One of our favorite people to follow in the commodities sector is Carley Garner. You may know her best as the author of "A Trader's First Book on Commodities".
Well she has set us up a nice trade over the next 4 to 6 weeks, watch it here as Jim Cramer lays out the numbers and the trade. Carley tells us, "If you are interested in bullish strategies in natural gas, you will likely be better served waiting for more favorable entry levels".
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Tuesday, January 15, 2013
Statoil Leads the way in Norway Energy Auction
Shell (RDS.A) and Total (TOT) received the most operatorships among non Norwegian firms, with four each; they received five and eight licenses, respectively. XOM, CVX and COP also picked off a few licenses.
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Learn from the Master...."Live Options Strategy Webinar"
This Thursday, John Carter from "Trade The Markets" is conducting a free "Live Options Strategy Webinar"
John's agreed to teach YOU the strategies he plans on using in 2013...no matter what size your account or level of activity.
Here are the details:
Date: Thursday, January 17th Time: 8:00pm Eastern Time (New York Time)
Click Here To Register
In this webinar John will show you ...
... His 3 favorite options trading strategies,
... How to find high probability trades,
... How to manage options trades,
... His trading rules for doubling his $500,000 account ......and more.
So mark your calendar for Thursday night, January 17th at 8:00pm Eastern Time (New York Time).
Click Here To Register Now
John's agreed to teach YOU the strategies he plans on using in 2013...no matter what size your account or level of activity.
Here are the details:
Date: Thursday, January 17th Time: 8:00pm Eastern Time (New York Time)
Click Here To Register
In this webinar John will show you ...
... His 3 favorite options trading strategies,
... How to find high probability trades,
... How to manage options trades,
... His trading rules for doubling his $500,000 account ......and more.
So mark your calendar for Thursday night, January 17th at 8:00pm Eastern Time (New York Time).
Click Here To Register Now
The Technical Traders Morning Charts
Yesterday’s trading session played out exactly as posted in the morning chart update. Today will be a different story from the looks of it as the dollar index looks to be putting in a bottom and that has the SP500 down 0.40% this morning. It may trigger our first entry point to let long stocks today.
Crude oil has been trading sideways/higher the past week but the on balance volume clearly shows sellers are unloading contracts at the $94 level. Yesterday we talked about how crude oil was walking a fine line up its support trend line and once that breaks look out! Price is holding up but be aware it could drop fast and hard any day here....Check out all of this mornings charts for the U.S. Dollar, crude oil, natural gas, SP 500 futures, gold, silver and bonds.
The Technical Traders Morning Charts
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Crude oil has been trading sideways/higher the past week but the on balance volume clearly shows sellers are unloading contracts at the $94 level. Yesterday we talked about how crude oil was walking a fine line up its support trend line and once that breaks look out! Price is holding up but be aware it could drop fast and hard any day here....Check out all of this mornings charts for the U.S. Dollar, crude oil, natural gas, SP 500 futures, gold, silver and bonds.
The Technical Traders Morning Charts
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Monday, January 14, 2013
Trends & Trading Signals: Gold, Miners, Crude Oil and the SP500
Gold and gold miner stocks have underperformed in 2012 disappointing most traders. That being said it has traded in a large sideways range since September 2011 and remains stuck in this range as of this week. Investments trading sideways are not my preferred investment of choice because some commodities and stocks for that matter can trade sideways for years before making another bull market rally.
That being said in the last six months gold has started to show life that a new bull market may be starting. 2013 is starting to look as though gold, silver and precious metals miners could lead the market higher if they can break out of their basing patterns. Until we get more bullish price action I am not planning to get long.
Let's take a look at the gold ETF and Gold Miner charts
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That being said in the last six months gold has started to show life that a new bull market may be starting. 2013 is starting to look as though gold, silver and precious metals miners could lead the market higher if they can break out of their basing patterns. Until we get more bullish price action I am not planning to get long.
