Natural Gas Continuous Contract 4 Hour, Daily, Weekly and Monthly Charts


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Crude Oil Weekly Technical Outlook For Saturday Nov. 13th

Crude oil edged higher to 88.63 last week but formed a short term top there and pulled back. Initial bias remains mildly on the downside this week for deeper decline to correct whole rise from 70.76. Nevertheless, strong support should be seen at 38.2% retracement of 70.76 to 88.63 at 81.80 and bring another rise. Whole rally from 64.23 is still expected to continue to 90 psychological level and above.

In the bigger picture, rise whole medium term rebound from 33.2 is still in progress. Such rise is treated as the second wave of the consolidation pattern that started at 147.27. Further rise could still be be seen towards 50% retracement of 147.27 to 33.2 at 90.24 and possibly further to 61.8% retracement at 103.70. However, break of 70.76 support will be the first warning that crude oil has topped out. Further break of 64.23 support will confirm and turn outlook bearish to start another medium term decline.

In the long term picture, rebound from 33.2 is not finished yet. But overall view remains unchanged. Crude oil is in a long term consolidation pattern from 147.27, with first wave completed at 33.2, second wave from there unfolding. Current development suggests that a breach of 61.8% retracement at 103.70 is likely. But we'll then start to focus on reversal signal again above 103.70.

Nymex Crude Oil Continuous Contract 4 Hour, Daily, Weekly and Monthly Charts




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Dian L. Chu: 131 = The Number of Years to Replace Oil

It seems the panic time for both green enthusiasts and peak oil pundits. According to a new paper by two researchers at the University of California–Davis, it would take 131 years for replacement of gasoline and diesel given the current pace of research and development; however, world's oil could run dry almost a century before that. The research was published on Nov. 8 at Environmental Science & Technology, which is based on the theory that market expectations are good predictors reflected in prices of publicly traded securities.

By incorporating market expectations into the model, the authors, Nataliya Malyshkina and Deb Niemeier, indicated that based on their calculation, the peak of oil production could occur between 2010 and 2030, before renewable replacement technologies become viable at around 2140.
The estimates not only delayed the alternative energy timeline, but also pushed up the peak oil deadline. The researchers suggest some previous estimates that pegged year 2040 as the time frame when alternatives would start to replace oil, could be “overly optimistic".

As I pointed out before, despite the excitement and hype surrounding a future of clean energy, a majority of the current technology simply does not make economic sense for regular consumers and lack the infrastructure for a mass deployment….even with government subsidies, tax breaks, and outright mandates. In addition, the supply chain of renewable technologies is not as green as people might think. Most alternative technologies rely on rare earths for efficiency. However, the......Read the entire article.


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Did George Soros Read This Book to Make a Cool Billion?

Adam Hewison, co-founder of MarketClub just returned from a fact finding mission fro China and returned more excited then ever about his time tested methods on trading these equity and currency markets and how he feels about how legendary investor George Soros made 1 billion dollars in the British pound shortly after his book on foreign exchange was published.

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Musings: Energy Stocks Have Mostly Trailed the Market This Year

The results of the November 2nd election and the recent Federal Reserve Bank’s announcement that it was embarking on another attempt to stimulate the economy by encouraging bank lending through a program to provide more liquidity to the banking system, known as the second quantitative easing, or QE2, have driven the stock market to levels that existed immediately before the collapse of Lehman Brothers. Accompanying the QE2 announcement, the worth of the United States dollar among world currencies fell in value helping to boost the price of commodities including crude oil. Natural gas prices in the U.S. have not benefited from the weakening dollar as the product is truly a local one.

When we look at the performance so far in 2010 for the overall stock market, as measured by the Standard & Poor’s 500 Stock Price Index, it has been solid. The S&P 500 index is up nearly 10% through the end of last week, and is at a level exceeding that achieved in late spring this year. But when we look at the performance of energy stocks, they have tended to lag the performance of the overall stock market despite the strong impetuous from commodity prices.

If we look at what has happened this year in energy markets, there have been two primary events that have shaped the business, the Gulf of Mexico oil spill disaster and the recovery in economy activity following the 2008-2009 recession. While energy demand has recovered from the drastic drop experienced last year due to the recession, the combination of rising supply and continued subpar economic growth and energy demand in the industrialized economies of the world has muted the magnitude of the oil price rise. Crude oil is denominated in U.S. dollars globally, and its price is impacted by the fluctuating value of the U.S. dollar. At various points in time during the year oil prices rose or fell sharply in response to movements in the value of the dollar, however, there was no sustained move in......Read the entire article.



