Dow Jones Commodity Index Fund Trading Opportunity

From guest analyst Chris Vermeulen of The Gold and Oil Guy.....

Dow Jones Commodity Index Fund
This index tracks the entire commodity market as a whole. Over the past two years we have seen commodities drop in value substantially. The good news is that we could be seeing prices rise going forward from here.

2009 has been a fantastic year for trading commodities with the market bottoming and starting to move higher. This commodity index clearly shows a Cup & Handle pattern and is looking ready to breakout in the coming weeks. The C & H pattern is the best chart formation we could get. Breakouts from these patterns generally provide a rally which can last months at a time.

Let’s take a look at what kind of opportunity looks to be just around the corner.

Dow Jones Commodity Index Chart – Weekly
Commodities appear to have bottomed and are getting squeezed into the apex of the bullish wedge. This index could easily rally to the 180 level which is about 35-40% Gain.


DJP iPath Commodity Index Fund – Weekly
After reviewing several different commodity index funds I like the characteristics for DJP the most. There is enough volume traded which makes for a smooth trading fund on an intraday basis when looking at the 10 minute chart. Several other funds were choppy and thinly traded.

This is Exciting, everyone knows how most commodity funds vary from the underlying commodity price, well this fund trades identical to the index. What does this mean? It means we can trade the DJP commodity index fund for short term and long term positions because there isn’t any price decay over time.


Performance Chart of Commodity Index & Fund
This chart goes back almost 2 years. As you can see the % change for the index and the fund are virtually identical. We do not need to worry about Contango with this fund.


Major Commodities Breaking Out or Bottoming
Gold, Crude Oil and Natural Gas are highly traded commodities and will play a large role in the direction of the commodity index.

Gold is breaking out to a new high – Bullish


Crude Oil is consolidating in a bullish wedge – Bullish



Natural Gas is trying to bottom and should move higher into the winter – Bullish



Dow Jones Commodity Index Trading Conclusion:
Money has been moving into the commodity sector since March of this year. As a technical trader this opportunity jumps out at me. I wanted to share it with fellow traders because this could be once of the easiest trades of the year if the index breaks out in the coming weeks.

If you would like to receive my Free Weekly Trading Newsletter please visit my website, The Gold and Oil Guy.

Chris Vermeulen

Let Me Introduce You to Adam Hewison of The MarketClub

From guest blogger Adam Hewison.....

My name is Adam Hewison. You might want to Google Me to confirm what I am about to share with you.

There are plenty of people out there that create “exclusive email courses” with little or no credentials to actually backup their teachings. So, I think it’s right that I share a little bit about myself with you before we even start.

I was a former floor trader on the IMM, IOM, NYFE and LIFFE as well as a risk manager of a large, multinational corporation in Geneva, Switzerland. I also have written books on forex trading and trend following. In 1995, I founded INO.com and later co founded MarketClub. I’ve been in the trading biz for over three decades and have seen it all. I created this course as a way to give back and share trading tips and techniques that I still use in my trading today.

In my Free Mini Email Course, I will show and explain the tools and strategies you need to increase your success rate in the marketplace.

(1) The importance of psychology in price movement

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(5) How to trade with moving averages

(6) How to use point and figure trading techniques

(7) How to use the RSI indicator

(8) How to correctly use stochastics in your trading

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President, INO.com & Co-Creator, MarketClub

Interior Boss Says No to Drilling on 8 Utah Parcels

Eight of the 77 oil and gas lease parcels sold during a December auction that a saboteur wrecked and a federal judge later halted will be off limits to drilling, Interior Secretary Ken Salazar has decided. Allowing development on the 7,670 public acres near Canyonlands and Arches national parks, Desolation Canyon and Nine Mile canyon could harm critical sage grouse habitat with little obvious benefit to oil and gas development, concluded a 39 page analysis released Thursday.

During a Washington news conference, Salazar said 52 parcels would be held back pending further study and 17 would be allowed back at upcoming auctions. Drawing from the report compiled by an 11 member team from the U.S. Bureau of Land Management, National Park Service and Forest Service who examined more than 103,000 acres from the ground up Salazar scolded the Bush administration for allowing the Dec. 19 auction in Salt Lake City to go forward.....read the entire article.

Phil Flynn: Global Warming Takes a Holiday!

Get the ear muffs out. Oil bears gets frosted as cold temperatures give the energy complex a Columbus Day boost. Global warming takes a holiday as heaters across the country seemed to go on much earlier than usual. Stunning records for cold were set across the nation increasing the demand for heating fuels over the weekend. The Chicago Marathon, according to the Chicago Tribune, had its coldest start since a 33 degree low in 2002 which they say was a far cry from 2007 when temperatures soared into the upper 80s and officials canceled the marathon after 3 1/2 hours into the event. In Denver it was reported that an artic cold front moved in and broke a cold temperature record that stood for 104 years.

In fact on Friday, Denver saw temperatures plunge 23 degrees in five hours setting the stage to make that record low. There were record lows in many parts of the country like Wyoming, Utah, Illinois and Iowa and if records were not broken in many areas it was extremely close. The early blast of winter is giving oil a bit of a boost on this lightly traded holiday market. It kind of makes you wonder what happened to global warming. In fact that is what the BBC is wondering in an article titled, "Whatever happened to Global Warming?" The BBC said, “This headline may come as a bit of a surprise, so too might that fact that the warmest year recorded globally was not in.....Read the entire article.

