Phil Streible: Gold Prices Trade Sideways

Phil Streible, senior market strategist at Lind-Waldock, is expecting flat gold prices for the short holiday trading week.



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Stephen Schork: Data Bullish for Economy, But Concerning for Nymex Futures

The last time we discussed the domestic producer price index (PPI) and consumer price index (CPI) we stated that “Consumers aren’t feeling the pain… yet.” The CPI for September was flat, whereas analysts were looking for a 0.1% increase and we were specifically concerned that the CPI of food rose just 0.32%, stating “we do not expect this to last.”

In this vein, the latest data (October) saw the CPI for food rise by 0.70%, more than double the previous month’s rate. Before we drill down further, it is worth pulling back to get the big picture. The total PPI rose by 0.4%, below analyst expectations of a 0.8% increase. At the same time, total CPI rose by 0.2%, slightly below the 0.3% gain expected by analysts. We do not believe it a coincidence that these figures were released on exactly the same day that the dollar peaked at the €0.7413 mark.

Despite the indices coming in below expectations, were traders still concerned about inflation? As written in today’s issue of The Schork Report, we don’t believe so. Rather, the drop in the dollar is likely due to money switching towards the equities markets, consider that the dollar hit a local peak on November 16th and has fallen 1.36% since. In comparison, the S&P 500 Index hit a local bottom on November 16th and has risen 1.67% over the same time......Read the entire article.


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Phil Flynn: Babys It's Cold Outside

It may not be cold yet but the first real blast of winter is coming. How do I know that? I am looking at natural gas prices. Despite record supplies, natural gas has been keeping up as Middle America scrambles through our closets to find gloves and ear muffs. Natural gas prices are rebounding from its sharp selloff now testing the high for the month in anticipations of frosty future. Does this signal that the bottom in natural gas has arrived or is this just a great selling opportunity?

In a normal year in gas you might assume that prices would go higher but since the onslaught of new unconventional gas production from shale, now you cannot be too sure. You see according to the Energy Information Agency natural gas proven reserves (those volumes of oil and natural gas that geological and engineering data demonstrate with reasonable certainty to be recoverable in future years from known reservoirs under existing economic and operating conditions) rose enough not only to replace production, but also to grow by almost 3 percent over 2007.

In contrast, the EIA says that even though discoveries of crude oil rose for the third year in a row, proved reserves of crude oil fell by more than 10 percent. Under Securities and Exchange Commission (SEC) rules for determining reserves that have been in effect since 1982, operators assessed their 2008 reserves based on what they could produce with reasonable certainty at the market price on the last day of the year......Read the entire article.



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Oil Prices Higher on Ireland Debt Plan, Overnight Short Covering

Oil prices are higher this morning after European and global financial authorities agreed to save debt latent Ireland and protect Europe's wider financial stability. This short covering overnight consolidated some of this month's decline.

Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term. If January extends the aforementioned decline, the 62% retracement level of the August-November rally crossing at 79.24 is the next downside target. Closes above the 20 day moving average crossing at 84.60 would confirm that a short term low has been posted.

First resistance is the 20 day moving average crossing at 84.60
Second resistance is this month's high crossing at 89.10

Crude oil pivot point for Monday morning is 82.13

First support is last Wednesday's low crossing at 80.65
Second support is the 62% retracement level of the August-November rally crossing at 78.56


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Crude Oil Rises as Irish Bailout Plan May Ease Concern Over European Debt

Crude oil rose, rebounding from its biggest weekly loss in three months, amid optimism that an agreement to rescue Ireland’s banks may reduce European sovereign debt concerns. Futures retraced some of last week’s 4 percent slump after Ireland yesterday applied for a bailout from the European Union and the International Monetary Fund to save its banks. The decision pushed the euro to a one week high versus the dollar, boosting the appeal of commodities to investors.

“The euro debt concerns are easing as Ireland has decided to accept the bailout and that will lead to a weaker dollar,” said Serene Lim, a commodity strategist at Australia & New Zealand Banking Group Ltd. in Singapore. “It’s more of the dollar weakening that’s helping to drive oil higher.” The January contract gained as much as 64 cents, or 0.8 percent, to $82.62 a barrel in electronic trading on the New York Mercantile Exchange, and was at $82.50 at 12:25 p.m. Singapore time. It slipped 44 cents, or 0.5 percent, to $81.98 on Nov. 19. Futures are up 3.7 percent this year.

