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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Tuesday, November 23, 2010
Another War and Then Another War and Then… What is This Groundhog Day?
What you probably did not know was the $20 move up in gold today was signaled the day before by our “Trade Triangles.” How was this possible? It has everything to do with some very cool technology developed by MarketClub.
Yesterday, MarketClub through its “Trade Triangle” technology flashed a buy signal in gold. This was 24 hours before today’s big up move! How could it be possible that a technology could know what was going to happen before it happens?
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North Korean Military Action Pressures U.S. Markets, Sends Gold and Dollar Sharply Higher
Crude Oil - The New World Currency
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A Stunning Silver Forecast Comes True, What Next?
From guest analyst David A. Banister at The Market Trend Forecast.com.....
In latter August I penned a forecast for my subscribers to TMTF on Silver, and below is a brief excerpt from August 31st:
I believe Silver is about to stage a pretty large advance based loosely on the Elliott Wave pattern I see unfolding after a 9 odd month consolidation. (Obviously, there are also fundamental fiat currency/debt events worldwide that give it the underlying bull chart pattern). Since the average person can’t run out and buy an ounce of Gold for $1,240 tomorrow, as the unfolding of the fiat crises continues to enter the public psyche, you will see a strong populace movement into buying silver, silver coins, etc. To wit, many silver stocks are moving up strongly of late, signally an imminent breakout of this precious and industrial metal.
The triangle pattern has taken nearly 9 months so far, and a move over $19.50 could start a multi-month run targeting $26-$29 per ounce for starters before a broad pullback.
I bring this up now, some 11 weeks later because Silver did in fact rally up from around $19 per ounce to $29 per ounce, and this was forecast well in advance using my crowd behavioral methodology and pattern recognition. The explosion in price I predicted happened much faster than even I expected, but does show the power of the crowds as they take hold of a new trend or a perceived trend and run with it. Part of the theory to be long silver also had to do with it being “poor man’s Gold”, which I indicated in my forecast. This is also crowd psychology in it’s finest form. People perceive Gold to be “too expensive”, but they can buy silver for only $29 an ounce. To wit, most investors do not really understand the difference between a stock that has 2 billion shares outstanding and one that has 20 million shares outstanding, they only care about price. They often think if a stock is $2 it’s “cheaper” than the stock at $100, little do they realize that a $2 stock that goes to $1 is a 50% loss, but they perceive that as a small risk due to the price. With Silver, you have the mom and pops running out and buying it because it’s “cheaper” than Gold.
Now that Silver has run to $29, my target, and then dropped back, what should expect next? Well, we are in that “broad pullback” I mentioned back in late August that would occur once $29 was hit. Technically speaking and looking at typical crowd behavior, I am expecting consolidation to continue for awhile under $29 per ounce. I call this recent pattern an A B C rally, and once the C wave ends at $29 in this case, forecasting the next move is extremely difficult and can be exasperating. The C wave ran from $19 to $29, and at the tops of those moves everyone is bullish and breathless. Figuring out how the crowd behaves after those patterns is similar to pulling a rabbit out of a hat. With that said, I would expect a 38-50% retracement of the $10 move to about $24 an ounce worst case, and then we should re-attack the $29 highs and likely move into the $32-$34 per ounce range within the next 60 days or so. Silver will continue to out-perform Gold for the foreseeable future as well if I’m right. It appears by my chart below that we already had our initial corrective low, and now we will consolidate and break out.
Consider subscribing to our free reports today by going to Market Trend Forecast.Com, and there you can take advantage of a one time coupon as well. I cover the SP 500, Gold, and Silver on a regular basis.
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In latter August I penned a forecast for my subscribers to TMTF on Silver, and below is a brief excerpt from August 31st:
I believe Silver is about to stage a pretty large advance based loosely on the Elliott Wave pattern I see unfolding after a 9 odd month consolidation. (Obviously, there are also fundamental fiat currency/debt events worldwide that give it the underlying bull chart pattern). Since the average person can’t run out and buy an ounce of Gold for $1,240 tomorrow, as the unfolding of the fiat crises continues to enter the public psyche, you will see a strong populace movement into buying silver, silver coins, etc. To wit, many silver stocks are moving up strongly of late, signally an imminent breakout of this precious and industrial metal.