Crude Oil Higher as Net Long Positions Return to 2009 High

Crude oil was higher overnight as it extends the rally off September's low. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term. If November extends the rally, September's high crossing at 73.58 is the next upside target. Closes below the 20 day moving average crossing at 70.22 would temper the near term friendly outlook in the market.

Monday's pivot point, our line in the sand is 71.58

First resistance is the overnight high crossing at 73.13
Second resistance is September's high crossing at 73.58

First support is the 10 day moving average crossing at 70.54
Second support is the 20 day moving average crossing at 70.22

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Natural gas was higher due to short covering overnight as it consolidates some of last Friday's decline. Stochastics and the RSI are diverging and are neutral to bearish signaling that a short term top might be in or is near. Closes below the reaction low crossing at 4.351 would confirm that a short term top has been posted.

If November extends the rally off September's low, August's high crossing at 5.133 then the 50% retracement level of this year's decline crossing at 5.320 are the next upside targets.

Nat gas pivot point for Monday is 4.84

First resistance is last Tuesday's high crossing at 5.12
Second resistance is August's high crossing at 5.13

First support is last Friday's low crossing at 4.75
Second support is the 20 day moving average crossing at 4.74

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The U.S. Dollar was lower overnight as it consolidates some of last Friday's rally but remains above monthly support crossing at 75.73. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near term.

If December extends this month's decline, monthly support crossing at 73.39 is the next downside target. Closes above the reaction high crossing at 77.74 are needed to confirm that a short term low has been posted.

First resistance is the 10 day moving average crossing at 76.80
Second resistance is the reaction high crossing at 77.74

First support is last Thursday's low crossing at 75.68
Second support is monthly support crossing at 73.39

Crude Oil Weekly Technical Outlook

Crude oil edged higher last week but momentum is so far quite unconvincing. Nevertheless, further rise is still in favor as long as 68.16 support holds. Break of 73.16 resistance will confirm that fall from 75.0 has completed at 65.05 already. The corrective structure will in turn indicate that medium term rally is still in progress for another high above 75.0 before completion. On the downside, below 68.16 will suggest that rebound from 65.05 has completed and will flip intraday bias back to the downside.

In the bigger picture, medium term term outlook is quite mixed so far with crude oil still struggling around 55 weeks and 55 months EMA. The bearish case is still slightly in favor with 73.16 resistance intact. That is, medium term rebound from 44.2 has completed at 75.0 on bearish divergence conditions in daily MACD and RSI. Break of 65.05 support will solidify this case and target 58.32 cluster support (38.2% retracement of 33.2 to 75.0 at 59.03) for confirmation. However, break of 73.16 will in turn favor the case that rise from 33.2 is still in progress for another high above 75.0. Nevertheless, strong resistance should be seen in 76.77/90.24 fibonacci.....Entire article and charts!

Crude Oil Rises a Third Day on Recovery in Global Fuel Demand

Crude oil rose for a third day on speculation fuel demand will increase as the global economy emerges from recession. Oil climbed after U.S. equity markets reached their highest in a year Oct. 9, fanning hope for a recovery in world energy consumption. An Investors Business Daily survey due tomorrow in the U.S., the world’s largest energy user, may show consumers were optimistic for a third month, according to economists surveyed by Bloomberg News.

“We are looking at an international economy that is going to be stronger in 12 months’ time,” said David Moore, a commodity strategist at Commonwealth Bank of Australia Ltd. in Sydney. “There’s that conviction that things are going to be better down the track” even when some data is not “especially supportive,” he said. Crude oil for November delivery climbed as much as 79 cents, or 1.1 percent, to $72.56 a barrel in electronic trading on the New York Mercantile Exchange. It was at $72.23 at 9:26 a.m. Singapore time. Futures have gained 62 percent this year.....Read the entire article.

Invest AD Technical Analysis: Natural Gas May Climb to $7 Dollars

Natural gas may climb to $7 per million British thermal units after the commodity last month rebounded from a long term support level, according to Abu Dhabi-based Invest AD. Natural gas futures have almost doubled to $4.77 per million British thermal units since reaching a more than seven year low on Sept. 4. “Holding above a 20 year support and rebounding sharply from that level, signals an increase in demand for natural gas,” said Aksel Kibar, a portfolio manager at Invest AD, the investment firm owned by the Abu Dhabi Investment Council. “Any break above the $5.00-$5.50 range will push the prices toward the $6 to $7 area.”

Gas for November delivery fell 3.9 percent to $4.77 on the New York Mercantile Exchange Oct. 9. The fuel is down 15 percent this year, while crude oil is up 61 percent. “Natural gas underperformed crude oil in the last 10 years and in September the natural gas and crude oil ratio reached the lowest level in 20 years,” Kibar said. “This clearly shows an oversold condition for natural gas”.....read the entire article.

New Natural Gas ETF's on The Way

It's no surprise with the recent increase of interest in natural gas that we have more choices coming our way in the ETF arena. Jefferies is expanding their coverage of nat gas with two new funds, the Jefferies Natural Gas Equity ETF and the Jefferies Energy Wildcatters Equity ETF.

While UNG continues to be the most popular ticker, most commercial traders have focused on the FCG. And the Jefferies Natural Gas Equity ETF looks to be a direct competitor with the First Trust ISE Revere Natural Gas ETF.

