Inventories and Threats of Chinese Tightening Give Commodity Bears The Advantage

Crude oil inventories spiked for a 2nd consecutive week, while on hand crude dropped in 3 out of 5 PAD districts the big gains in the Gulf Coast region created the net gain. Gasoline demand even fell for a 3rd consecutive week as gasoline inventories also made considerable gains. And oil prices showed the effects on Thursday touching a two week low of $88.00. But it wasn't all about inventories, commodities in general took a beating as traders seem to put more into the concerns over Chinese attempts to reel in their inflation worries with new rounds of tightening.


In a great article from Phil Flynn he reminds us "The Chinese, to keep up this charade, will have to buy more and more commodities from the global market to keep it going. The more artificially cheap commodities they feed to their ravenous marketplace will only leave the country wanting more and more. This of course would lead to an eventual monster bubble that if popped could take China’s economy down. The market already realizes what the Chinese should do".


Are the crude oil bulls in trouble here? According to Petromatrix GmbH yesterday’s crude oil's drop put it’s five day rolling mean below the nine day for the first time since Jan. 4. The decline of a short term indicator of momentum before a longer term measure is described as a “dead cross” and may be a sign that prices may correct lower. Olivier Jakob of Switzerland based consultant Zug reported “Brent and WTI are now suffering from a negative cross-over of the five to nine day moving average, and bulls will need to close today above the five day".

All the woes of Brent and the WTI as OPEC is increasingly facing calls to boost oil production as crude prices in Asia and Africa surpass $100 a barrel for the first time in two years. Nigeria’s Bonny Light grade, from which traders gauge the cost of West African oil, rose to $100.12 a barrel on Jan. 17, passing $100 for the first time since October 2008, according to data compiled by Bloomberg.

Our regular readers know how we feel about Fridays. The closing price on Friday will always tell us what traders are feeling comfortable about leaving on the table. As we go to press markets indicate that yesterdays sell off was a bit over done as prices have touched 90.22 before pulling back. Better top off your coffee, here's our numbers for Fridays trading.....


Crude oil was higher due to short covering overnight as it consolidates some of Thursday's decline. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term. Closes below the reaction low crossing at 88.45 would confirm that a short term top has been posted. If March renews this winter's rally, weekly resistance crossing at 93.87 is the next upside target. First resistance is this year's high crossing at 93.46. Second resistance is weekly resistance crossing at 93.87. First support is the reaction low crossing at 88.45. Second support is the reaction low crossing at 88.07. Crude oil pivot point for Friday morning is 90.10.


Natural gas was higher overnight and trading above the previous reaction high crossing at 4.707 thereby renewing the rally off December's low. Stochastics and the RSI are diverging but have turned bullish signaling that sideways to higher prices are possible near term. If February extends the rally off December's low, the 50% retracement level of the June-October decline crossing at 4.876 is the next upside target. Closes below the 20 day moving average crossing at 4.448 are needed to confirm that a short term top has been posted. First resistance is the overnight high crossing at 4.747. Second resistance is the 50% retracement level of the June-October decline crossing at 4.876. First support is the 10 day moving average crossing at 4.514. Second support is the 20 day moving average crossing at 4.448. Natural gas pivot point for Friday morning is 4.641.


Gold was lower overnight as it extends this month's decline. Stochastics and the RSI are becoming oversold but remain bearish signaling that sideways to lower prices are possible. If February extends this month's decline, the reaction low crossing at 1331.10 is the next downside target. Closes above the 20 day moving average crossing at 1382.20 are needed to confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 1368.80. Second resistance is the 20 day moving average crossing at 1382.20. First support is the overnight low crossing at 1340.20. Second support is the reaction low crossing at 1331.10. Gold Pivot point for Friday morning is 1353.30.


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Apple and Goldman Crash, But is the High Still Coming?

On Wednesday the equities market poured out a sea of red candles. Leaving most traders and investors feeling that most all of their recent gains had disappeared in one short session. And we have warned repeatedly that strong selling volume sessions like this is typically an early warning that distribution selling is starting to enter the market.

Distribution selling is when the big money players start unloading large positions in anticipation of a market top. They do try to hide it by selling into good news or earnings when the average investors are buying into all the hype of better than expected earnings on the news. As average investors jump into the market because of the good news, this extra liquidity helps the big money players (banks, hedge funds, etc..) sell large amounts of their positions to the eager buyers. This is why the “buy on rumor and sell on the news” saying is kicked around wall street.....

To me, panic selling is typically seen as a bullish sign to enter the market simply because if everyone is/has rushed to the door to sell what they own, then really most of the down side risk has been taken out of the market. That being said after an extended multi month rally and higher than selling volume I look at it more like distribution selling and a shift in momentum.

I feel the precious metals sector will be starting something like this in the near futures, and possibly it has already started as seen in the rising volume on the down days.

Let’s take a look at the charts…

AAPL – Apple Stock 10 Minute Chart
Two days ago AAPL shares took big hit because of some medical issues with the CEO, the shares did float back up. But what is important here is the distribution selling which took place after Apple came out with much better than expected earnings. The general public loves to buy good news especially when it’s for a famous company. But large sellers stepped in unloading as much of their position as they could before making it look to obvious.

The average investor listening on the radio or catching snippets on the news do not pick up on these things which is why the big money players can get away with this over and over again.

GS – Goldman Sachs 10 Minute Chart
Goldman came out with average earnings being just above estimates and the share price took a beating with very strong volume.

Distribution selling looks to be entering the market and this is a bearish sign. I would not be surprised if we see the market top out in the next 5-10 trading sessions.

SPY – SP500 10 Minute Chart
Here you can see my green panic selling indicator spiking up much higher than normal dwarfing the past sell off spikes. This makes me think the big money is now starting to unload which will shift the current upward momentum to more of a sideways whipsaw type of price action. Eventually it will roll over and a new down trend will start.

As you can see from this chart the SP500 is trading down at a support level so a bounce is likely going to take place. If in fact today was the first distribution day then the big money should let the price inflate back up to the recent highs and possibly make a new high to help keep investors bullish before the hit their SELL BUTTON again… They like to play these games and understanding them is a key part of trading. Expect choppy price action for a week or two…...

Silver Daily Chart – The Next Wave of Selling?
I look at silver and gold as one… so what I show here is the exact same for gold.