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Stock Market and Commodities Commentary For Friday Evening Nov. 12th

The S&P 500 index closed lower on Friday as it consolidates some of this year's rally. The low range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are turning bearish hinting that a short term top might be in or is near. Closes below the 20 day moving average crossing at 1192.06 are needed to confirm that a short term top has been posted. If December renews the rally off August's low, the 62% retracement level of the 2007-2009 decline crossing at 1234.75 is the next upside target. First resistance is Tuesday's high crossing at 1224.50. Second resistance is the 62% retracement level of the 2007-2009 decline crossing at 1234.75. First support is the 20 day moving average crossing at 1192.09. Second support is the 25% retracement level of the July-November rally crossing at 1169.37.

Crude oil closed sharply lower due to profit taking on Friday as it consolidated 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 overbought and are turning bearish signaling that sideways to lower prices are possible near term. Closes below the 20 day moving average crossing at 83.93 would confirm that a short term top has been posted. If December extends the aforementioned rally, the 87% retracement level of May's decline crossing at 90.82 is the next upside target. First resistance is Thursday's high crossing at 88.63. Second resistance is the 87% retracement level of May's decline crossing at 90.82. First support is today's low crossing at 84.52. Second support is the 20 day moving average crossing at 83.93.

Natural gas closed lower on Friday as it consolidates some of the rally off October's low. Stochastics and the RSI are turning bearish signaling that sideways to lower prices are possible near term. Closes below last Thursday's low crossing at 3.743 would confirm that a short term top has been posted. If December extends the rally off October's low, the 38% retracement level of the June-October decline crossing at 4.362 is the next upside target. First resistance is Wednesday's high crossing at 4.249. Second resistance is the 38% retracement level of the June-October decline crossing at 4.362. First support is last Thursday's low crossing at 3.743. Second support is the reaction low crossing at 3.500.

Gold sharply lower due to profit taking on Friday as it consolidated some of this year's rally. The low range close sets the stage for a steady to lower opening on Monday. Stochastics and the RSI are turning bearish signaling that sideways to lower prices is possible near term. Closes below the 20 day moving average crossing at 1360.70 would confirm that an important top has been posted. If December renews this year's rally into uncharted territory, upside targets will now be hard to project. First resistance is Tuesday's high crossing at 1424.30. First support is the 20 day moving average crossing at 1360.70. Second support is the reaction low crossing at 1315.60.

The U.S. Dollar closed lower on Friday as it consolidates some of this week's rally but remains above the 20 day moving average crossing at 77.48. The mid 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 reaction high crossing at 78.61 are needed to confirm that a short term low has been posted. If December renews the decline off August's high, the November 2009 low on the weekly continuation chart crossing at 74.21 is the next downside target. First resistance is the reaction high crossing at 78.51. Second resistance is the reaction high crossing at 78.61. First support is last Wednesday's low crossing at 75.24. Second support is the November 2009 low on the weekly continuation chart crossing at 74.21.




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Ray Carbone: Crude Oil Close is Crucial

Ray Carbone of Paramount Options says the close in crude will determine whether more selling will come or the rally will resume.



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Bloomberg: Crude Oil Falls From Two Year High on Speculation China May Raise Interest Rates

Crude oil declined from a two year high in New York on speculation China will raise interest rates, damping growth in the world’s biggest energy consumer. Crude fell for the first time in three days and was set for a weekly drop. Equities slid on signs China is preparing to increase the cost of borrowing to curb inflation and the dollar traded near a six week high against the euro as Group of 20 leaders hold an emergency meeting amid concern that Europe’s debt crisis is worsening.

“For the time being $90 is going to be a very strong resistance level; above that, it’s too expensive,” said Andy Sommer, a senior analyst at EGL AG in Dietikon, Switzerland. “There’s a lot of uncertainty about Chinese monetary policy. If they tighten further, that has implications for the oil market.”