The "Energy Wildcatters" ETF will focus on giving traders a way to trade a basket of small and mid cap companies in both the U.S. and Canada. All companies must have a market cap of between $200 million and $2 billion, and bring in at least 75% of their annual revenues from exploration and production of natural gas.

I for one love the nickname "wildcatters" for this fund. Let their be no mistake, this ETF does not follow the daily price of natural gas.

Here is the SEC filing for the Equity ETF and the SEC filing for the Wildcatters Fund.

Increased Natural Gas Pipeline Capacity in US Is Bad News for Canadian Natural Gas

A new natural gas pipeline in the United States is allowing cheap gas from the Rockies to displace more than 10% of Canada’s gas exports to the Midwest US, forcing more Canadian gas into storage and lowering natural gas prices for Canadian producers. The 1,679 mile, $4.4 billion Rockies Express pipeline, or REX, is providing about 1.5 billion cubic feet per day (bcf/d) of cheap gas from the Rockies through the Midwest to Ohio. The latest section of REX just opened June 29.

The new pipeline is displacing about 600 million cubic feet per day (mmcf/d) of Canadian production, says Jack Weixel, director of Energy Analysis for Bentek Energy. Bentek provides specialized energy pipeline information to clients in the oil and gas sector in North America. Weixel estimates the mid-continent corridor of pipelines send just over 5 bcf/d of gas, net, to the US from Canada (some western Canadian gas goes back into Southern Ontario via Michigan). “It has pushed off about 600 million cubic feet per day off the Northern Border Pipeline, which runs into Midwest pipelines at Ventura, Iowa,” Weixel told me over the phone from his Colorado office.....read the entire article.

Chevron Squeezes New Oil from One of World's Oldest Fields

Chevron Corp. is employing new technologies in hopes of extending the life of one of the world's oldest and most prolific oil fields, a process that is being replicated elsewhere to help the energy industry squeeze more out of aging oil basins. The Kern River field has produced more than 2 billion barrels of oil in its 110 year history, but Chevron estimates it still holds another 1.5 billion barrels.

Chevron is using the Kern River field as a real world laboratory, testing enhanced recovery techniques and bringing in engineers from around the world to learn them. "The thing about being in this old oil field," said Chevron engineer Joe Fram, "you can try stuff." To get as many of those barrels as possible out of the ground and do so cheaply enough to turn a profit Chevron is deploying high tech temperature sensors to monitor its production, using three dimensional computer models to plan its wells and filtering waste water from the fields through walnut shells so it can be re-used .....read the entire article.

The Dreaded Vote of Confidence

Oh no! The dreaded vote of confidence. You know in professional sports when your team is playing lousy and just put in a dismal performance and the owner of the team or the GM gives you a “vote of confidence” and you’re fired the next week? Well it is a good thing that the Treasury Secretary isn’t a baseball manager or he would be gone. After the dollar took another drubbing, the White House came out and said that Obama has "tremendous confidence" in Treasury Secretary Timothy Geithner right after the dollar hit an 18 month low.

Oh sure, the vote of confidence in question may not be in the US dollar but as the weakening dollar adds to inflation and increases the cost of oil and almost every commodity the average American buys, I would not feel too easy if I were Tim Geithner right now. The President has confidence in Mr. Geithner but do they have confidence in the dollar? The silence about the dollar out of the White House right now is deafening to the markets.....read the entire article.

Crude Oil Daily Technical Outlook

Crude oil edged higher to 72.55 but upside momentum remains unconvincing. Nevertheless, another rise is still mildly in favor with 68.16 support intact. Break of 73.16 will indicate that fall from 75.0 has completed at 65.05 already. The corrective structure will in turn indicate that medium term rally is still in progress for another high above 75.0 before completion. On the downside, below 68.16 will suggest that rebound from 65.05 has completed and will flip intraday bias back to the downside. Break of 65.05 will reaffirm the original bearish view that crude oil has topped out at 75.0 already and will bring fall resumption towards 58.32 key support next.

In the bigger picture, the lack of follow through selling so far dampens the bearish view that crude oil's medium term rise from 33.2 has completed at 75.0. Nevertheless, risk remains on the downside as long as 73.16 resistance holds. A break below 65.05 support will solidify the case the crude oil has topped out in medium term again. In such case, deeper fall should be seen to test on 58.32 cluster support (38.2% retracement of 33.2 to 75.0 at 59.03) first and break will target a retest of 33.2 low. However, a break of 75.0 will indicate that rise from 33.2 has resumed for 76.77/90.24 fibo resistance zone (38.2% and 50% retracement of 147.27 to 33.2) instead.....Here is the charts!

Oil Pares Weekly Gain as Bernanke Says Fed May Tighten Policy

Crude oil fell in New York, paring its weekly gain, as the dollar climbed after Federal Reserve Chairman Ben S. Bernanke said monetary policy may be tightened once the economic outlook has “improved sufficiently.” Oil traded near $71 a barrel as the U.S. currency rose against the yen and the euro, damping the investment appeal of commodities including gold. Prices rallied 3 percent yesterday after the dollar declined and the number of Americans filing for unemployment benefits dropped.

Bernanke’s remarks have had “a small impact on the immediate market,” said Ken Hasegawa, a commodity derivatives sales manager at broker Newedge in Tokyo. “It shows policy is not decided yet. The trend of the dollar will continue” to give direction to oil prices, he said. Crude oil for November delivery fell as much as 66 cents, or 0.9 percent, to $71.03 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $71.13 at 11:09 a.m. Singapore time. Yesterday, it rose $2.12 to settle at $71.69. Futures are poised.....Read the entire article.