As you can see silver is trading under 3 of its key moving averages and Wednesdays bounce was sold into after testing the 14 and 20 period moving averages.

Take a looking at the bottom of the chart and you can see distribution selling volume as the spikes are all down days. If silver breaks below the $28 level then we could easily and quickly see the $26 and maybe even the $24 level.

The Mid-Week Market & Metals Trading Conclusion:
In short, the financial power players are pulling out all the tricks to shake traders out of their positions. A lot of people shorted the market in the past 2 weeks only to get hung out to dry and most likely stopped out of their short positions for a loss. Fortunately we did the opposite taking another long position in the SP500 ETFS because my market internal indicators, market breadth and simple trading strategy clearly pointed out that the average investor was trying to pick a top by shorting the market. As we all know, the market is designed to hurt the masses which is why I focus on the underlying trends, price action, volume and market sentiment for timing trend changes.

That being said, I still think the market could grind higher and make another new high. But any rally or new high will most likely get stepped on with heavy selling. Expect strong selling days followed by a couple days of light volume sessions where the price drifts back up into resistance levels. This could take a week or two to unfold so don’t jump the gun and short yet. It’s best to see more distribution selling before picking a top.

If you like these trading reports or if you would like to get my daily pre-market trading videos, intraday charts, updates and trade alerts be sure to join my newsletter. Visit The Gold and Oil Guy.Com

Chris Vermeulen


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Crude Oil Really is Our New World Currency

This weeks visit to the U.S. by Chinese leader Hu Jintao is making it painfully obvious for crude oil traders that crude oil is the new world currency. And while President Hu is apparently furious at the U.S. QE and QE2 actions of printing money, give them credit for trying to print or control all of the "new world currency" they can. The Chinese are replacing American companies in Costa Rica, expanding projects in the middle east and Africa and starting new projects off the coast of Cuba while U.S. companies still look for approval to drill within eye site of the China/Cuba projects. And it's paying off for them as reports show Chinas oil production increased 6.9% in 2010.

With pipelines plugged and European debt crisis slinking their way out of the news all eyes are back to inventory levels and the Euro/Dollar trade. Enjoy the temporary return of the quiet, peaceful, easy trade. Our future lies in Chinese GDP numbers, inflation and currency manipulation news. On that subject, China's National Bureau of Statistics Thursday also reported that fourth quarter gross domestic product grew 9.8% from a year earlier, above economists' expectations for a 9.2% expansion. So much for the poor guys and their attempt at gradually imposing lending restrictions to prevent runaway inflation.

With looming inventory numbers and the dollar falling along side crude oil overnight, let's take a run at it today using these pivot, support and resistance numbers.....

Crude oil was lower overnight as it consolidates some of last week's rally. Stochastics and the RSI are turning bearish signaling that sideways to lower prices are possible near term. Closes below the reaction low crossing at 87.25 would confirm that a short term top has been posted. If February extends last week's rally, this year's high crossing at 92.58 is the next upside target. First resistance is this year's high crossing at 92.58. Second resistance is weekly resistance crossing at 93.87. First support is the reaction low crossing at 87.25. Second support is the reaction low crossing at 84.09. Crude oil pivot point for Thursday morning is 92.10.

Natural gas was slightly higher overnight as it extends the short covering rebound off last week's low. Stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices are possible near term. Closes below the 20 day moving average crossing at 4.414 are needed to confirm that a short term top has been posted. If February renews the rally off December's low, the 50% retracement level of the June-October decline crossing at 4.876 is the next upside target. First resistance is this month's high crossing at 4.707. Second resistance is the 50% retracement level of the June-October decline crossing at 4.876. First support is the 20 day moving average crossing at 4.414. Second support is December's low crossing at 3.985. Natural gas pivot point for Thursday morning is 4.517.

Gold was lower overnight signaling a possible end to a two day short covering bounce off Monday's low. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible. If February extends this month's decline, the reaction low crossing at 1331.10 is the next downside target. Closes above the 20 day moving average crossing at 1385.20 are needed to confirm that a short term low has been posted. First resistance is the 20 day moving average crossing at 1385.20. Second resistance is this month's high crossing at 1424.40. First support is the reaction low crossing at 1352.70. Second support is the reaction low crossing at 1331.10. Gold pivot point for Thursday morning is 1371.50.


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Five New Ideas for Energy Markets to make Money With in 2011

2010 was an amazing year for commodity traders so we have to ask ourselves is the top in? Are we now in "bubble territory" when it comes to commodities like oil? And what about energy, do we still have room to run in the energy sector?

In today's short video we are going to show you some of the markets that we are looking at in the energy complex. We're going to be looking at coal, oil, solar and some other large energy companies and ETF's.

As this is a short video, be sure to check in and watch our webinar this Thursday, January 20th at 4pm EST/9pm GMT. You will need to reserve a spot as tour webinars typically reach capacity quickly. Just click here to register for this weeks webinar. As always all webinars are free to attend.

Take a look at what we will be covering in the webinar and check out our new portfolio manager which we will be using extensively throughout today's video. We also have a big surprise which will be announced at the webinar and I have no doubt that you will like. Today's video requires no registration and is free to watch:

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OPEC Quietly Raising Output Overshadowed By Chinese Macroeconomic Data

Positive Chinese macroeconomic data gave the crude oil and commodity bulls the advantage in the European session overnight even as traders digest news that OPEC has quietly been increasing production. OPEC seems to keep finding ways to make themselves irrelevant as OPEC's own report revealed that compliance level for the "OPEC 11" dropped to 54.0% in December 2010. Looks like OPEC as quietly been raising production while sending their cheerleaders out to the press to call for higher oil prices for some of their ailing economies as they themselves fight to contain food prices in some of their own countries.

And this may not make the nightly news but I am sure the visit to the White House by Chinese President Hu Jintao will have the leaders focusing on world food prices as China has made a priority out of bringing new energy sources online at all cost. And Washington will be playing catch up again, but there is hope for the new "Clintonized" Obama agenda as the attitude towards business coming from the administration is changing quickly. Does this mean we have some new permits being approved for Nuclear power plants right around the corner? We won't be holding our breaths for that but we can still dream.