Crude for December delivery fell as much as $2.30, or 2.6 percent, to $85.51 a barrel in electronic trading on the New York Mercantile Exchange. It was at $86.08 at 1:15 p.m. London time. Yesterday, the contract rose to $88.63, the highest price since Oct. 9, 2008. Brent crude for December settlement fell as much as $2.16, or 2.4 percent, to $86.65 a barrel on the ICE Futures Europe exchange in London. The contract expires Nov. 15. The more actively traded January futures fell $1.59 to $87.51.

The MSCI Asia Pacific Index retreated 1.4 percent. The Stoxx Europe 600 Index fell as much as 1.8 percent and Standard & Poor’s 500 Index futures slid 1.5 percent. China’s inflation rate rose to the fastest in two years last month, fueling speculation an interest-rate increase is imminent. “People are betting on the Chinese rates and the discussions in the G-20 meeting are responsible for the current heavy selloff,” said Tetsu Emori, a commodity fund manager at Astmax Co. in Tokyo.......Read the entire article.


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World Markets Tumble, OPEC, IEA Raise Oil Demand Forecasts

G20 leaders released a communiqué after the summit in South Korea, pledging to achieve 'strong, sustainable and balanced growth in a collaborative and coordinated way'. However, financial ministers' refusal to join the US in pressuring China to appreciate RMB signals currency and trade disputes will persist for some time. More importantly, G 20 leaders spent a considerable time discussing Europe's debt problems, intensifying worries that the EU may need to bail out some of the peripheral countries.

Financial markets tumbled as Europe's debt crisis worsened and the prospect for Chinese rate hike has increased. The dollar rebounded against major currencies. In the commodity sector, the benchmark contract for WTI crude oil dived to as low as 85.48 in European session. Gold slumped amid broad based selloffs in commodities with the benchmark contract plunged to a 1 week low of 1377.3.

Despite short term volatility, oil agencies remained confident in the oil market. OPEC raised its global oil demand forecasts for 2010 and 2011 as consumptions in advanced countries should improve amid economic recovery. According to the cartel holding 40% to the world's total oil output, World oil demand will reach 85.8M bpd in 2010, up +1.3M bpd from 2009 and +0.2M bpd from October's forecast.

Consumption in the OECD has outpaced expectations as various stimulus plans have driven up economic activities. The forecast for world oil demand in 2011 has been revised up to 86.9M bpd, up +1.1M bpd from 2010 and +0.3M bpd from previous projection. The improved outlook for OECD demand is a key factor behind this adjustment......Read the entire article.


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Crude Oil Technical Outlook For Friday Morning Nov. 12th

Crude oil was sharply lower due to profit taking overnight as it consolidates some of the rally off August's low. Stochastics and the RSI are overbought 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 83.98 are needed to confirm that a short term top has been posted. If December extends the aforementioned rally, the 87% retracement level of May's decline crossing at 90.82 is the next upside target.

First resistance is Thursday's high crossing at 88.63
Second resistance is the 87% retracement level of May's decline crossing at 90.82

Crude oil pivot point for Friday Morning is 87.99

First support is the 10 day moving average crossing at 86.03
Second support is the 20 day moving average crossing at 83.98

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Commodity Corner: Crude Oil Settles Flat after 25 Month High

Crude futures remained flat Thursday, pulling back from a 25 month high as data showed record oil demand in China. Light, sweet crude settled unchanged at $87.81 a barrel on the New York Mercantile Exchange. The futures price peaked at $88.63, the highest intraday price since Oct. 9, 2008, and bottomed out at $87.54. Industrial production in China grew by 13.1 percent in Oct. compared to the same period in 2009, increasing oil usage to 8.92 million barrels per day (bpd). According to the National Statistical Bureau, China's refineries hit record throughput at 8.27 million bpd. The 12.2-percent increase from Oct. 2009 to Oct. 2010 is a key bellwether of crude demand growth.

The Organization of Petroleum Exporting Countries (OPEC) also provided support for oil prices by raising its oil consumption forecast for 2010 and 2011. It increased its expectations from global oil demand to 1.17 million bpd from 120,000 for 2011. Analysts said trading volume was light Thursday due to Veteran's Day, a holiday for many in the U.S. Henry Hub natural gas, meanwhile, fell 12 cents to $3.93 per thousand cubic feet.