Devaluation of the Dollar Spurs Oil Investment

"Oil had a couple of things going on today -- most notably, the dollar went through its low from September," explained Darin Newsom, senior analyst with DTN, a market information service in Omaha, Nebraska. "So we've got this pressure in the dollar, and that is sparking all kinds of buying interest in commodities." Investment in the commodity is increased when the value of the dollar falls because oil is traded in the greenback and investors holding other currencies are able to purchase oil at a cheaper price. "We saw the dollar coming under pressure today on the idea that maybe the economy is still going to sputter around here for a while as we go into the fourth quarter, early first quarter of next year," Newsom continued.

"Even though the Federal Reserve hinted that in 2010 we would start to see interest rates possibly start to go up, certainly there is no indication now that is going to happen any time soon; and again with the dollar moving to the new low, it would seem to confirm that idea that we're in this time where we're going to just hold low interest rates.....read the entire article

Crude Oil Bulls Take The Momentum Into Weeks End

Crude oil closed sharply higher on Thursday as it extends this week's rally. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term. The high range close sets the stage for a steady to higher opening on Friday.

If November extends this week's rally, September's high crossing at 73.58 is the next upside target. Closes below Monday's low crossing at 68.05 would temper the near term friendly outlook in the market.

First resistance is today's high crossing at 72.55
Second resistance is September's high crossing at 73.58

First support is Monday's low crossing at 68.05
Second support is September's low crossing at 65.05

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Natural gas closed higher on Thursday as it consolidates above the 10 day moving average crossing at 4.840. The mid range close sets the stage for a steady opening on Friday. Stochastics and the RSI are diverging but are turning neutral to bullish signaling that sideways to higher prices are possible near term.

If November extends the rally off September's low, August's high crossing at 5.133 is the next upside target. Closes below the 20 day moving average crossing at 4.672 are needed to confirm that a short term top has been posted.

First resistance is Tuesday's high crossing at 5.12
Second resistance the August's high crossing at 5.13

First support is the 10 day moving average crossing at 4.84
Second support is the 20 day moving average crossing at 4.67

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The U.S. Dollar posted a new low for the year on Thursday as it extends this year's decline. A short covering rally tempered early session losses and the mid range close sets the stage for a steady opening on Friday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term.

If December renews September's decline, monthly support crossing at 73.39 is the next downside target. Closes above the reaction high crossing at 77.73 would confirm that a short term low has been posted.

First resistance is the 20 day moving average crossing at 76.81
Second resistance is the 10 day moving average crossing at 76.93

First support is today's low crossing at 75.68
Second resistance is monthly support crossing at 73.39

Oil Rises to Two Week High as Jobless Claims Drop, Dollar Falls

Crude oil rose to a two week high as the number of Americans filing jobless claims dropped and the dollar declined, bolstering the appeal of commodities as an inflation hedge. Oil climbed as much as 4.3 percent as Labor Department data showed that initial applications for unemployment benefits fell to the lowest level since January. Gold increased to a record for a third day and other raw material prices gained as the U.S. currency declined to a two week low against the euro.

“Crude oil is tracking the behavior of other markets,” said Bill O’Grady, chief market strategist at Confluence Investment Management in St. Louis. “The jobs number was good. The recession is probably over and employment is a lagging indicator.” Crude oil for November delivery climbed $2.80, or 4 percent, to $72.37 a barrel at 12:38 p.m. on the New York Mercantile Exchange. Futures touched $72.55, the highest since Sept. 18. Oil has traded between.....read the entire article

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Crude Oil Daily Technical Outlook

Crude oil retreats sharply after rising to 7.197 and hit near term trend line resistance. With 4 hours MACD crossed below signal line, intraday outlook is turned neutral for the moment. Nevertheless, another rise is still mildly in favor with 68.16 support intact. Above 71.97 will bring rise resumption. Further break of 73.16 will indicate that fall from 75.0 has completed at 65.05 already. The corrective structure will in turn indicate that medium term rally is still in progress for another high above 75.0 before completion.

On the downside, below 68.16 will suggest that rebound from 65.05 has completed and will flip intraday bias back to the downside. Break of 65.05 will reaffirm the original bearish view that crude oil has topped out at 75.0 already and will bring fall resumption towards 58.32 key support next. In the bigger picture, the lack of follow through selling so far dampens the bearish view that crude oil's medium term rise from 33.2 has completed at 75.0.....read the entire article and charts!

Oil Rises as Dollar Declines, Crude Supplies Fall Unexpectedly

Oil rose in New York as the dollar weakened against the euro and a government report showed an unexpected drop in U.S. crude supplies, boosting optimism about a demand recovery in the biggest energy consuming nation. Oil pared yesterday’s 1.9 percent fall as the dollar declined toward a two-week low, increasing the appeal of commodities as an alternative investment. Prices were also supported by an Energy Department report that showed U.S. crude stockpiles fell 978,000 barrels last week amid a drop in imports. A 2 million barrel gain was forecast in a Bloomberg survey.