Let's take a look at the gold ETF and Gold Miner charts
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Sunday, January 13, 2013
Icahn Seeking Approval to Acquire Voting Securities in Transocean RIG
Additionally, pursuant to the Hart-Scott-Rodino Antitrust Improvements Act, Mr. Icahn has notified Transocean that Icahn is seeking approval to potentially acquire voting securities of Transocean in an amount exceeding the $682.1 million Hart-Scott-Rodino threshold, but less than that Act's threshold of 25% of the outstanding voting securities, depending upon various factors.
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Saturday, January 12, 2013
Halliburton Uses Clean Burning Natural Gas to Power a Fracturing Fleet
Halliburton (NYSE: HAL), Apache Corporation and Caterpillar have developed innovative dual fuel technology capable of safely and efficiently powering the pumping equipment used for fracturing treatments with a mixture of natural gas and diesel. With 12 pumps (24,000 horsepower), this is one of the largest scale dual fuel projects ever conducted in the oil and gas industry.
G. Steven Farris, Chairman and CEO of Apache and the Chairman of America’s Natural Gas Alliance (ANGA), encouraged Apache and the industry to increase the use of natural gas as a fuel for engines. In response, Halliburton developed a technical solution for converting the pumping equipment used at a typical large scale fracturing spread to a dual fuel system including natural gas. One that would be more efficient and cleaner burning than using diesel alone.
Halliburton and its supplier, Caterpillar, teamed up to convert the company’s new Q-10 pumps to dual fuel with a technology that would safely and efficiently accommodate high quality liquefied or compressed natural gas. Collaborating closely with Halliburton and Apache to cover a wide range of performance, environmental and efficiency criteria, Caterpillar adapted its proprietary Dynamic Gas Blending (DGB) engine technology to power Halliburton’s massive pumps.
“We anticipate that in the not so distant future, these DGB engines can be easily retrofitted to efficiently burn available on site conditioned field gas, thereby saving operators additional fuel transport costs,” said Marc Edwards, Senior Vice President of Halliburton’s Completion and Production Division.
Read the entire article at Halliburton.com
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Crude Oil, Natural Gas and Gold Weekly Technical Outlook for January 12th
It's that time of the week when we check in with the great staff at Oil N'Gold.com. Can crude oil stay in a bullish pattern? Let's see how ONG will be trading crude oil, natural gas and gold this week.....
Crude oil rose further to as as high as 94.70 last week and and breached 61.8% retracement of 100.42 to 84.05 at 94.17 before retreating mildly. Near term outlook stays bullish as long as 91.52 minor support holds. Sustained trading above 94.17 will pave the way for a retest on 100.42 key resistance level. However, note bearish divergence condition in 4 hours MACD. Break of 91.52 will argue that a short term top is formed and bring pull back to 90 psychological level and below.
In the bigger picture, price actions from 114.83 are viewed as a triangle consolidation pattern, no change in this view. Fall from 100.42 is likely the fifth and the last leg of such consolidation. Having said that, downside should be contained above 77.28 and bring an upside breakout eventually. Break of 100.42 resistance will strongly suggest that whole rebound from 33.29 has resumed for above 114.83.
In the long term picture, crude oil is in a long term consolidation pattern from 147.27, with first wave completed at 33.2. The corrective structure of the rise from 33.2 indicates that it's second wave of the consolidation pattern. While it could make another high above 114.83, we'd anticipate strong resistance ahead of 147.24 to bring reversal for the third leg of the consolidation pattern.
Nymex Crude Oil Continuous Contract 4 Hour, Daily, Weekly and Monthly Charts
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Natural gas attempted to resume recent fall last week but was contained above 3.05 support and recovered again. Initial bias remains neutral this week as consolidation from 3.05 might extend further. But overall outlook remains unchanged. Considering that it's limited by medium term falling trend line, whole rally from 1.902 might be finished at 3.93 already. Near term outlook will stay bearish as long as 3.507 resistance holds. Current decline should target 61.8% retracement of 1.902 to 3.933 at 2.678 on break of 3.05.
In the bigger picture, the bounce off from the long term falling channel resistance for 6.108 retained the case that such decline isn't finished. Break of 2.575 support should make a new low below 1.902 to extend the whole long term down trend. Nonetheless, strong rebound from 2.575, followed by break of 3.933 resistance, will revive that case of long term reversal and target a test on 4.983 key resistance.