Oil futures are up this morning as far out as February 2012 but well below the the critical 92.58 level. Is it all aboard the bull bus this morning? Here's your pivot, resistance and support numbers for Wednesdays trading.......

Crude oil was higher overnight and remains poised to extend last week's rally. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term. If February extends last week's rally, this year's high crossing at 92.58 is the next upside target. Closes below the reaction low crossing at 87.25 would confirm that a short term top has been posted. First resistance is this year's high crossing at 92.58. Second resistance is weekly resistance crossing at 93.87. First support is the reaction low crossing at 87.25. Second support is the reaction low crossing at 84.09. Crude oil pivot point for Wednesday morning is 92.21.

Natural gas was slightly higher overnight as it consolidates above the 20 day moving average crossing at 4.385. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term. Closes below the 20 day moving average crossing at 4.385 are needed to confirm that a short term top has been posted. If February renews the rally off December's low, the 50% retracement level of the June-October decline crossing at 4.876 is the next upside target. First resistance is this month's high crossing at 4.707. Second resistance is the 50% retracement level of the June-October decline crossing at 4.876. First support is the 20 day moving average crossing at 4.385. Second support is December's low crossing at 3.985. Natural gas pivot point for Wednesday morning is 4.450

Gold was higher due to short covering overnight as it consolidates some of last week's rally. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible. If February extends last week's decline, the reaction low crossing at 1331.10 is the next downside target. Closes above the 20 day moving average crossing at 1386.70 are needed to confirm that a short term low has been posted. First resistance is the 20 day moving average crossing at 1386.70. Second resistance is this month's high crossing at 1424.40. First support is the reaction low crossing at 1352.70. Second support is the reaction low crossing at 1331.10. Gold pivot point for Wednesday morning is 1367.00.


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Crude Oil Bears Gain Momentum on Pipeline Opening and Weaker Euro

Hopes of a stronger Euro were dashed this week as European leaders have made a surprise move of putting off any real rescue plan until March. Giving a new round of strength to the U.S. Dollar and putting pressure on the crude oil bulls at least for the near term. The reopening of the Alyeska Pipeline has also given the crude oil bears reason for hope as the pipeline operators officially announced that repairs are complete. In its monthly report on Tuesday, the IEA, said world oil demand growth in 2011 would be slightly higher than it had previously expected, although it would not reach the "exceptional levels" of last year.

Expect a bit more "noise" from OPEC in 2011 as the current OPEC President will be Iran's Oil Minister Massoud Mirkazemi. And in a news conference Mirkazemi stated "None of the OPEC members find $100 concerning or irrational. Some of the OPEC members see no need for an emergency meeting even with prices at $110 or $120". All that really matters to the west is if the more moderate producers like Saudi Arabia, Gulf allies Kuwait and the United Arab Emirates will make a move to prevent prices from escalating further.

The 3 day weekend is over for us here in the U.S. so let's trade, here is your pivot, support and resistance numbers for Tuesday.......

Crude oil was slightly lower overnight as it consolidates some of last week's rally. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term. If February extends last week's rally, this year's high crossing at 92.58 is the next upside target. Closes below the reaction low crossing at 87.25 would confirm that a short term top has been posted. First resistance is this year's high crossing at 92.58. Second resistance is weekly resistance crossing at 93.87. First support is the reaction low crossing at 87.25. Second support is the reaction low crossing at 84.09. Crude oil pivot point for Tuesday morning is 91.22.

Natural gas was slightly higher overnight as it consolidates above the 20 day moving average crossing at 4.393. Stochastics and the RSI are neutral signaling that sideways trading is possible near term. Closes below the 20 day moving average crossing at 4.393 are needed to confirm that a short term top has been posted. If February renews the rally off December's low, the 50% retracement level of the June-October decline crossing at 4.876 is the next upside target. First resistance is this month's high crossing at 4.707. Second resistance is the 50% retracement level of the June-October decline crossing at 4.876. First support is the 20 day moving average crossing at 4.393. Second support is December's low crossing at 3.985. Natural gas pivot point for Tuesday morning is 4.510.

Gold was higher due to short covering overnight as it consolidates some of last week's rally. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible. If February extends last week's decline, the reaction low crossing at 1331.10 is the next downside target. Closes above the 20 day moving average crossing at 1386.10 are needed to confirm that a short term low has been posted. First resistance is the 20 day moving average crossing at 1386.10. Second resistance is this month's high crossing at 1424.40. First support is the reaction low crossing at 1356.50. Second support is the reaction low crossing at 1331.10. gold pivot point for Tuesday morning is 1361.10.


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David Bannister: Gold Remains Bearish, SP 500 Appears to Be Topping

Well, our time line for the crude oil pull back is upon us this week. Right or wrong we all fully backed by safe stops being in place. And David Banister appears to be making the same call in gold and the SP 500. His most recent forecasts for the SP 500 and Gold have been calling for interim peaks in both around Mid-January. Gold, he told his subscribers a few weeks ago, was definitely topping and likely to drop now to $1270-$1280 per ounce before resuming the Bull Market advance. The SP 500 he had forecasted a 1285-1315 topping area since the 1175 pivot lows on that index, and we are very close as well in that regard.

Gold has been in a 9 plus year bull market since 2001 and has another 3 years plus left on this Bull run. However, pauses must occur along the way and this should be a 4th wave corrective Elliott pattern if his views are right. This is taking the form of a 3-3-5 correction from the $1430 top. We are in the final 5 waves down now, and it’s about to get ugly near term so strap on your seat belts. His chart forecast is below and if he is right, there will be excellent opportunities to pick up some good Juniors and also the precious metals themselves around that $1270-$1280 area. Following this correction, we could have a run to about $1515 per ounce, and he expects this entire pattern to take 6 months to a year to play out from the $1430 top to the $1270 ish bottoms, and back to $1515.

The SP 500 is completing the final 5th wave movement from the 1010 Jul 1st lows this past summer. This is only the first full wave pattern movement of a big 5 wave leg up from July 1st. What this means in English is we have a near term top likely in the 1285-1315 areas, followed by a wave 2 correction to around the 1175-1180 areas. Sentiment right now is running at major extremes last seen at interim peaks in January of 2010 and April of 2010 where he had also forecasted tops within days of the peaks. Banister is looking for the SP 500 to end up around 1600 on the index after this coming wave 2 correction, but he reminds us to take it one pivot and step at a time. Below is his forecast chartwise:

If you would like to benefit from learning more about Elliott Wave based forecasting using David Banisters methods, which have been historically accurate, please check him out at Market Trend Forecast.com There is a coupon available if you’d like to subscribe or you can sign up for free occasional reports.