“The imports were down and that was a big surprise,” said Jonathan Koranfel, a director for Asia at options traders Hudson Capital Energy in Singapore. “Any more weakness in the dollar is limiting oil’s gains to a cap of about $72. The trading range in crude has gone from $65 to $75 to about $68 to $72. It’s just getting tighter and tighter.” Crude oil for November delivery gained as much as 83 cents, or 1.2 percent, to $70.40 a barrel in electronic trading on the New York Mercantile Exchange. It was at $70.18 at 12:55 p.m. Singapore time. Yesterday, the contract dropped $1.31 to settle at $69.57. Prices have gained 57 percent since the start of the year.....Read the entire article

Crude Oil Falls More Than $1 After U.S. Fuel Supplies Increase

Crude oil fell more than $1 a barrel after a U.S. Energy Department report showed that inventories of gasoline and distillate fuel increased. Gasoline supplies climbed 2.94 million barrels to 214.4 million last week, almost three times the gain forecast by analysts in a Bloomberg News survey. Stockpiles of distillates, which include heating oil and diesel, rose to the highest since January 1983. Oil also dropped as the rising dollar curbed the appeal of energy as an inflation hedge.

“This is a very bearish report,” said Tim Evans, an energy analyst with Citi Futures Perspective in New York. “The product builds are significant and increase the cushion against any disruption. It takes uncertainty about refiners out of the equation.” Crude oil for November delivery fell $1.31, or 1.9 percent, to $69.57 a barrel at 2:59 p.m. on the New York Mercantile Exchange, the lowest settlement since Sept. 29. Prices have gained 56 percent this year.....read the entire article

Great Spin on Oil Rumors and Short Trades

Dan Dicker expert trader says recent rumors that oil won't be priced in U.S. dollars are totally false but the news does provide three ways to make money.

Crude Oil Falls After Report Shows Gain in U.S. Fuel Supplies

Crude oil fell for the first time in three days in New York after a U.S. Energy Department report showed that inventories of gasoline and distillate fuel, a category that includes heating oil and diesel, increased. Gasoline supplies rose 2.94 million barrels to 214.4 million last week, almost three times the gain forecast by analysts in a Bloomberg News survey. Distillate stockpiles climbed 679,000 barrels to 171.8 million, the highest since January 1983. Oil fell earlier as the rising dollar reduced the appeal of energy to investors looking for an inflation hedge.

“This is a very bearish report,” said Tim Evans, an energy analyst with Citi Futures Perspective in New York. “The product builds are significant and increase the cushion against any disruption. It takes uncertainty about refiners out of the equation.” Crude oil for November delivery fell 61 cents, or 0.9 percent, to $70.27 a barrel at 11:46 a.m. on the New York Mercantile Exchange. Prices have climbed 58 percent this year. Futures have traded between $65.05 and $75 since Aug. 1. Oil traded at $71.42 before.....read the entire article.

Phil Flynn: It's so Funny How we Don't Talk Supply Anymore

It's so funny how we don't talk supply anymore.

It's so funny how we don't talk supply anymore. But I ain't losing sleep and I ain't counting sheep. Yet today we may be counting barrels. Yesterday it was about increasing interest rates in Australia and conspiracy theories against the dollar. Oh no!, they are plotting against the dollar! Run and hide! Run and hide in commodities. Today it may be back to good old supply and demand. The Energy Information Agency releases there weekly snapshot of supply and demand and now the market will focus on the old fashion fundamentals if only for a moment. And judging by Last night’s American Petroleum Institute’s version this report may raise a few eyebrows, especially when it comes to distillate supply

The API reported a stunning week over week supply drop in distillates of 2.9 million barrels. This was the main feature of the report and the main reason it will fall into the bullish category. Heating oil stocks fell by 892,000 barrels. The API also reported a small drop in crude oil supply to the tune of 254,000 barrels most of which came in Cushing, Oklahoma the Nymex delivery point. Gasoline stocks rose a modest 544,000 barrels. Despite the fact that supplies in every category are well above normal, if the EIA reports similar number this should feed into the bullish momentum that has engulfed.....Read the entire article.

Crude Oil Daily Technical Outlook

While intraday upside momentum in crude oil is not too convincing, further rise is still in favor with 68.16 minor support intact. Break of 73.16 will indicate that fall from 75.0 has completed at 65.05 already. The corrective structure will in turn indicate that medium term rally is still in progress for another high above 75.0 before completion. On the downside, below 68.16 will suggest that rebound from 65.05 has completed and will flip intraday bias back to the downside. Break of 65.05 will affirm the original bearish view that crude oil has topped out at 75.0 already and will bring fall resumption towards 58.32 key support next.

In the bigger picture, the lack of follow through selling so far dampens the bearish view that crude oil's medium term rise from 33.2 has completed at 75.0. Nevertheless, risk remains on the downside as long as 73.16 resistance holds. A break below 65.05 support will solidify the case the crude oil has topped out in medium term again. In such case, deeper fall should be seen to test on 58.32 cluster support (38.2% retracement of 33.2 to 75.0 at 59.03) first and break will target a retest of 33.2 low. However, a break of 75.0 will indicate that rise from 33.2 has resumed for 76.77/90.24 fibo resistance zone (38.2% and 50% retracement of 147.27 to 33.2) instead.....Here is the charts!

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In our previous gold video, we were right in terms of gold making a low around the first of October.

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Profits Taking Tempers Early Gains, as Traders Wait For Inventory Numbers

Crude oil closed higher on Tuesday renewing the rally off September's low. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term. Profit taking tempered early session gains as traders took a wait a see approach to the market ahead of Wednesday's weekly stocks report. The mid range close sets the stage for a steady opening on Wednesday.