The December contract expired on Nov. 19, down 34 cents, or 0.4 percent, at $81.51 a barrel. Crude fell at the end of last week after China ordered banks to raise reserves in a move that may slow growth and crimp fuel demand in the world’s largest energy consuming country. “The Irish debt situation has been contained for the moment,” said David Taylor, a market analyst at CMC Markets Ltd. in Sydney......Read the entire article.


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Has The Gold & Silver Play Gone To Greed?

The past few months it seems the gold and silver play has been getting a little crowed with everyone wanting to own gold. While I am a firm believer that these precious metals are a great hedge/investment long term, I can’t help but notice the price action and volume for both metals which looks to me like they are getting exhausted.

Silver – Daily Chart
The silver chart below shows an extremely high volume reversal candle in early November which typically leads to lower prices and some times a major change in the trend. That being said silver remains in an uptrend with the possibility of a bullish pennant forming. On the other hand there is a possible head and shoulders pattern forming. I will be looking for light volume sideways chop keeping a close eye for a possible neckline breakdown or a momentum thrust to the upside for a possible trade.

Gold – Daily Chart
Gold is forming a bullish and bearish pattern also giving us a mixed signal. I am currently neutral on gold and not really looking to take part until we get some type of clear price action.

US Dollar – 60 Minute Chart
The dollar has shown some strength recently. The US dollar play has been to take the short side, and a couple weeks ago we saw the dollar breakdown from yet another consolidation. It seems like everyone shorted the dollar yet again. That could have been a key pivot low for the dollar. On the weekly chart that bounce was off a major support trend line helping add some fuel to the rally I would think.

The chart below shows the recent rally and breakout to the upside. Currently the dollar is pulling back to test the breakout level (support). It will be interesting to see how this week unfolds. If the dollar bounces then we just may see metals break below their necklines to make another heavy volume drop.

Weekly Precious Metals Update:
In short, I have mixed feelings for gold and silver. Yes I think they are good long term plays, but after the run they have had it is also very possible a much deeper correction is about to take place and we may not see new highs for another year. That is a long time to have money sitting in an investment when it can be put to work in other investments. I know the herd (general public) is all head over heals in love with gold and silver which is one of the reasons why I think we are nearing a top if we didn’t already see it a couple weeks ago.

Don’t get me wrong I’m not saying to sell and go short metals....not yet anyways. They are both still in an up trend but some interesting things are unfolding which could cause big action in the coming weeks.

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Sunday, A Great Day to Learn How To Use Fibonacci Retracements

Sunday, a quiet day away from the markets. What better way to spend Sunday then to learn how to use Fibonacci retracements in our trading. We have had a number of requests to do a video on Fibonacci retracements and how they can be used in trading.

We put together this five minute lesson on Fibonacci trading and how we use this important tool to determine turning points in the market. Like all tools, it has its flaws and should be used with other complementary tools like our "Trade Triangle" technology.

As always, our videos are free to watch and there are no registration requirements. We hope you have the time to comment and share if this video helped you understand this important trading tool, or how you're already using it.

We hope you enjoy this brief lesson and it helps you understand how to use this important tool.


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Natural Gas Weekly Technical Outlook For Sunday Nov. 21st

Natural gas's strong rebound form 3.71 retained the bullish case. That is, it should have bottomed at 3.255 already. Break of 4.249 resistance will indicate that such rebound has resumed and should target falling trend line resistance (now at 4.4 level). On downside, however, break of 3.71 will now confirm that rebound from 3.255 has completed and will turn bias back to the downside for retesting 3.255 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. 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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Nigeria Arrests Militants for Seizing Oil Workers

Nigeria's military spokesman says soldiers have arrested a militant leader who authorities believe is responsible for a recent rash of kidnappings of oil workers in the oil rich southern delta.

Lt. Col. Timothy Antigha said Saturday the leader was taken with 62 suspected members of the Movement for the Emancipation of the Niger Delta. Antigha says the leader is known by his nickname, "Obese."

Antigha says the military believes the group kidnapped two Americans, two Frenchmen, two Indonesians, one Canadian and 12 Nigerians in recent weeks from Exxon Mobil Corp. and Afren PLC facilities.

On Wednesday night, a military operation freed 19 hostages in the oil rich region held by MEND _ including seven expatriate workers.