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Crude Oil, Energy and Food.....is This 2008 All Over Again?

Regular visitors here at The Crude Oil Trader may sometimes think we are always bearish and usually pushing the doomsday scenarios. But that couldn't be further from the truth, we do believe in Uncle Warren's "never bet against the U.S.". But what we call the new world economy has proven to us that future demand in China and India will create challenges for us that will make producing affordable food nearly impossible. And if we are to find a way it will take leadership in Washington that we have not seen in......oh, 100 years!

One of my favorite traders in the commodities trading is Dian L. Chu, and this week she wrote.......During the past decade, Finished Goods PPI has risen roughly 35% while the CPI was up about 30%, which seems to suggest producers typically pass through most of the cost increases to the end market.


And news such as the following could only mean that there’s pent up inflation pressure up the supply chain just waiting to be passed through. Commodity prices jumped to two year high on expectations for global economic growth and lower U.S. forecasts for agricultural inventories. The Food Price Index (See Charts Below) compiled by the U.N. Food and Agriculture Organization (FAO) surged 25% in 2010 and hit an all time high in December, at the level even worse than the food crisis in 2008. FAO acknowledged that this is unlikely the peak yet.

And if you think the 25% spike in food prices seems extreme, wait till you check out the Non-Food Agriculture (NFA) prices. The chart below from The Economist shows that the NFA prices were up almost 80% in 2010! NFAs are agricultural materials with heavy industrial applications such as cotton and rubber.

It's really not difficult math, it's as if we can't afford to let the economy get any better or we'll repeat 2008. Our economy can't stand the $4.00 gasoline of 2008, what will happen at $5.00. And it's not a matter of if we get $5.00 gas, just when. Should we be happy if we can just maintain the balance where we are at right now? Well, that isn't possible either as this current "rally" has no real merit as it is build upon a house of cards called QE and QE2. How long will oil rich nations continue to buy that debt?

This surely won't keep us from trading today, just gives us all the more reason to day trade using these pivot, support and resistance numbers.........

Crude oil was lower due to profit taking overnight as it consolidates some of this week's rally. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term. If February extends this week's rally, this year's high crossing at 92.58 is the next upside target. Closes below last Friday's low crossing at 87.25 would confirm that a short term top has been posted. First resistance is this year's high crossing at 92.58. Second resistance is weekly resistance crossing at 93.87. First support is last Friday's low crossing at 87.25. Second support is the reaction low crossing at 84.09. Crude oil pivot point for Friday morning is 91.51.

Natural gas was steady overnight hinting that the two-day correction off Monday's low might be ending. Stochastics and the RSI are neutral signaling that sideways trading is possible near term. Closes below the 20 day moving average crossing at 4.355 are needed to confirm that a short term top has been posted. If February renews the rally off December's low, the 50% retracement level of the June-October decline crossing at 4.876 is the next upside target. First resistance is last Tuesday's high crossing at 4.707. Second resistance is the 50% retracement level of the June-October decline crossing at 4.876. First support is the 20 day moving average crossing at 4.355. Second support is December's low crossing at 3.985. Natural gas pivot point for Friday morning is 4.424.

Gold was lower overnight as it consolidates some of this week's rally. Stochastics and the RSI are turning neutral signaling that sideways to lower prices are possible. If February renews last week's decline, the reaction low crossing at 1331.10 is the next downside target. Closes above the 20 day moving average crossing at 1388.20 are needed to confirm that a short term low has been posted. First resistance is the 20 day moving average crossing at 1388.20. Second resistance is last Monday's high crossing at 1424.40. First support is last Friday's low crossing at 1356.50. Second support is the reaction low crossing at 1331.10. Gold pivot point for Friday morning is 1383.00.


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Gold, Silver, and the Dollar....How Does Their Future Look?

Chris Vermeulen has been telling us since mid-October of last year that gold was starting to give hints of distribution selling. Then in November silver started warning us that some big players were taking some profits off the table also. In todays post Chris reminds us that distribution selling is easy to spot on the charts. Saying that in short you will see heavy volume selling accompanied with strong moves to the downside.

Now if we look at the US Dollar chart we see the exact opposite price action. We see sharp rallies during October and November of last year. It’s normal to say that gold and silver move inverse to the Dollar so this price action makes perfect sense.

The interesting thing with the US Dollar is that in Nov-December it rallied breaking through a key resistance level and has been consolidating above support ever since. If this bullish pattern (bull flag) plays out, then it’s just a matter of time before the dollar makes another strong rally upwards, which will put downward pressure on stocks and commodities.

Take a look at the charts below....

US Dollar Daily Chart
The 50 period moving average has provided key support/resistance levels for the previous trends and if it holds true going forward then we are not far from another rally in the dollar.

Gold Futures Daily Chart
Gold moves inverse to the dollar so if we get a higher dollar then look for gold to have a stair step pattern lower.

Silver Futures Daily Chart
Silver looks about ready to do the same thing as gold.

Precious Metals and Dollar Trading Conclusion:
In short, we could see a major shift in momentum from up to down in both precious metals and the equities market. Keep in mind the market has a way of dragging out patterns/moves so while the chart looks bearish and I think a reversal is near, things could just chop around for another month or so before a definitive breakout is made. Choppy market conditions are great for trading options but no short term trend traders like myself. This is why you don’t want to anticipate moves (pick a top). Currently I am neutral on metals and the dollar waiting for a setup which must have clear risk/reward characteristics.

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Washington's Goal For Crude Oil Prices.......Everybody Sing "Can You Take Me Higher"

Preparing for our post this morning and another great day of trading I again was struck by the stark contrast in energy policies coming out of Washington and the policies....or should I say PROFITS coming out of CNPC. PetroChina's parent company.

Bloomberg News reported this morning....China National Petroleum Corp., the parent of the country’s biggest oil and gas producer, increased its profit by 30 percent last year as oil prices rose. The majority shareholder in Hong Kong listed PetroChina Co. earned 167.6 billion yuan ($25.4 billion), President Jiang Jiemin said in a statement on CNPC’s website today, without specifying whether the income was before or after tax. Profit reached 128.6 billion yuan in 2009, its annual report shows.