Nymex Natural Gas Continuous Contract 4 Hour, Daily, Weekly and Monthly Charts
Gold's recovery from 1626 extended further last week as consolidation continued. But with 1695.4 resistance holds, deeper fall is still expected. Below 1626 will extend the whole decline from 1798.1 to 1478.3/1577.4 support zone. On the upside, though, break of 1695.4 will indicate reversal and bring stronger rebound back to 1755.0 resistance and above.
In the bigger picture, price actions from 1923.7 high are viewed as a medium term consolidation pattern. There is no indication that such consolidation is finished, and more range trading could be seen. In any case, downside of any falling leg should be contained by 1478.3/1577.4 support zone and bring rebound. Meanwhile, break of 1792.7/1804.4 resistance zone will argue that the long term up trend is possibly resuming for a new high above 1923.7.
In the long term picture, with 1478.3 support intact, there is no change in the long term bullish outlook in gold. While some more medium term consolidation cannot be ruled out, we'd anticipate an eventual break of 2000 psychological level in the long run.
Comex Gold Continuous Contract 4 Hour, Daily, Weekly and Monthly Charts
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Crude oil rose further to as as high as 94.70 last week and and breached 61.8% retracement of 100.42 to 84.05 at 94.17 before retreating mildly. Near term outlook stays bullish as long as 91.52 minor support holds. Sustained trading above 94.17 will pave the way for a retest on 100.42 key resistance level. However, note bearish divergence condition in 4 hours MACD. Break of 91.52 will argue that a short term top is formed and bring pull back to 90 psychological level and below.
In the bigger picture, price actions from 114.83 are viewed as a triangle consolidation pattern, no change in this view. Fall from 100.42 is likely the fifth and the last leg of such consolidation. Having said that, downside should be contained above 77.28 and bring an upside breakout eventually. Break of 100.42 resistance will strongly suggest that whole rebound from 33.29 has resumed for above 114.83.
In the long term picture, crude oil is in a long term consolidation pattern from 147.27, with first wave completed at 33.2. The corrective structure of the rise from 33.2 indicates that it's second wave of the consolidation pattern. While it could make another high above 114.83, we'd anticipate strong resistance ahead of 147.24 to bring reversal for the third leg of the consolidation pattern.
Nymex Crude Oil Continuous Contract 4 Hour, Daily, Weekly and Monthly Charts
Get our Free Trading Videos, Lessons and eBook today!
Natural gas attempted to resume recent fall last week but was contained above 3.05 support and recovered again. Initial bias remains neutral this week as consolidation from 3.05 might extend further. But overall outlook remains unchanged. Considering that it's limited by medium term falling trend line, whole rally from 1.902 might be finished at 3.93 already. Near term outlook will stay bearish as long as 3.507 resistance holds. Current decline should target 61.8% retracement of 1.902 to 3.933 at 2.678 on break of 3.05.
In the bigger picture, the bounce off from the long term falling channel resistance for 6.108 retained the case that such decline isn't finished. Break of 2.575 support should make a new low below 1.902 to extend the whole long term down trend. Nonetheless, strong rebound from 2.575, followed by break of 3.933 resistance, will revive that case of long term reversal and target a test on 4.983 key resistance.
Nymex Natural Gas Continuous Contract 4 Hour, Daily, Weekly and Monthly Charts
Gold's recovery from 1626 extended further last week as consolidation continued. But with 1695.4 resistance holds, deeper fall is still expected. Below 1626 will extend the whole decline from 1798.1 to 1478.3/1577.4 support zone. On the upside, though, break of 1695.4 will indicate reversal and bring stronger rebound back to 1755.0 resistance and above.
In the bigger picture, price actions from 1923.7 high are viewed as a medium term consolidation pattern. There is no indication that such consolidation is finished, and more range trading could be seen. In any case, downside of any falling leg should be contained by 1478.3/1577.4 support zone and bring rebound. Meanwhile, break of 1792.7/1804.4 resistance zone will argue that the long term up trend is possibly resuming for a new high above 1923.7.