Posted courtesy of INO.Com/AP



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Oil N' Gold: Crude Oil Weekly Technical Outlook For Saturday Nov. 20th

Crude oil dropped to as low as 80.06 last week before forming a temporary low there and turned sideway. Initial bias remains neutral this week and some consolidations would be seen first. However, note that another fall remains in favor as long as 84.52 minor resistance holds. Below 80.06 will target 61.8% retracement of 70.76 to 88.63 at 77.59 and below. Though, above 84.52 will flip intraday bias back to the upside for retesting 88.63 high.

In the bigger picture, the steeper than expected fall from 88.63 is mixing up the outlook and argue that rise from 64.23 is possibly finished with three waves up to 88.63. In other words, it could be the second wave of consolidation from 87.17 and the third wave might have just started. We'll now slightly favor more decline as long as 88.63 resistance holds. Nevertheless, medium term rise from 33.2 is treated as the second wave of the consolidation pattern that started at 147.27. As long as 64.23 support holds, medium term rise from 33.2 is still in favor to extend to 50% retracement of 147.27 to 33.2 at 90.24 and possibly higher before completion.

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, Monthly and Charts


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Bloomberg: Crude Oil Has Biggest Weekly Decline in Three Months on China Bank Reserves Move

Crude Oil fell, posting its biggest weekly loss in three months, after China ordered banks to raise reserves in a move that may slow growth in the world’s largest energy consuming country. Futures dropped 0.4 percent after China told lenders for the fifth time this year to set aside more funds to drain cash from the financial system and limit asset bubbles. Economic growth will spur a 9.5 percent jump in 2010 Chinese oil use, according to a Nov. 12 International Energy Agency report.

“These further moves by the Chinese to rein in their economy and the real concern they’re expressing about inflation is weighing on this crude market,” said John Kilduff, a partner at Again Capital LLC, a New York based hedge fund focusing on energy. Crude for December delivery fell 34 cents to settle at $81.51 a barrel on the New York Mercantile Exchange. Prices have dropped 4 percent since Nov. 12, the most since the week ended Aug. 13. The December contract expired today. The more active January contract slipped 44 cents, or 0.5 percent, to $81.98.

The People’s Bank of China said it will raise the reserve ratio requirement for the nation’s banks by 50 basis points starting Nov. 29. Speculation of an imminent increase in interest rates to counter inflation helped to drive the biggest selloff in China’s benchmark stock index since May over the past two weeks......Read the entire Bloomberg article.


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S&P 500, Treasuries, Gold, & Dollar are At Key Price Levels

Thursday was another example of Mr. Market playing games with traders and investors as equities and precious metals took part in a strong rally. Some market prognosticators noted short term oversold conditions across the board while others discussed the potential for a strong reversal that could potentially take out recent highs. In addition to the regular banter, to the average retail investor the market sure looks rigged when the government decides to sell a large stake in a massive IPO offering and a shaky tape suddenly becomes stronger than garlic.

There is a lot going on in the news as of late, and the expiration of the Bush tax cuts looms large on the minds of many, particularly small business owners. So the real question becomes, what should traders be watching or paying attention to before the light volume Thanksgiving week? The answer is simple, watch the tape! The market will provide plenty of clues and it will eventually tip its hand, experienced traders will wait for this process to unfold.

At this point in time, it is a bit early to begin making predictions as to which direction the equities market will go. What we do know is that the market was oversold in the short-term, so this could be a pause before prices turn lower. In contrast, this could be the beginning of another bullish move breaking recent highs on its way to a “Santa Claus” rally. My stance is neutral at this point in time; S&P 1200 should offer significant overhead resistance while S&P 1170 / 50 period moving average is near term support.

Here is the charts that illustrates these key levels > "S&P 500, Treasuries, Gold, & Dollar are At Key Price Levels"


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Commodity Corner: Crude Oil Down, Natural Gas Up for the Week

Crude oil settled at $81.51 a barrel Friday, a 34 cent decline from the previous day, as traders responded to action taken by the Chinese government to address rising inflation.

China's government, which many thought would raise interest rates to quell inflation, decided to take a somewhat milder approach Friday: increasing the required reserve replacement ratio for banks. Although less dramatic than the former approach, the move is expected to have a dampening effect on demand for oil and other commodities.