CNPC benefited from the 15 percent jump in oil prices last year and higher output from fields outside China. The Beijing based company, which holds assets and interests in 30 countries, said overall crude output may rise by an average of 2 million metric tons annually during the next five years, and CNPC is targeting a “rapid” increase in gas production.

“The estimated increases make sense,” Yin Xiaodong, chief oil analyst at Beijing based Citic Securities Co., said by telephone. “Gas production growth will definitely outpace increases in oil, and overseas acquisitions will give CNPC a strong boost in the long term.” CNPC’s oil and gas production in countries including Kazakhstan rose 14 percent last year. PetroChina said this week its venture with BP Plc met their 2010 output target for the Rumaila oilfield in southern Iraq.

All of this while oil prices soared after the release of the final scathing report by the White House oil spill commission. Co-Chairman William Reilly alluded to in a press conference that if you thought that the panel investigating the Deep Water Horizon disaster would fade away, well you have another think coming. Mr. Reilly says that he plans to make a “lot of noise”! This of course will send major oil companies scurrying to find oil in far away places that China has been doing business with for years now.

The energy policy coming out of Washington is simple. Make oil as expensive as possible making current food supply issues worldwide and for Americans an even larger burden. And keep the U.S. as reliant as possible on foreign oil and energy. And China just keeps expanding it's oil exploration at alarming rates, and good for them. I found this great website that we all might find very useful. Learn to Speak Chinese, if we are going to need to beg for food we better be using the right language. And yes, our fund has taken larger positions in both etf's MOO and DBA. Our favorite way to play food.

Let's try to make some money today so maybe we can afford that food and here is the numbers we are using........

Crude oil was lower due to profit taking overnight as it consolidates some of this week's rally. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term. If February extends this week's rally, this year's high crossing at 92.58 is the next upside target. Closes below last Friday's low crossing at 87.25 would confirm that a short term top has been posted. First resistance is this year's high crossing at 92.58. Second resistance is weekly resistance crossing at 93.87. First support is last Friday's low crossing at 87.25. Second support is the reaction low crossing at 84.09. Crude oil pivot point for Thursday morning is 91.68.

Natural gas was lower overnight hinting that the two day correction off Monday's low might be ending. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near term. If February renews the rally off December's low, the 50% retracement level of the June-October decline crossing at 4.876 is the next upside target. Closes below the 20 day moving average crossing at 4.343 are needed to confirm that a short term top has been posted. First resistance is last Tuesday's high crossing at 4.707. Second resistance is the 50% retracement level of the June-October decline crossing at 4.876. First support is the 20 day moving average crossing at 4.343. Second support is December's low crossing at 3.985. Natural gas pivot point for Thursday morning is 4.510.

Gold was lower overnight as it consolidates some of this week's rally. However, stochastics and the RSI have turned bullish hinting that a short term low might be in or is near. Closes above the 20 day moving average crossing at 1388.10 are needed to confirm that a short term low has been posted. If February renews last week's decline, the reaction low crossing at 1331.10 is the next downside target. First resistance is the 20 day moving average crossing at 1388.10. Second resistance is last Monday's high crossing at 1424.40. First support is last Friday's low crossing at 1356.50. Second support is the reaction low crossing at 1331.10. Gold pivot point for Thursday morning is 1383.70.

Don't miss our latest video "3 Smart Indicators To Trade Crude Oil With Synergism"

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U.S. Dollar Strength Will Trump Leaky Pipeline in the Oil Trade

Leaky pipelines might be big news to traders but international debt issues and it's effect on the dollar continue to be the driving force behind the oil trade. If we see a flight to quality in the U.S. dollar then look for oil bulls to sell off positions. The largest sell offs in 2010 were always over Greece and Ireland debt news. Japan moves eases concerns then that might be bullish for oil. News from Reuters reported that "Japan promised to buy euro zone bonds this month in a show of support for Europe's struggle with a seething debt crisis", and some traders believe that's enough to push oil through this years highs.

On Tuesday our "MarketClub Trade Triangles" issued a short term traders exit signal for all gold "short positions" on a Green Daily “Trade Triangle” @ $1,378.52. Our Trade Triangles are leaving intermediate traders in a sidelines position and our long term traders in a hold long position. If you are not yet a member of MarketClub see what you are missing in 2011 with a 30 Day Risk Free trial and receive 3 valuable bonuses just for giving us a try.

Here's your pivot points, resistance and support numbers for crude oil, natural gas and gold for Wednesday morning......

Crude oil was lower due to profit taking overnight as it consolidates some of Tuesday's rally. Stochastics and the RSI have turned bullish signaling that sideways to higher prices are possible near term. If February extends this week's rally, this year's high crossing at 92.58 is the next upside target. Closes below last Friday's low crossing at 87.25 would confirm that a short term top has been posted. First resistance is the overnight high crossing at 91.74. Second resistance is this year's high crossing at 92.58. First support is last Friday's low crossing at 87.25. Second support is the reaction low crossing at 84.09. Crude oil pivot point for Wednesday morning is 90.48.

Natural gas was higher overnight as it consolidates some of last week's decline. 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 4.332 are needed to confirm that a short term top has been posted. If February renews the rally off December's low, the 50% retracement level of the June-October decline crossing at 4.876 is the next upside target. First resistance is last Tuesday's high crossing at 4.707. Second resistance is the 50% retracement level of the June-October decline crossing at 4.876. First support is the 20 day moving average crossing at 4.332. Second support is December's low crossing at 3.985. Natural gas pivot point for Wednesday morning is 4.441.

Gold was lower overnight as it some of this week's short covering gains. Stochastics and the RSI are turning bullish hinting that a short term low might be in or is near. Closes above the 10 day moving average crossing at 1388.40 would confirm that a short term low has been posted. If February renews last week's decline, the reaction low crossing at 1331.10 is the next downside target. First resistance is the 10 day moving average crossing at 1388.40. Second resistance is last Monday's high crossing at 1424.40. First support is last Friday's low crossing at 1356.50. Second support is the reaction low crossing at 1331.10. Gold pivot point for Wednesday morning is 1381.20.