The triangle pattern has taken nearly 9 months so far, and a move over $19.50 could start a multi-month run targeting $26-$29 per ounce for starters before a broad pullback.
I bring this up now, some 11 weeks later because Silver did in fact rally up from around $19 per ounce to $29 per ounce, and this was forecast well in advance using my crowd behavioral methodology and pattern recognition. The explosion in price I predicted happened much faster than even I expected, but does show the power of the crowds as they take hold of a new trend or a perceived trend and run with it. Part of the theory to be long silver also had to do with it being “poor man’s Gold”, which I indicated in my forecast. This is also crowd psychology in it’s finest form. People perceive Gold to be “too expensive”, but they can buy silver for only $29 an ounce. To wit, most investors do not really understand the difference between a stock that has 2 billion shares outstanding and one that has 20 million shares outstanding, they only care about price. They often think if a stock is $2 it’s “cheaper” than the stock at $100, little do they realize that a $2 stock that goes to $1 is a 50% loss, but they perceive that as a small risk due to the price. With Silver, you have the mom and pops running out and buying it because it’s “cheaper” than Gold.
Now that Silver has run to $29, my target, and then dropped back, what should expect next? Well, we are in that “broad pullback” I mentioned back in late August that would occur once $29 was hit. Technically speaking and looking at typical crowd behavior, I am expecting consolidation to continue for awhile under $29 per ounce. I call this recent pattern an A B C rally, and once the C wave ends at $29 in this case, forecasting the next move is extremely difficult and can be exasperating. The C wave ran from $19 to $29, and at the tops of those moves everyone is bullish and breathless. Figuring out how the crowd behaves after those patterns is similar to pulling a rabbit out of a hat. With that said, I would expect a 38-50% retracement of the $10 move to about $24 an ounce worst case, and then we should re-attack the $29 highs and likely move into the $32-$34 per ounce range within the next 60 days or so. Silver will continue to out-perform Gold for the foreseeable future as well if I’m right. It appears by my chart below that we already had our initial corrective low, and now we will consolidate and break out.
Consider subscribing to our free reports today by going to Market Trend Forecast.Com, and there you can take advantage of a one time coupon as well. I cover the SP 500, Gold, and Silver on a regular basis.
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Spotting a Trend Reversal in Gold Prices
Jeb Handwerger, editor of GoldStockTrades.com, reveals how he is planning to spot a trend reversal in gold prices.
Gold, Oil & Index ETF Trading Analysis
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Gold, Oil & Index ETF Trading Analysis
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Crude Oil on the Defensive
Between technical factors and a new outbreak of nerves in the Korean peninsula, oil prices are continuing their recent decline this morning. Good chance to shake out the speculators. West Texas Intermediate crude is down another 1% in early trading, cracking back below the $81 level. Traders say the market is reacting to a combination of factors, including the fresh hostilities that emerged overnight between Pyongyang and Seoul, along with rumors that North Korean dictator Kim Jong-Il is dead or dying.
While less dramatic, the dollar is playing a role here too. The dollar index (DXY) has blown through resistance and is now trading back above 79 this morning, largely due to the euro's bailout concerns and a bit of a flight to safe havens bid in global markets. As the dollar appreciates, commodity prices, from oil on down, naturally feel the pressure. And oil in particular is not in bullish technical shape. The price action has already broken below the 50 and 200 day moving averages and is now in the process of testing the 100 day trend as well.
Plenty of guys have been hiding out in the oil market and this is a chance to shake them out. Speculative long positions came down a bit last week, according to the CFTC, but remain very elevated. Meanwhile, look to see USO and the rest of the oil patch decline.
Posted courtesy of Emerging Markets.Com
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Phil Flynn: Crude Oil Is Shell Shocked
“North and South Korea exchanged artillery fire on Tuesday after dozens of shells fired from the North struck a South Korean Island near the countries’ disputed maritime border. Two South Korean soldiers were killed, 15 were wounded and three civilians were injured", said Kiyheon Kwon, an official at the Defense Ministry. Reuters News reported, “South Korea has warned North Korea it would “sternly retaliate” to any further provocations. There may be a lot of reasons for North Korea’s action. Perhaps it is because their secret nuclear weapons facility was exposed. That led to reports that South Korea’s defense minister saying that South Korea might again might hoist......Read the entire article.