The Energy Information Administration (EIA) Thursday reported an increase of 20 million cubic feet of natural gas in U.S. stockpiles for the week ended Nov. 5. Total gas in storage has reached a record of 3.84 trillion cubic feet, 31 barrel cubic feet higher than the previous year. Analysts claim that due to milder weather, the demand for heating is not as high. Natural gas fluctuated between $3.92 and $4.13 Thursday. Meanwhile, gasoline futures for December delivery slipped by less than a penny Thursday to settle at $2.24 a gallon. Gasoline peaked at $2.25 and bottomed out at $2.23.

Courtesy of Rigzone.Com


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Matt Nesto: Where is Crude Oil and Gold Headed on Friday?

CNBC's Matt Nesto discusses the day's activity in the commodities markets, and looks at where oil and gold are likely headed tomorrow.



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Stock Market and Commodities Commentary For Thursday Evening Nov. 11th

The U.S. stock indexes closed lower today and saw more profit taking pressure after hitting fresh for the move highs early this week. The stock index bulls still have the overall near term technical advantage as price uptrends are still in place on the daily bar charts. The stock index bulls do not want to see a technically bearish weekly low close on Friday.

Crude oil closed down $0.07 at $87.74 a barrel today. Prices closed near the session low today after hitting another fresh six month high early on. The bulls still have upside momentum. The next near term upside price objective for the bulls is producing a close above solid technical resistance at $90.00 a barrel.

Natural gas closed down 11.6 cents at $3.93 today. Prices closed near the session low today. The bears have the overall near-term technical advantage and gained some fresh downside momentum today. The next upside price objective for the bulls is closing prices above solid technical resistance at this week's high of $4.249.

Gold futures closed up $6.10 at $1,405.30 today. Prices closed near mid range today. Gold made gains today despite a firmer U.S. dollar index, which is encouraging for the gold market bulls. Gold bulls have the overall near term and longer term technical advantage and have made a good recovery from Tuesday's selling pressure. A 3 1/2 month old uptrend on the daily bar chart is in place.

The U.S. dollar index closed up 56 points at 78.33 today. Prices closed near the session high today and hit a fresh two week high. Dollar index bears still have the overall near term technical advantage, but the bulls this week have gained upside momentum.


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"6 'W's' of Forex"....Price Headly Gave This His Stamp of Approval!

Legendary trader,coach, and mentor Price Headly just put his stamp of approval (which he rarely does) on the new Forex Toolkit from Scott Downing!

This is HUGE!

I've followed Price for a long time, and respect whatever he says...and if he says Scott's kit is something I should have, then I'm getting it ASAP!

Which is what I recommend you do...

Get it Here at Big Trends.Com

Enjoy the Forex Toolkit.........I KNOW I AM!


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Phil Flynn: G-20 And The Price Of A Barrel

Crude oil hit a two year high as US product and oil exports soar, but perhaps the eventual fate of oil and its price level really will be determined by the action or the inaction from the G-20 nations. Imports and exports will be on their mind as China and the US are at a standoff as to whose policies are a bigger threat the global economic recovery.The Chinese really love QE2 because it really takes the focus off of them for being the only currency manipulator.

Of course the Chinese policy of restraining their currency may help them in the short run but it could also be the seeds of their economic problems in the fore. The Chinese may feel that they have to cheat the world to be successful by controlling their currency, but the truth is if they want to maintain their meteoric economic growth over the long run, they would be better served by allowing the market not the government to moderate their economy.

The truth is that the Chinese current manipulation is creating a bubble in their own economy that will burst at some point in the future. And eventually cause major pain for them in the future. Right now of course that may be hard to imagine as everyone on the globe seems to be so bullish on China that they cannot see the major flaw in this story that is staring us right in the face.

The risk of their bubble bursting is increasing everyday yet they refuse to allow their currency to float. You seein a way the Chinese currency manipulation was just as much a factor in the global economic meltdown as was the Fed and the US government’s ill fated Fannie and Freddie excesses......Read the entire article.

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Mid-Week U.S. Dollar, Gold & SP500 Trend Trading

It has been a roller coaster week thus far as stocks and precious metals plunged on heavy selling volume on the back of a rising dollar, only to make a strong rebound Wednesday. While there has been significant intraday price movement, it was no surprise to us as we have been anticipating this pullback since discussing it in my Sunday Gold Newsletter. Let’s take a quick look at the charts....