Also on the minds of traders was pending action by the Irish government, which faces a serious debt crisis brought on by a real estate bust. Ireland's prime minister on Friday confirmed the government was holding talks with the EU and the International Monetary Fund to craft a bank bailout plan to help stabilize the country's banks. The increasing likelihood of an Irish bank bailout has helped the euro to regain strength against the dollar recently. However, a weaker dollar was not enough to carry oil into positive territory for Friday.

December crude traded within a range from $80.59 to $82.75 Friday. Beginning with Monday's settlement price of $84.86, oil is down 3.9 percent for the week.

For natural gas, the story has been quite different. December gas futures surged 8.2 percent during the week, thanks to colder weather conditions taking hold in much of the country and forecast to continue through the Thanksgiving holiday.

Natural gas gained 15 cents Friday to settle at $4.16 per thousand cubic feet. It peaked at $4.17 and bottomed out at $3.975.

Gasoline for December delivery fell three cents to settle at $2.20 a gallon Friday. The futures price fluctuated from $2.16 to $2.25. Gasoline is virtually flat for the week, having risen only 0.2 percent since Monday.

Posted courtesy of Rigzone.Com

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Anthony Grisanti: Crude Won't Hit $100 by Year End

Crude trader Anthony Grisanti of GRZ Energy says demand and dollar are keeping crude down.



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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 Nov. 19th

The S&P 500 index closed higher on Friday as it extends Thursday's rally. The high range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are turning neutral to bullish signaling that a short term low might be in or is near. Closes above the 10 day moving average crossing at 1199.63 would temper the near term bearish outlook. If December extends the decline off last week's high, the 25% retracement level of the July-November rally crossing at 1169.37 is the next downside target. First resistance is the 10 day moving average crossing at 1199.63. Second resistance is this month's high crossing at 1224.50. First support is Tuesday's low crossing at 1175.20. Second support is the 25% retracement level of the July-November rally crossing at 1169.37.

Crude oil closed lower on Friday but remains above the 50% retracement level of the August-November rally crossing at 80.49. The mid-range close sets the stage for a steady opening on Monday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term. If December extends the decline off last week's high, the 62% retracement level of the August-November rally crossing at 78.56 is the next downside target. Closes above the 10 day moving average crossing at 84.51 are needed to confirm that a short term low has been posted. First resistance is the 20 day moving average crossing at 84.03. Second resistance is the 10 day moving average crossing at 84.51. First support is Wednesday's low crossing at 80.06. Second support is the 62% retracement level of the August-November rally crossing at 78.56.

Natural gas closed higher on Friday as it extends this week's rally. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. If December renews the rally off October's low, the 38% retracement level of the June-October decline crossing at 4.362 is the next upside target. Closes below the reaction low crossing at 3.743 are needed to confirm that a short term top has been posted. First resistance is last 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 Monday's low crossing at 3.710. Second support is the reaction low crossing at 3.500.

Gold closed lower on Friday and the mid-range close sets the stage for a steady opening on Monday. Stochastics and the RSI remain bearish signaling that sideways to lower prices is possible near term. If December extends the decline off last week's high, the reaction low crossing at 1315.60 is the next downside target. Closes above the 10 day moving average crossing at 1372.90 would temper the near term bearish outlook. First resistance is the 20 day moving average crossing at 1362.70. Second resistance is the 10 day moving average crossing at 1372.90. First support is Tuesday's low crossing at 1329.00. Second support is the reaction low crossing at 1315.60.

The U.S. Dollar closed lower due to profit taking on Friday as it consolidates some of this month's rally. The mid-range close sets the stage for a steady to lower opening on Monday. 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 77.79 are needed to confirm that a short term top has been posted. If December extends this month's rally, the 38% retracement level of this year's decline crossing at 80.54 is the next upside target. First resistance is Tuesday's high crossing at 79.59. Second resistance is the 38% retracement level of this year's decline crossing at 80.54. First support is the 20 day moving average crossing at 77.79. Second support is this month's low crossing at 75.24.


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Energy Sector Buzz: China North East Petroleum Down In Late Trading

China North East Petroleum reported third quarter results that fell well short of the one analyst estimate on Thomson Reuters. Total oil production plunged 40% on severe flooding. The oilfield services company also said it's working on improving its control environment and has engaged an outside firm to help with it's restatement process. Shares slipped 4.9% to $6.60 in after hours trading.

Exploration and production company Gastar Exploration Ltd. (GST, $4.64, +$0.35, +8.16%) said it has acquired about 59,000 net acres of leasehold in the Marcellus Shale, a natural gas rich rock formation. Terms of the acquisition, which is expected to close in mid-December, weren't disclosed.