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3 Smart Indicators To Trade Crude Oil With Synergism

The holidays are over and now that we have put what we call the "Silly Season" behind us, it's time to look at the crude oil market in a serious way again. Today's crude oil trading video will help us do just that. The oil market has been a disappointment to a lot of traders as it has been stuck in a broad trading range for the past 18 months.

The current trading range will eventually be broken and the market will move in the direction of the breakout. While our long term indicator, the monthly "Trade Triangle" continues to be positive, short term "Trade Triangles" are indicating weakness. With a score of -60 for February crude oil, we expect that this market will be range bound in the short term.

One of the indicators we discussed in an earlier video is in an oversold condition, indicating a potential rally from current levels could be at hand. That being said we would wait for some other combination of indicators to confirm that a move is underway.

For the past 18 months the best way to trade crude oil has been with the use of an oscillator indicator. The one we're looking at in today's video clearly shows you where the lows and highs are coming in and indicates a potential market bounce from current levels.

We expect that after such a long period of sideways action, almost 18 months, that the crude oil market will come alive and present some great trading opportunities in Q1 and Q2. As always our video's are free to watch and there are no registration requirements.

Watch "3 Smart Indicators To Trade Crude Oil With Synergism"

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Pipeline Closure....Higher Oil Prices or Jobs?

The possibility of supply constraints on crude oil from the closure of the Trans Alaska Pipeline helped crude oil spike up a $1.22 on Monday. This 800 mile long oil pipeline, which ships crude from Alaska's North Slope to the port of Valdez, is a vital supplier for refiners on the U.S. west coast.

The pipeline was shut down Saturday after Alyeska Pipeline Service discovered the leak. Alyeska has stated that they are developing a plan to restore the pipeline for the entire 800 mile line. Gasoline prices also came under pressure from traders for the closure.

In reports from Reuters News, "shutdown of one of the United States key oil arteries, which carries about 12 percent of the country's production, is the latest setback for the aging, 33 year old pipeline, which handles less than a third of the oil it did at its peak in the 1980s. Closures of the pipeline, although short, has provoked criticism of its operators, particularly major owner BP, whose reputation is already at an all time low after the Gulf of Mexico blow out last year, causing the largest ever U.S. oil spill.

The shutdown of the 800 mile line, which runs from the Prudhoe Bay oilfield to the tanker port of Valdez, has not yet affected shipments and tankers are being loaded on schedule at Valdez, meaning there is no immediate danger of restricted oil supply. Oil produced during the shutdown will be stored at Prudhoe Bay until the pipeline reopens".

With tankers loading on schedule this should have effect on futures prices but this will become a political football for both sides of the isle. The left will paint this as another reason to curtail oil production and the right will be calling for a new energy policy out of Washington. Jobs? Remember the 70's and all of the men traveling to Alaska to build the pipeline? A new pipeline and a few "fast tracked federal approvals" for some new nuclear power plants would go along way to getting to Americans back to work. And all done with private money, what a concept.

Just click here to get a FREE trend analysis of BP. Now let's trade some crude oil, natural gas and Gold today........

Crude oil was higher due to short covering overnight as it consolidates some of last week's decline but remains below the 20 day moving average crossing at 89.87. Stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices are possible near term. If February renews last week's decline, the reaction low crossing at 87.43 is the next downside target. Closes above the 10 day moving average crossing at 89.87 would temper the near term bearish outlook. First resistance is the 10 day moving average crossing at 89.87. Second resistance is last Monday's high crossing at 92.58. First support is last Friday's low crossing at 87.25. Second support is the reaction low crossing at 84.09. Crude oil pivot point for Tuesday morning is 89.12.

Natural gas was slightly higher overnight as it consolidates some of last week's decline. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near-term. Closes below the 20 day moving average crossing at 4.315 are needed to confirm that a short term top has been posted. If February renews the rally off December's low, the 50% retracement level of the June-October decline crossing at 4.876 is the next upside target. First resistance is last Tuesday's high crossing at 4.707. Second resistance is the 50% retracement level of the June-October decline crossing at 4.876. First support is the 20 day moving average crossing at 4.315. Second support is December's low crossing at 3.985. Natural gas pivot point for Tuesday morning is 4.390.

Gold was higher due to short covering overnight as it consolidates some of last week's decline. Stochastics and the RSI are turning neutral to bullish hinting that a short term low might be in or is near. Closes above the 10 day moving average crossing at 1391.50 would confirm that a short term low has been posted. If February extends last week's decline, the reaction low crossing at 1331.10 is the next downside target. First resistance is the 10 day moving average crossing at 1391.50. Second resistance is last Monday's high crossing at 1424.40. First support is last Friday's low crossing at 1356.50. Second support is the reaction low crossing at 1331.10. Gold pivot point for Tuesday morning is 1371.80.


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Crude Oil Rebounding But is $90 Our New Resistance Level?

Crude oil is rebounding this morning but still trading below 90 dollar levels at the moment. Traders seem to be focusing on the minimal impact the shut down of the Alaskan pipeline system is having and appear to be more concerned about Chinas sharp trade surplus decline. Is the $90 level showing itself to be firm resistance today?

Crude oil was higher in Sunday evenings overnight session due to short covering as it consolidates some of last week's decline but remains below the 20 day moving average crossing at 89.82. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term. If February extends last week's decline, the reaction low crossing at 87.43 is the next downside target. Closes above the 10 day moving average crossing at 90.01 would temper the near term bearish outlook. First resistance is the 10 day moving average crossing at 90.01. Second resistance is last Monday's high crossing at 92.58. First support is last Friday's low crossing at 87.25. Second support is the reaction low crossing at 84.09. Crude oil pivot point for Monday is 88.98.

Natural gas was lower overnight as it extends last week's decline. Stochastics and the RSI have turned bearish signaling that sideways to lower prices are possible near term. Closes below the 20 day moving average crossing at 4.318 would confirm that a short term top has been posted. If February renews the rally off December's low, the 50% retracement level of the June-October decline crossing at 4.876 is the next upside target. First resistance is last Tuesday's high crossing at 4.707. Second resistance is the 50% retracement level of the June-October decline crossing at 4.876. First support is the 20 day moving average crossing at 4.318. Second support is December's low crossing at 3.985. Natural gas pivot point for Monday is 4.479.