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Financial Markets Tumble on Geopolitical Tensions and Fears over China's Demand
News said that China's biggest banks are close to reach their lending quotas and will stop making new loans to avoid exceeding the limits. Commodities especially oil and base metal prices were pressured as curbs in lending would slow investments and hence demand growth. Gold price remained resilient although early gains were partly pared amid broad based decline in commodity prices.
Tensions between the two Koreas have intensified since March when the sinking of a South Korean warship killed 6 sailors. North Korea denied any responsibility. Yonhap News reported North Korea the morning fired tens of artillery shells near the western border with South Korea, in prompting the South's military to fire back.
The attack has caused at least 1 South Korean soldier was killed and 13 injured. Market sentiment has been badly hurt with equities and growth currencies slumping. The MSCI Asia Pacific Index excluding Japan tumbled more than -2%. While South Korea's KOSPI index slipped -0.79%, Hong Kong's HSI plunged -2.67%, Singapore's Strait Times Index fell -2.03% while China's Shanghai Composite Index slid -1.94%. Korean Won fell -2.60% against the dollar while other currencies also fell.
Rumors said Chinese banks such as Industrial & Commercial Bank of China, Bank of China and Agricultural Bank of China have almost reached their annual lending quotas and will only lend as existing loans are repaid. New loans have reached RMB6.9 trillion as of November, approaching the government's cap of RMB7.5 trillion for the full year. Also weighed on commodity prices was the Customs' final trade data for October. Several commodities showed decline in imports, raising fears that China's demand has moderated. For instance, imports for both copper concentrate and refined copper tumbled -30% m/m in October. Imports for nickel, zinc and lead also contracted during the month.......Read the entire article and charts.
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Crude Oil Technical Outlook For Tuesday Morning Nov. 23rd
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 84.47 would confirm that a short term low has been posted.
First resistance is the 20 day moving average crossing at 84.47
Second resistance is this month's high crossing at 89.10
Crude oil pivot point for Tuesday morning is 81.76
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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Venezuelan Black Sea Oil Route Threatens European Supplies
Belarus reversed the direction of one line in the Druzhba link’s southern branch on Nov. 21 to carry crude east to the Mozyr refinery, Dyomin said. The branch’s parallel line continues to carry Russian oil west to the Czech Republic, Croatia, Slovakia, Hungary and Germany, he said.
Russia and Belarus, which are developing a customs union with Kazakhstan, have clashed over oil export taxes as Russia moved to roll back a discount that allowed Belarus to benefit from cheap oil supplies. Russian Prime Minister Vladimir Putin said the duty may be canceled once a free-trade area is created.
Belarus plans to take delivery of as much as 9 million metric tons of crude from Venezuela next year, a Belarusian presidential administration official said in September. Belarus’s use of the line means Transneft won’t be able to increase deliveries via Druzhba’s southern branch to meet additional winter demand and won’t have an alternative route in case of an accident, Dyomin said.
Transneft supplies to Europe have continued uninterrupted through the second line of Druzhba, which is operating at slightly more than its capacity of 17.5 million tons a year, Dyomin said. The crude Belarus received was Russian oil that Venezuela obtained via a swap at the Black Sea port of Novorossiysk, Dyomin said. The 80,000 ton cargo was carried from the Black Sea to Belarus via Ukraine’s Odessa-Brody pipeline, Dyomin said. The next delivery, of 78,200 tons of oil, is scheduled to arrive at the Odessa port on Nov. 25, Kommersant-Ukraine said yesterday.
“Why Belarus can’t take that same oil via Druzhba is beyond my understanding,” Dyomin said.
Posted courtesy of Bloomberg News. Reporter Stephen Bierman can be contacted in Moscow at sbierman1@bloomberg.net.
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Monday, November 22, 2010
Commodity Corner: Crude Oil Settles Lower on Weaker Euro
The National Weather Service expects the Midwest and Northeast to experience colder than normal temperatures through next week. Given the regions' anticipated greater electricity demand during this period, December natural gas settled 11 cents higher at $4.27 per thousand cubic feet. It traded from $4.125 to $4.28.
Although the American Automobile Association expects more motorists to be on the road for this year's Thanksgiving holiday, December gasoline ended the day a nickel lower at $2.15 per gallon. The front month gasoline price fluctuated Monday from $2.13 to $2.215.