If November extends today's rally, September's high crossing at 73.58 is the next upside target. Closes below Monday's low crossing at 68.05 would temper the near term friendly outlook in the market.

First resistance is today's high crossing at 71.97
Second resistance is September's high crossing at 73.58

First support is Monday's low crossing at 68.05
Second support is September's low crossing at 65.05

Can you learn to trade crude oil in just 90 seconds?

Natural gas closed lower due to profit taking on Tuesday as it consolidated some of Monday's gains. The low range close sets the stage for a steady to lower opening on Wednesday. Despite today's setback, stochastics and the RSI are turning neutral to bullish hinting that sideways to higher prices are possible near term.

If November extends the rally off September's low, August's high crossing at 5.133 is the next upside target. Closes below the 20 day moving average crossing at 4.585 are needed to confirm that a short term top has been posted.

First resistance is today's high crossing at 5.12
Second resistance the August's high crossing at 5.13

First support is the 20 day moving average crossing at 4.59
Second support is last Friday's low crossing at 4.35

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The U.S. Dollar closed lower on Tuesday and the low range close sets the stage for a steady to lower opening on Wednesday. The dollar pushed lower overnight after Australia pushed its interest rate one quarter percent higher, making it the first of the G 20 nations to do so. Downside momentum increased after a news report indicated that Gulf Arab states, China, Russia, Japan & France are secretly working on a plan to end dollar-based trading in the oil market. Oil would be traded on a basket of currencies that also includes gold.

The parties involved strongly deny the report, but speculation ran rampant, catching the fears and imagination of currency traders. Stochastics and the RSI are turning bearish signaling that sideways to lower prices are possible near term.

If December renews September's decline, monthly support crossing at 75.73 is the next downside target. If December renews the rally off September's low, September's high crossing at 79.29 is the next upside target.

First resistance is last Tuesday's high crossing at 77.73
Second resistance is September's high crossing at 79.29

First support is today's low crossing at 76.28
Second resistance is September's low crossing at 76.05

Barclays Technical Analysis: Oil’s Trend Line Key to $75

Crude oil futures may surpass this year’s $75 a barrel high if prices for the most active contract close above their 100 day moving average and a six month trend line, according to technical analysis by Barclays Capital.

November crude oil on the New York Mercantile Exchange has settled above its 100 day rolling mean each day for the past week. While this signals potential for gains, for prices to rally the contract must also close over a line connecting the lowest points between February and July, Barclays said.

“A close above these indicators would point to a push towards the high end of the range that’s held since the middle of June,” Barclays analyst MacNeil Curry said in a telephone interview from New York“.....Read the entire article.

Crude Oil Daily Technical Outlook

Crude oil's consolidation was contained above 68.10 and rise from 65.05 resumed by breaking 69.93 resistance. FUrther upside should be seen in near term to 73.16 resistance first. As discussed before, break there will indicate that fall from 75.0 has completed at 65.05 already. The corrective structure will in turn indicate that medium term rally is still in progress for another high above 75.0 before completion. On the downside, below 68.10 will suggest that rebound from 65.05 has completed and will flip intraday bias back to the downside. Break of 65.05 will affirm the original bearish view that crude oil has topped out at 75.0 already and will bring fall resumption towards 58.32 key support next.

In the bigger picture, the lack of follow through selling so far dampens the bearish view that crude oil's medium term rise from 33.2 has completed at 75.0. Nevertheless, risk remains on the downside as long as 73.16 resistance holds. A break below 65.05 support will solidify the case the crude oil has topped out in medium term again. In such case, deeper fall should be seen to test on 58.32 cluster support (38.2% retracement of 33.2 to 75.0 at 59.03) first and break will target a retest of 33.2 low. However, a break of 75.0 will indicate that rise from 33.2 has resumed for 76.77/90.24 fibo resistance zone (38.2% and 50% retracement of 147.27 to 33.2) instead.....Here is the charts!

Macroeconomic Forces Rescue Oil Prices Once Again

Maybe the economy isn't so bad after all. Thank you sir may I have another? Oil prices knocked for a loop after last Friday's jobs number came struggling back as the rest of the commodity complex brought the petroleum markets back kicking and screaming. A rebound in the non manufacturing number from the Institute for Supply Management took away some of the sting from last week's dismal jobs report. Oil tried to ignore the ISM non manufacturing number that showed that the service sector grew in September for the first time in a year, yet with all of the outside macroeconomic forces and commodities screaming higher in just about every other sector, it was not to be.

The index rose 50.9 percent from 48.4 percent in August giving us hope that perhaps there may be some energy demand after all. Now, throw in some rumors about the dollar's dominance and we saw oil fail to break the rock solid support at $68 a barrel and propel itself back into its endless trading range. Oil is moving lower but not in real terms but in dollar terms as nations are rumored to replace the dollar as its means of trade.....Read the entire article!

Oil Rises a Second Day as Weak Dollar Boosts Investment Appeal

Crude oil rose for a second day in New York as the dollar’s decline bolstered the appeal of commodities as a hedge against inflation. Crude traded near $71 a barrel as the dollar weakened following a report that Arab states held talks on replacing the U.S. currency in oil trades. Saudi Arabia’s central bank Governor Muhammad al-Jasser denied the report. Prices climbed yesterday after data showed U.S. service industries returned to growth following 11 months of contraction.