Gold was slightly lower overnight as it extends last week's decline. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term. If February extends last week's decline, the reaction low crossing at 1331.10 is the next downside target. Closes above the 10 day moving average crossing at 1392.90 would confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 1392.90. Second resistance is last Monday's high crossing at 1424.40. First support is last Friday's low crossing at 1356.50. Second support is the reaction low crossing at 1331.10. Gold pivot point for Monday is 1372.00.


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Does This Indicator Make Gold an "Easy" Trade?

Gold bulls took one of their biggest hits in some time on January 4th and so far it has failed to appreciably recover. So what's next for this most precious metal? Take a few minutes and watch how this one little indicator has been catching the swings in gold incredibly well for the last several months. You may or may not be familiar with this little known profit maker, but if you're not yet using it you certainly want to learn how to profit from it in 2011.

We are talking about the Williams %R indicator. The Williams indicator is calculated using 14 periods and can be used on intraday, daily, weekly or monthly data. The time frame and number of periods will likely vary according to desired sensitivity and the characteristics of the individual security. And lately it has been very reliable for entry and exit strategies on gold. Watch our latest video from MarketClubs Adam Hewison on how he has used the Williams indicator for trading gold.

In December Hewsison told us "On charts, gold cut early losses, bouncing off lows at around $1,362 an ounce, a key support level in line with a series of lows set in December". Hewison also said "gold's bounce up from session lows signals that it has found support after falling this week. Every time when gold had gotten down to these levels, it's very close to making a reversal higher. Gold has risen toward its record $1,430.95 an ounce level three times since November but failed each time." Let's go to the video and see how Adam will trade gold using the Williams indicator.

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Crude Oil, Natural Gas and Gold Traders Respond to Labor Departments Employment Numbers

Crude oil did rebound overnight due to short covering after crude oil for February delivery settled at $88.38 a barrel, $1.92 lower than Wednesdays trading session. Big pressure was put on commodities as the U.S. dollar rose to a one month high against the euro on Thursday. But all markets were awaiting the U.S. Labor Department's monthly report that was expected to show that the unemployment rate dipped to 9.7 percent from 9.8 percent and that the economy created a net total of 145,000 jobs. But traders were disappointed as only 103,000 jobs were added bringing the unemployment rate down to 9.4%. The lowest unemployment rate in 19 months but not enough to give investors the confidence needed to rebound at Fridays opening.

While crude oil did consolidate some of Thursday's decline it remains below the 20 day moving average crossing at 89.84. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term. If February extends this week's decline, the reaction low crossing at 87.43 is the next downside target. Closes above the 10 day moving average crossing at 90.31 would temper the near term bearish outlook. First resistance is the 10 day moving average crossing at 90.31. Second resistance is Monday's high crossing at 92.58. First support is Thursday's low crossing at 87.85. Second support is the reaction low crossing at 87.43. Crude oil pivot point for Friday morning is 88.98.

Natural gas was lower overnight as it extends this week's decline. Stochastics and the RSI are turning bearish signaling that sideways to lower prices are possible near term. Closes below the 20 day moving average crossing at 4.325 would confirm that a short term top has been posted. If February renews the rally off December's low, the 50% retracement level of the June-October decline crossing at 4.876 is the next upside target. First resistance is Tuesday's high crossing at 4.707. Second resistance is the 50% retracement level of the June-October decline crossing at 4.876. First support is the 20 day moving average crossing at 4.317. Second support is December's low crossing at 3.985. Natural gas pivot point for Friday morning is 4.479.

Gold was sharply lower overnight and has broken out below support marked by December's low crossing at 1361.60. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term. If February extends this week's decline, the reaction low crossing at 1331.10 is the next downside target. Closes above the 10 day moving average crossing at 1393.40 would confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 1395.90. Second resistance is Monday's high crossing at 1424.40. First support is the overnight low crossing at 1356.50. Second support is the reaction low crossing at 1331.10. Gold pivot point for Friday morning is 1372.00.


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Surviving and Thriving as the U.S. Dollar and Silver Reverse!

The first week of trading for 2011 has been interesting for traders as precious metals melt down on the new found strength in the U.S. Dollar. Equities on the other hand bucked the trend and moved higher as they get bought into earning season. Once the earnings start to be released we should see the market get sold on the good numbers and retail traders will buy into the good numbers as the smart money selling their shares while there is liquidity in the market.

Speaking of pullbacks, we have been talking about silver and gold forming a top. A couple months ago in November we saw the first warning sign of distribution selling in the precious metals sector. There was a large drop in price with heavy volume which is a warning sign that the BIG MONEY is starting to roll out of that crowded trade (precious metals). The thing with tops is that they take a long time to form and become very choppy.

Since the November highs both silver and gold have more or less traded sideways. They never really went much higher and that’s because the big money is distributing their shares to smaller investors slowly overtime (retail buyers/average Joe’s). They try not to scare investors off so they sell their positions in chunks. What most people do now is that these sellers want higher highs to forming because once a new high has been created everyone become bullish again buying more on the breakout. It’s these waves of bullishness that the big money sells into which is why you see heavy volume after a new high has been formed.

Let’s take a look at some charts….

Silver Daily Chart

The silver chart clearly shows the bull market (markup phase) and also the distribution phase taking place now..... If things go according to plan then choppy/lower prices should take place in the coming 1-4 months.

Gold Daily Chart

Gold is doing the same thing as silver and we don’t think the selling is over yet.

Dollar Daily Chart

The past 12 months it seems like everything has been a dollar based play. Meaning if you were to pull up a 1 minute chart of the dollar and a 1 minute chart of the SP500 or Gold, you would now that when the dollar moves up stocks and commodities go down and vise-versa. That being said the SP500 has started to move up with the dollar in the past month so there is a shift happening but it’s a slow change and is not much of a concern for gold right now.

If the dollar starts another leg higher it will make for good timing as market sentiment is at an extreme and earning season is here. That typically means lower prices in stocks and commodities.

Mid-Week Silver, Gold and Dollar Trading Conclusion:

In short, in the next 1-4 weeks we are bullish on the dollar, and bearish/neutral on stocks and commodities. The reason we are neutral is because we don’t like to short things in a bull market phase as they can keep going up much longer than we think at times. Rather hold our strong positions and wait for a correction to buy/add once we feel the selling momentum has stopped later this year.