In the long term picture, with 1478.3 support intact, there is no change in the long term bullish outlook in gold. While some more medium term consolidation cannot be ruled out, we'd anticipate an eventual break of 2000 psychological level in the long run.
Comex Gold Continuous Contract 4 Hour, Daily, Weekly and Monthly Charts
Check out John Carters new free video series "Options Trading Strategies"
Trading Strategies are the Key to Success
In this video John Carter lays out some of his exact trades, and detailed trade strategies on some of his favorite trades.
Watch the video and watch him make some big trades, and he'll show you how YOU can do the same.
Normally these videos are for members only, but as a reader at The Crude Oil Trader John has agreed to make this video available to you, no strings attached.
Just click here to enjoy the video!
Ray C. Parrish
President/CEO
The Crude Oil Trader
Thursday, January 10, 2013
EIA: Average 2012 Crude Oil Prices Remain Near 2011 Levels
Average crude oil prices in 2012 were at historically high levels for the second year in a row. Brent crude oil averaged $111.67 per barrel, slightly above the 2011 average of $111.26. West Texas Intermediate oil averaged $94.05 per barrel in 2012, down slightly from $94.88 in 2011.
The differential between Brent and WTI spot prices historically was just a few dollars per barrel in either direction. In 2011, the Brent premium over WTI averaged $16.38 per barrel; however, in 2012 this premium widened to $17.61 per barrel.
The significant events in 2012 include:
* U.S. crude oil production rose by an estimated 780,000 barrels per day (bbl/d) in 2012, the largest yearly increase to date.
* The surge in crude oil production led to crude oil stocks held in land-locked Cushing, Oklahoma, which is a major pricing point for crude oil, that resulted in record-high end of month stock levels from April through December.
* The United States remained a significant net oil importer when levels of crude oil and petroleum products are added together.
* After Brent fell below $90/bbl in late June and WTI dropped below $80/bbl, prices rebounded in July on expectations that policymakers in the United States, Europe, and China would take action to stimulate economic growth, which could increase oil demand. * Disruptions in oil production in South Sudan, Yemen, Syria, and the North Sea reduced available global supplies, putting upward pressure on oil prices.
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The differential between Brent and WTI spot prices historically was just a few dollars per barrel in either direction. In 2011, the Brent premium over WTI averaged $16.38 per barrel; however, in 2012 this premium widened to $17.61 per barrel.
The significant events in 2012 include:
* U.S. crude oil production rose by an estimated 780,000 barrels per day (bbl/d) in 2012, the largest yearly increase to date.
* The surge in crude oil production led to crude oil stocks held in land-locked Cushing, Oklahoma, which is a major pricing point for crude oil, that resulted in record-high end of month stock levels from April through December.
* The United States remained a significant net oil importer when levels of crude oil and petroleum products are added together.
* After Brent fell below $90/bbl in late June and WTI dropped below $80/bbl, prices rebounded in July on expectations that policymakers in the United States, Europe, and China would take action to stimulate economic growth, which could increase oil demand. * Disruptions in oil production in South Sudan, Yemen, Syria, and the North Sea reduced available global supplies, putting upward pressure on oil prices.
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Wednesday, January 9, 2013
Taking Advantage of Recent Lows in the Volatility Index
With the VIX sinking there is nobody better to guide us through a trade on the VIX then todays contributor, COT staffer J.W. Jones.....
One of the newest option products to appear in our universe as an options trader is the option series designed to trade the volatility index (VIX). The VIX is a measurement of the implied volatility of the S&P 500 index.
To review quickly, the implied volatility of an options series is reflective of the aggregate market opinion of the future volatility of a given underlying asset. In terms of the Volatility Index, the price is the current market opinion of the future volatility in the S&P 500 Index over the next 12 months.
As are all attempts to predict the future, this value does not always reflect accurately the actual volatility as it plays out prospectively, but at a practical level it is the best we can do. As sage philosophers have long noted, “the future isn’t what it used to be.”