Goldman Sachs started coverage on oil service provider RPC Inc. (RES, $26.97, -$1.53, -5.37%) with a sell rating, saying the market for U.S. pressure pumping remains very tight, stocks are near all time highs and Street estimates imply that the cycle goes through 2012.

Northern Oil and Gas Inc. (NOG, $22.07, +$1.29, +6.21%) boosted the size of its planned stock sale as the offering priced at a mere 2.6% discount to Thursday's close.



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Phil Flynn: Ben Versus The Dragon

The Chinese moved to increase interest rates and Big Ben Bernanke struck back defending quantitative easing and bashing the Chinese. Ben forced the issue with QE2 and now the Chinese are forced to raise rates! Now the question is will the Chinese rate hikes keep coming or will it be too little too late to cool their hot inflation? Right now I would say it’s bordering on too little too late. Ben Bernanke lashed out at China saying they are causing global problems by preventing their currency from strengthening while their economy booms.

It’s just like what I said in my article in the upcoming issue of SFO Magazine when I wrote, “The Fed felt it had no choice (but to print more money,QE2) as the U.S. government moved slow to attack a rising budget deficit and at the same time face an imbalance as the Chinese continue to manipulate their currency." Chinese currency manipulation may help them in the short run yet it could sow the seeds of economic problems in the future.

The Chinese may feel that they have to cheat the world to be successful by controlling their currency but the truth is that 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. Chinese currency manipulation is creating a bubble that will burst if they make a misstep, causing major pain the future. Right now that may be hard to imagine as everyone on the globe is so bullish on China yet the recent correction and history is a reminder that things can......Read the entire article.


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Brad Zigler: Is Crude Oil Taking Lessons From Gold?

Commodity prices sold off hard this week as concerns over credit tightening in the Chinese market prompted traders and investors to rethink their inflation notions. Unexpectedly, in October, year over year inflation on the Chinese mainland rose to 4.4 percent, prompting authorities to jawbone a jack up of interest rates and price controls.

Gold prices tumbled from the $1,400/oz level reached after a nearly unabated three month rise. Industrial commodities also took it on the chin, as fears of slowing growth in China percolated.
But the most industrial of commodities is, of course, oil. Oil had rallied in autumn along with gold, albeit with greater volatility, and with punier returns as well. Gold chugged uphill from July's end to a 14.8 percent gain ahead of the November election. Simultaneously, oil pitched and rolled 3.2 percent higher.

The wheels on the commodity undercarriage started wobbling after the votes were tallied and, more importantly, once the Fed laid out the parameters of its second tranche of quantitative easing. Then oil and gold both tumbled. Gold led the way down, just as it had led the way up. Since the top of November, bullion's slumped 1.7 percent, while front month WTI crude prices have slid 1.3 percent.

Recently, oil prices have gyrated nearly twice as much as gold. This autumn, the annualized standard deviation in oil's daily close has been 27.8 percent, while gold's wobbled at a 14.7 percent rate.

But most arresting is the expectations of future volatility reflected in option prices. As gold topped the $1,400 mark, the CBOE Gold Volatility Index (CBOE: GVZ) jumped to 24.65. This index represents the near term variance in the price of the SPDR Gold Shares Trust (NYSE Arca: GLD) here, an annualized 24.65 percent as imputed to option premiums. A week before, when gold was $50 lower, the volatility index registered 21.87......Read the entire article.



The "Super Cycle" in Gold and How It Will Effect Your Pocketbook in 2010

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Where is ExxonMobil Headed From Here?

With the recent beating crude oil bulls have taken is it time to bail on industry leader ExxonMobil (XOM)? A quick look at our "Smart Scan Chart Analysis" technology confirms that a short term counter trend move is underway.

When this action is over look for the longer term positive trend to resume. Be sure to trade this uptrend with tight money management stops.

Based on a pre-defined weighted trend formula for chart analysis, XOM scored +85 on a scale from -100 (strong downtrend) to +100 (strong uptrend):

+10......Last Hour Close Above 5 Hour Moving Avg
-15......New 3 Day Low on Tuesday
+20......Last Price Above 20 Day Moving Average
+25......New 3 Week High, Week Ending Nov. 13th
+30......New 3 Month High in November
+85......Total Score

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