“The weaker dollar is always supportive for all commodities,” said Tobias Merath, a commodity analyst at Credit Suisse Group in Singapore. “We could see another couple of dollars upside for oil from the dollar, but it won’t be decisive. We’d need some change in the fundamentals to break out of this $68-to-$74 range.” Crude oil for November delivery rose as much as $1.22, or 1.7 percent, to $71.63 a barrel in electronic trading on the New York Mercantile Exchange. It was at $71.47 a barrel at 1:20 p.m. London time.....Read the entire article

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Crude Oil Higher, Bulls Take The Advantage Overnight

Crude oil was higher overnight as it extends last week's rally. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term. If November extends last week's rally, the reaction high crossing at 73.58 is the next upside target. Closes below Monday's low crossing at 68.05 would temper the near term friendly outlook in the market.

Tuesday's pivot point, our line in the sand is 69.75

First resistance is the overnight high crossing at 71.63.
Second resistance is the reaction high crossing at 73.58.

First support is the 10 day moving average crossing at 68.05.
Second support is the reaction low crossing at 65.05.

Can you learn to trade crude oil in just 90 seconds?

Natural gas was higher overnight as it extends the rally off September's low. Stochastics and the RSI are diverging but are turning neutral to bullish signaling that sideways to higher prices are possible near term.

If November extends the rally off September's low, August's high crossing at 5.133 then the 50% retracement level of this year's decline crossing at 5.320 are the next upside targets. Closes below last Friday's low crossing at 4.351 would confirm that a short term top has been posted.

Natural gas pivot point for Tuesday is 4.91

First resistance is the overnight high crossing at 5.08
Second resistance is August's high crossing at 5.13

First support is the 10 day moving average crossing at 4.84
Second support is the 20 day moving average crossing at 4.60

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The U.S. Dollar was lower overnight as it extends the decline off last week's high. Stochastics and the RSI are turning bearish signaling that sideways to lower prices are possible near term. If December extends the overnight decline, September's low crossing at 76.05 is the next downside target. Closes above last week's high crossing at 77.74 would confirm that a short term low has been posted.

First resistance is last Tuesday's high crossing at 77.74
Second resistance is September's high crossing at 79.29

First support is the overnight low crossing at 76.40
Second support is September's low crossing at 76.05

The Market Oracle: Betting on Commodities, Especially Crude Oil

In 2008, prices of oil, natural gas, gold, silver, copper, corn, wheat, and most other commodities reached multi-year, and in some cases multi-decade, highs. They’ve fallen sharply since then, but commodities aren’t going out of business. Another peak is coming, and it will be far higher, especially for oil. The price run up to 2008 came as a debt induced economic acceleration in the developed countries sucked in imports from the emerging economies of Asia. Virtually all the world was gobbling up commodities, but supplies were still choked by the preceding decades of underinvestment in mine development, processing plants, pipelines, railroads, and other elements of the industrial infrastructure needed for producing and transporting raw materials.

Faster consumption and static production capacity had an unsurprising effect prices rose. Then they rose some more and kept on rising. And in the later stages of the commodity price boom, investors, especially hedge funds, joined the bidding as a way to bet on a growing world economy. More bidders, more price push. But not forever. When the credit bubble that had been overstimulating just about every industry became unsustainable and financial markets everywhere collapsed, commodity prices collapsed along with them in anticipation.....read the entire article

Oil Trades Near $70 After Rising as Equities Gain, Dollar Falls

Crude oil traded little changed near $70 a barrel in New York after rising yesterday on optimism fuel demand will increase amid improved prospects for an economic recovery in the U.S., the biggest energy consumer.

Stocks climbed as a report from the Institute for Supply Management showed that U.S. service industries returned to growth after 11 months of contraction. Commodities also gained as the falling dollar bolstered the appeal of raw materials as a hedge against inflation.

“The major headline supporting the rally was the September ISM non manufacturing report showing positive growth,” said Mike Sander, an investment adviser at Sander Capital in Seattle. “Oil was pushed higher thanks to the 100 point move in the Dow Jones” Industrial Average, he said.....Read the entire article

Phil Flynn of PFG Best "Jobs Jab Oil Bulls"

Jobs losses are mounting and oil supplies are rising. It is time to face facts. Recent economic data is undermining the bull's oil case. Welcome to the jobless economic recovery that should reduce oil demand expectations even further as we look out into our future. Oil prices slid as our nation's unemployment reached a painful 9.8% and we lost 263,000 jobs. The oil bulls had better hope the dollar collapses if they are going to have any luck defending these lofty price levels. US supplies are staggering but even more so when you consider the weakened state of the jobs market. With the US being a consumer based economy, it does not bode well for a quick return to robust growth.....Read the entire article

Open Interest Surge Signals Peak as Traders See Slump

Investors are snapping up commodities at the fastest pace in 18 months just as stockpiles of raw materials rise and shipping rates plunge, signaling that prices may be poised to fall. Open interest, or contracts yet to be closed, liquidated or delivered, rose 6.6 percent in the third quarter for the 20 most traded U.S. commodities, exchange data compiled by Bloomberg show. That’s the steepest gain since the first three months of 2008, just before the credit market freeze sent prices plunging from records.