The importance for traders is the well established and generally known inverse correlation between prices for the given underlying and the measure of implied volatility, in this case our VIX value. What is typically less known is the fact that levels of implied volatility correlate even more closely to the velocity of the price move of the underlying asset in question.......Read J.W.'s entire article and check out the charts
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One of the newest option products to appear in our universe as an options trader is the option series designed to trade the volatility index (VIX). The VIX is a measurement of the implied volatility of the S&P 500 index.
To review quickly, the implied volatility of an options series is reflective of the aggregate market opinion of the future volatility of a given underlying asset. In terms of the Volatility Index, the price is the current market opinion of the future volatility in the S&P 500 Index over the next 12 months.
As are all attempts to predict the future, this value does not always reflect accurately the actual volatility as it plays out prospectively, but at a practical level it is the best we can do. As sage philosophers have long noted, “the future isn’t what it used to be.”
The importance for traders is the well established and generally known inverse correlation between prices for the given underlying and the measure of implied volatility, in this case our VIX value. What is typically less known is the fact that levels of implied volatility correlate even more closely to the velocity of the price move of the underlying asset in question.......Read J.W.'s entire article and check out the charts
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Baker Hughes Announces December 2012 Rig Counts
The average U.S. rig count for December 2012 was 1,784, down 25 from the 1,809 counted in November 2012 and down 219 from the 2,003 counted in December 2011. The average Canadian rig count for December 2012 was 353, down 31 from the 384 counted in November 2012 and down 76 from the 429 counted in December 2011.
The worldwide rig count for December 2012 was 3,390, down 70 from the 3,460 counted in November 2012 and down 222 from the 3,612 counted in December 2011.
Here is the Baker Hughes official release and charts
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Monday, January 7, 2013
EIA Video: Cumulative Natural Gas Wells Drilled in Pennsylvania
Between 2009 and 2011, Pennsylvania's natural gas production more than quadrupled due to expanded horizontal drilling combined with hydraulic fracturing. This drilling activity, which is concentrated in shale formations that cover a broad swath of the state, mirrors trends seen in the Barnett shale formation in Texas.
The animation illustrates Pennsylvania's relatively recent transition from conventional vertical wells (black diamonds) to horizontal wells (red diamonds), drilled mostly in sections of the Marcellus, Utica, and Geneseo/Burket shale formations located in the northeast and southwest portions of the state. The animation also shows that as horizontal drilling increased, the number of vertical wells [which are typically less productive] fell, resulting in an overall decline in the state's new well count.
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The animation illustrates Pennsylvania's relatively recent transition from conventional vertical wells (black diamonds) to horizontal wells (red diamonds), drilled mostly in sections of the Marcellus, Utica, and Geneseo/Burket shale formations located in the northeast and southwest portions of the state. The animation also shows that as horizontal drilling increased, the number of vertical wells [which are typically less productive] fell, resulting in an overall decline in the state's new well count.
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Saturday, January 5, 2013
A Technical Update on the Mini Crash in GOLD
If you follow one trader for gold trades make it COT staffer David Banister. Today David shows us what he sees "in the waves"......
Let’s make one thing clear; nobody I know including myself predicted that Gold would drop from 1690 to 1625 inside of 48 hours this week. That was not in the charts and so I won’t even pretend I was going to see that train coming through the tunnel.
With that said, let’s try to let the dust settle but take a look objectively at some possibilities.
1. We all know that some FOMC minutes released did in fact cause some major downside in GOLD based on potential for eventual end to QE in the US down the road. It did cause stops to trigger, probably some margin calls, and then more stops creating a mini crash of near 4% on the Metal.
2. The ABC pattern appeared to be completed at 1634 last week, especially when we rallied over 1681 pivot. A brief dip to 1625 spot took place this morning early, and we now trade again around the 1631 pivot.
What are the technical options?
Well if we stick with traditional Elliott Wave Theory, we can see a potential 3-3-5 pattern still unfolding and wave 5 of C is now in play. 3-3-5 patterns have 3 waves down, 3 up, then 5 down to complete the entire ABC Structure.