US Dollar Daily Trading Chart
The past couple weeks the dollar has traded in a choppy fashion, and last week I mentioned to subscribers to keep any new positions small. The dollar looked ready to make a bounce and if it reverses we will see stocks and commodities correct rather sharply.

Last week we trimmed some profits on our gold and SP500 trading positions in anticipation of a rising dollar/lower equity and metals prices. The dollar is currently in a down trend so we are still trading with the trend, but the next couple sessions could potentially change that.

As you can see on the chart a similar pattern to what we saw during the May/June top earlier this year has now formed in reverse this month. It’s a simple pattern I call a drop-n-wash. It is like dropping a knife – you panic, then take action (move foot, then wash the kife). That is typically how the market reacts to this type of price pattern after an extended trend has taking place for a long period of time.

The dollar made an obvious breakdown which the entire world witnessed, causing traders who recently went long to panic and sell their positions. Those who like to short the dollar would have taken a short position, only to see the market reverse and head straight back up again. This pattern has yet to confirm, but through the use of the shorter time frame charts (5 Min, 10 Min, 30 Min), I have a feeling the dollar may continue to rise. However, until the dollar shows considerable strength I am still playing the long equities / long gold side of the equation.

SPY – SP500 ETF Trading Fund
The SP500 made a nice move up last week and we trimmed our position back to lock in more gains as I anticipated this pullback and possible gap fill. As you can see on the chart the moving averages are all heading up and that’s the direction we are still focusing on playing (buying dips).

The morning dip on Wednesday the market sentiment started to shift to become extremely bearish on the short term time frame (10 minute charts). If the market drops down to fill the rest of that gap, I have a feeling the majority of traders will panic out of their position giving us an extreme sentiment buy signal. Also a gap fill will bring the price down to the key moving averages which will act as a support level. I will notify members to add more to my SP500 long position if that happens.

GLD – Gold ETF Trading Fund
Gold has much of the same story as the SP500 but with a couple twists. Gold has huge global demand from banks, investors and traders adding more buying power to this investment than stocks right now. We could see gold hold up above its gap that formed last week. That being said, a pullback to the key moving averages would not only act as a major support level but also fill the gap. We currently have our long positions, but trimmed some profits near the highs and are sitting tight letting the market work it’s self out.

Mid-Week ETF Trading Conclusion:
In short, the focus should be kept on trading with the underlying trends until a trend change has been confirmed. So that means short the dollar, long equities, metals and oil.

That being said, because things are starting to look unstable it is crucial to trade smaller position sizes during times of uncertainty like this. Anticipating major market tops is very difficult and generally costly play, just ask everyone who has been trying to pick a top for the past 2 months… Anticipate trend changes, but don’t trade them until the price/volume action confirms the new trend.

Just Click Here to Get Chris Vermeulen's Daily Pre-Market Trading Videos, Daily Updates & Trade Alerts at The Gold And Oil Guy.com


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Crude Oil Technical Outlook For Thursday Morning Nov. 11th

Crude oil was higher overnight as it extends the rally off August's low. Stochastics and the RSI are overbought but are neutral to bullish signaling that sideways to higher prices are still possible.

If December extends the aforementioned rally, the 87% retracement level of May's decline crossing at 90.82 is the next upside target. Closes below the 20 day moving average crossing at 83.80 are needed to confirm that a short term top has been posted.

First resistance is the overnight high crossing at 88.63
Second resistance is the 87% retracement level of May's decline crossing at 90.82

Crude oil pivot point for Thursday morning is 87.37

First support is the 10 day moving average crossing at 85.62
Second support is the 20 day moving average crossing at 83.80


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Another Nice Profit in This ETF

We have been trading the ETF FXE for some time now in MarketClub’s Perfect “R” Portfolio and today we exited our long position at $136.64, which produced a profit of $8.14 a share. This market has performed very well for us and we have only had two major trend changes for the year so far. The FXE is an ETF that mimics the Euro versus the US Dollar, so there’s always plenty movement which equals opportunity in the market. That is one of the principal reasons why we chose to include this ETF in the Perfect “R” Portfolio. Right now our score is a -60, meaning one should be on the sidelines until a more defined trend takes place. This is one of the beauties of this portfolio; you are not in the market all the time.

Just follow this link to find out more about the MarketClub’s Perfect “R” Portfolio and all other portfolios.


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