While the U.S. economy shows signs of bottoming after the deepest financial crisis since the Great Depression, supplies of raw materials are growing faster than demand. Oil inventories rose 15 percent in the past year, Energy Department figures show. The Baltic Dry Index, a barometer for raw material demand, slid 41 percent in the third quarter. Alcoa Inc., the largest U.S. aluminum company, will report an adjusted loss of 83 cents a share this year, based on the average estimate of analysts. “We’ve been moving out of our commodity holdings and into cash,” said Peter Sorrentino, who.....Read the entire article

Here is Some Potential Mega Trades For Q4

It seems to me that we are at an inflection point in the economy. The government has blown pretty much all of its money and the economic recovery and the economy is still sputtering along. No surprise there.

So what’s going to happen? We believe that we’ll have another economic downturn which is going to push the dollar to new lows, push gold to new highs, and push the equity markets back down to their March lows.

Yes, I know it’s a scary scenario but that’s what could potentially happen. We are just looking for one or two more pieces to fall into place and then we could see the unfolding of a very dramatic set of economic conditions here in the United States.

This new video looks at gold, the dollar, and the S&P 500. I believe if you’re interested in your economic future you need to watch this video.

Just Click Here to watch the video, and as always our videos are free to view and do not require any registration. If you think this is an important video, I strongly suggest you share with your friends and comment about it on our blog.

Crude Oil Trades Below $70 After Falling on Recovery Concern

Crude oil traded below $70 a barrel in New York after falling on concern that oil demand in the U.S., the biggest energy consuming nation, will be slow to rebound after the jobless rate increased. Oil prices dropped as much as 3.5 percent on Oct. 2 after the U.S. lost more jobs than estimated in September. Economist Nouriel Roubini, the New York University professor who predicted the financial crisis, said Oct. 3 that stock and commodity markets may drop in coming months as the gradual pace of the economic recovery disappoints investors.

“There was weak data coming out of the U.S. and equity markets were weaker,” Mark Pervan, senior commodity strategist at ANZ Banking Group Ltd. in Melbourne, said by phone today. “It’s all pointing downwards.” Crude oil for November delivery traded at $69.88 a barrel, down 7 cents, in electronic trading on the New York Mercantile Exchange at 10 a.m. Singapore time.....Read the entire article

Commodities Consolidate as Economic Outlook is Mixed

Crude oil price plunged to as low as 68.32 Friday as the US Labor Department reported disappointing employment data for September. Investors worried the pace of economic recovery will be delayed and thus took profits from long positions in oil. Although buying interest emerged afterward, WTI crude oil settled -1.2% at 69.95 during the day. On weekly basis, the benchmark contract gained +6%. After plummeting to the lower end of recent trading range of 65-75, oil price recovered in the middle of the week although the US Energy Department reported larger than expected crude builds in the week ended September 25.

Investors used the surprising draw in gasoline stockpile, lower than expected rise in distillate stockpiles and rise in fuel demand as reasons to bid up prices. However, we retain out views that crude oil price will continue move range bounded in coming weeks and occasional rise in demand does not alter the fact that fuel consumptions remain in depressed levels. Gasoline demand rose to 9.126M bpd last week, representing increases of +3.8% on weekly basis and +4.5% on annual basis. However, Exxon's CEO said that gasoline demand has already peaked in 2007 and will decline into the futures. In the US, oil product demand was 20M bpd in 2007 and should fall to about 17M bpd by 2020.....Read the entire article and charts!

So You Think It's Time to Buy UNG? Let's go to The Chart!

In all of my years of trading I have never seen so much attention given to natural gas by the retail investor. Nat gas has been trading at historic low prices recently so it must be ready to skyrocket, right? Well for you traders out there that like me are old enough to remember the sugar market of many years ago, you have to admit natural gas and especially UNG is starting to show some similarities.

So where is UNG headed? Let's see what our MarketClub tools tell us....

UNG Smart Scan Chart Analysis is showing a downtrend with Up arrow, meaning there is some near term rallying power. However, this market remains in the confines of a longer term downtrend Downtrend, trade with tight money management stops.

Based on a pre-defined weighted trend formula for chart analysis, UNG scored -75 on a scale from -100 (strong downtrend) to +100 (strong uptrend):

-10.....Last Hour Close Below 5 hour Moving Average
-15.....New 3 Day Low on Thursday
-20.....Last Price Below 20 Day Moving Average
+25.....New 3 Week High, Week Ending October 3rd
-30.....New 3 Month Low in September
-75.....Total Score



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How to Invest in Oil & Gas Stocks

Investing in oil and gas stocks is actually quite simple, even if you don’t know anything about the energy industry. (My friends in Calgary would say I am living proof of that.)

From my experience in speaking with management teams and reading research reports, I’ve put together a basic information list for retail investors doing initial research into oil & gas companies. It’s not exhaustive, but the answers should provide the basic information to decide if you want to do more due diligence.

Either call management, or go to the company’s website and look at its corporate presentation. The Top 10 bits of information I want to find out initially is:

1. How many barrels of oil per day (bopd, or “boe” for natural gas – barrels of oil equivalent) is the company producing, and how quickly have they grown production in each of the last 3 quarters.
2. How much of their production is oil and how much is natural gas (gas prices are very low right now and doesn’t produce much if any cash flow for companies)
3. How much net cash or net debt do they have? This industry uses a lot of debt, so if a company actually has net cash, they could grow more quickly because they have an entire untapped line of credit waiting to go drilling, and grow the business. And of course no debt means no debt payments and flexibility in doing business......Read the entire article

Just Click Here to visit Keith Schaefer's Oil & Gas Investments Bulletin