Posted courtesy of Rigzone.Com
The "Super Cycle" in Gold and How It Will Effect Your Pocketbook in 2010
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Sharon Epperson: Where is Crude Oil and Gold Headed on Tuesday?
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 Monday Evening Nov. 22nd
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There’s No Quick Fix for the Global Economy
From guest blogger Adam Hewison......
Regardless of what others might say, there is no quick fix for the global economy. To illustrate this point, a friend of mine recently sent me a chart which I would like to share with you.
This charts shows that we may be going into a prolonged period of no growth in the overall stock market. The NASDAQ peaked at 5,132.52 on March 10th, 2000. The NASDAQ market is in many ways more important than the DOW, and should be considered more of a leading indicator. If that is truly the case, then we have been in a bear market for the last eight years.
Trading throughout the balance of this decade and into the early part of the next decade is going to be the key to survival and for recovering the profits in your portfolio. We strongly recommend that you approach these markets with some level of expertise and knowledge of technical trading.
The future is going to be the future and we need to take advantage of every moment and prepare ourselves to be the very best we can be in whatever business or endeavor we are pursuing.
Check out a FREE trial of Adam Hewison's trading system.
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Regardless of what others might say, there is no quick fix for the global economy. To illustrate this point, a friend of mine recently sent me a chart which I would like to share with you.
This charts shows that we may be going into a prolonged period of no growth in the overall stock market. The NASDAQ peaked at 5,132.52 on March 10th, 2000. The NASDAQ market is in many ways more important than the DOW, and should be considered more of a leading indicator. If that is truly the case, then we have been in a bear market for the last eight years.
Trading throughout the balance of this decade and into the early part of the next decade is going to be the key to survival and for recovering the profits in your portfolio. We strongly recommend that you approach these markets with some level of expertise and knowledge of technical trading.
The future is going to be the future and we need to take advantage of every moment and prepare ourselves to be the very best we can be in whatever business or endeavor we are pursuing.
Check out a FREE trial of Adam Hewison's trading system.
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Bloomberg: Hedge Funds Cut Oil Bets as Ireland, China Sap QE2 Gains
Bets on gains in oil prices climbed to the highest level in at least four years in the week before the Federal Reserve announced it would spend $600 billion buying Treasuries through the second round of so called quantitative easing, or QE2, to keep the economic recovery on track.
Crude rose to a two year high of $87.81 a barrel on Nov. 11 in New York. It has since lost 7.8 percent as Ireland moved closer to a European Union bailout and China, the world’s biggest energy consumer, took steps to curb bank lending.
“The drop from extremely high levels makes perfectly valid sense, given the uncertainty now of QE2 and renewed concern regarding a European banking situation, namely Ireland,” said Kyle Cooper, director of research at IAF Advisors in Houston. “This has led to uneasiness regarding oil demand, and the liquidation occurred in that very large speculative position.” Net long positions dropped by 30,518 futures and options combined to 178,397 the week ended Nov. 16, according to the commission report. These are held by what the CFTC categorizes as managed money, including hedge funds, commodity pools and commodity trading advisers......Read the entire article.
Who does some of the major hedge funds turn to when they need advice?
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Dian L. Chu:Natural Gas: Better Days Ahead....in Two Years
However, this temporary seasonal strength does not alter the fact that U.S. gas stockpiles climbed to an unprecedented 3.843 trillion cubic feet in the week ended Nov. 12. A 9.3 percent above the five year average level and 0.3 percent above last year’s level.
As I said before that we are literally swimming in crude oil amid high inventory, but when it comes to natural gas, “drowning” would be a more appropriate description. While crude was hammered by China’s efforts to curb inflation, natural gas has an even bigger problem, nowhere to go, since it is region bound, and not as widely traded.
Worse yet, the latest short term outlook published on Nov.9 by the Dept. of Energy estimates natural gas production will rise in 2010 to the highest level in 37 years. Marketed natural gas production is forecast to increase by 2.5 percent this year, and fall by 1.2 percent in 2011.
However, the drop in 2011 is not because of a decrease in shale gas production, but mostly a result of a 13.5 percent production decline in GOM production from the 2010 drilling moratorium......Read the entire article and see Dian's charts.
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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.
Gold, Oil & Index ETF Trading Analysis
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Gold, Oil & Index ETF Trading Analysis
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Stephen Schork: Data Bullish for Economy, But Concerning for Nymex Futures
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
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
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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