We would not be surprised if we get a 4-10% drop in the next few weeks in both stocks and commodities, but until we see a clear roll in price we will not be looking for any trades to the down side. We are not in a rush to pick a top/short the market but if we get a setup we will take a small position to play a falling market.

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Could The Over Printed U.S. Dollar Be The Market Leader? For Now, YES!

With so much good economic news coming out of the U.S. from a second straight month of job growth to reduced crude oil inventories, why does it seem a temporary top has been formed at 92.58? Answer is easy, strength in the U.S. Dollar. And that strength doesn't appear to be fading soon as the dollar was higher overnight extending it's trading range of the past five weeks. Stochastics and the RSI are turning bullish for the dollar signaling that sideways to higher prices are possible near term. Combine that with bubble talk in the gold trade and all the good news in the world won't support $100 oil.

The number one factor in determining sector rotation is "currency of choice". And these days the world markets only see three choices. The U.S Dollar, Gold and crude oil. Their choice this week is obvious, the U.S. Dollar. We still view the long term trend of dollar weakness to be in place but for now the dollar will bring misery to the crude oil bulls until more dire news can take it's place.

As we predicted yesterday our friends in Saudi Arabia took their first step in assuring $100 oil was not in the cards by lowering the prices of heavy crude exports to Asia. Forcing Iran to follow suit and making it even more difficult for Iran to show a profit on their heavy crude production.

So let's turn on the TV and watch the parade of fund managers turned TV stars on our favorite CNBS channels call for $100. We'll trade for today and we'll trade using these numbers.....


Crude oil was lower overnight as it consolidates some of Wednesday's rally. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term. If February extends this week's decline, the reaction low crossing at 87.43 is the next downside target. Closes above the 10 day moving average crossing at 90.74 would temper the near term bearish outlook. First resistance is the 10 day moving average crossing at 90.74. Second resistance is Monday's high crossing at 92.58. First support is Wednesday's low crossing at 88.10. Second support is the reaction low crossing at 87.43. Crude oil pivot point for Thursday morning is 89.75.

Natural gas was higher overnight as it consolidates some of Wednesday's decline. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term. If February extends the rally off December's low, the 50% retracement level of the June-October decline crossing at 4.876 is the next upside target. Closes below the 20 day moving average crossing at 4.325 would confirm that a short term top has been posted. First resistance is Tuesday's high crossing at 4.707. Second resistance is the 50% retracement level of the June-October decline crossing at 4.876. First support is Monday's gap crossing at 4.454. Second support is the 20 day moving average crossing at 4.325. Natural gas pivot point for Thursday morning is 4.520.

Gold was slightly higher due to short covering overnight as it consolidates some of this week's decline. However, stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term. If February extends this week's decline, the reaction low crossing at 1331.10 is the next downside target. Closes above the 10 day moving average crossing at 1395.90 would temper the near term bearish outlook. First resistance is the 10 day moving average crossing at 1395.90. Second resistance is Monday's high crossing at 1424.40. First support is the reaction low crossing at 1361.60. Second support is the reaction low crossing at 1331.10. Gold pivot point for Thursday morning is 1374.30.


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Lower Oil Prices.....Blame it on the Gasoline!

Well that didn't take long. Even in the face of better job estimates crude oil bulls have already begun to show their "nervousness" as they trade oil down as low as 88.10 in the overnight session. The lowest crude oil has traded since December 20th. And what do they blame it on? Blame it on the gasoline.

The street is saying that massive snow storms during the recent holiday week have caused a large drop in gasoline demand. MasterCard Inc., the second biggest payments network company, said in its SpendingPulse report that motorists bought an average 8.41 million barrels of gasoline a day in the week ended Dec. 31, down from 9.61 million the previous week.

This even with continued draw down in crude inventories is giving us an insight into where the tolerance level of the commodity traders is. The bulls are screaming "$100 oil is just not in the cards". And that just might be the case. Weather you believe the long term oil production capabilities claimed by the Saudis or not the effect they have on the market is real. And they have made no secret of the fact that they do not want $100 oil.

The Saudi's, saviors of the U.S. economy. Strange as it sounds it just might be true as they know better then anyone that we can't have it both ways. We can't have high gas prices and an expanding U.S. economy. And still our politicians in this country [U.S.] still do everything in their power to keep us from increasing our own oil production and weaning ourselves off of foreign oil. Just sell electric cars, that is the answer. While we do everything we can to limit the production and expansion of energy production and distribution.

Good thing we don't have to trade what will happen in the future, we can trade today! And here's the numbers we'll be using to do just that......

Crude oil was lower overnight as it extends Tuesday's decline below the 20 day moving average. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term. If February extends this week's decline, the reaction low crossing at 87.43 is the next downside target. Closes above the 10 day moving average crossing at 90.61 would temper the near term bearish outlook. First resistance is the 10 day moving average crossing at 90.61. Second resistance is Monday's high crossing at 92.58. First support is the overnight low crossing at 88.16. Second support is the reaction low crossing at 87.43. Crude oil pivot point for Wednesday morning is 89.94.

Natural gas was lower due to profit taking overnight as it consolidates some of the rally off December's low. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term. If February extends the aforementioned rally, the 50% retracement level of the June-October decline crossing at 4.876 is the next upside target. Closes below the 20 day moving average crossing at 4.334 would confirm that a short term top has been posted. First resistance is Tuesday's high crossing at 4.707. Second resistance is the 50% retracement level of the June-October decline crossing at 4.876. First support is Monday's gap crossing at 4.454. Second support is the 20 day moving average crossing at 4.334. Natural gas pivot point for Wednesday morning is 4.644.

Gold was slightly higher due to short covering overnight as it consolidates some of Tuesday's decline. However, stochastics and the RSI are overbought and are turning bearish signaling that sideways to lower prices are possible near term. Closes below the reaction low crossing at 1372.70 are needed to confirm that a short term top has been posted. Closes above the 10 day moving average crossing at 1397.80 would temper the near term bearish outlook. First resistance is the 10 day moving average crossing at 1397.80. Second resistance is Monday's high crossing at 1424.40. First support is the reaction low crossing at 1372.70. Second support is the reaction low crossing at 1361.60. Gold pivot point for Wednesday morning is 1390.50.


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