To confirm this, we will want to see GOLD bottom here fairly soon in wave 5 of C.
Below is the updated chart of GLD ETF showing you this pattern. It’s the best I can do right now. I will keep you updated as things unfold. To be sure, I count this as cycle year 13 in the Gold bull market and I had Gold peaking in June of 2013 at 2280-2400 ranges per ounce, but we will have to see now if that is still valid or not based on whether this C wave can hold and reverse hard soon.
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Let’s make one thing clear; nobody I know including myself predicted that Gold would drop from 1690 to 1625 inside of 48 hours this week. That was not in the charts and so I won’t even pretend I was going to see that train coming through the tunnel.
With that said, let’s try to let the dust settle but take a look objectively at some possibilities.
1. We all know that some FOMC minutes released did in fact cause some major downside in GOLD based on potential for eventual end to QE in the US down the road. It did cause stops to trigger, probably some margin calls, and then more stops creating a mini crash of near 4% on the Metal.
2. The ABC pattern appeared to be completed at 1634 last week, especially when we rallied over 1681 pivot. A brief dip to 1625 spot took place this morning early, and we now trade again around the 1631 pivot.
What are the technical options?
Well if we stick with traditional Elliott Wave Theory, we can see a potential 3-3-5 pattern still unfolding and wave 5 of C is now in play. 3-3-5 patterns have 3 waves down, 3 up, then 5 down to complete the entire ABC Structure.
To confirm this, we will want to see GOLD bottom here fairly soon in wave 5 of C.
Below is the updated chart of GLD ETF showing you this pattern. It’s the best I can do right now. I will keep you updated as things unfold. To be sure, I count this as cycle year 13 in the Gold bull market and I had Gold peaking in June of 2013 at 2280-2400 ranges per ounce, but we will have to see now if that is still valid or not based on whether this C wave can hold and reverse hard soon.
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Check out our free video series "Simpler Options Trading Strategies"
Friday, January 4, 2013
Why the 1470-1474 area on the SP 500 is extremely important for Bulls
The SP 500 has been in a potential 5 wave rally going all the way back to October 2011 lows of 1074. This type of 5 wave rally is common in a Bull Market, but must be watched closely as it could also signal another large correction just around the corner from current 1464 levels on the SP 500 Index. Once you complete a 5 wave bullish pattern, there is commonly a 3 wave corrective decline, therefore determining where those key pivot points are is crucial for market watchers.
If we take a look at the length of the 5 waves in the Rising Wedge pattern from the October 2011 lows of 1074 below, and compare them with other waves 2-5, we can see several fibonacci fractal relationships amongst all of them. This is one of the clues I look for when trying to analyze pivot points and knowing at least what I should be watching for further clues.
In most cases, wave 3 is commonly the largest of a 5 wave structure, but that does not preclude wave 1 from being the largest in the series. To wit, recall the nasty decline into October 2011 that spurred the next big market advance of about 350 points off the bottom. When you have a significant decline preceeding the early stages of a 5 wave advance, often the first wave in the pattern is in fact the largest, which may be the case here.
Let’s take a look at a possible 5 wave count just so we know what to be aware of :
Wave 1: That 350 point advance was a possible wave 1 off the 1074 lows of Oct 2011.
Wave 2: managed to retrace 155 points of that advance into June 2012, a common wave 2.
Wave 3: rallied to the 1474 pivot, which was a 207 point rally. 207 points is about 61% fibonacci relationship to wave 1′s 350 point advance, again another clue.
Wave 4: dropped as we know from 1474-1344, or 130 points. 130 points is also about 61% of Wave 3′s prior advance on the downside.
Wave 5: Theoretically this wave 5 is now from 1343, and if we took 61% of wave 3 advance and add it to 1343, we come up with about 1470.
1470 would then be a double top in the market, stop wave 5 in its tracks… and be followed by a large correction.
So with the above in mind, we advise watching 1470-74 with keen interest as the market will want to take this area out with authority to continue the intermediate bull run. If not, we could be in for some downside trouble…
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If we take a look at the length of the 5 waves in the Rising Wedge pattern from the October 2011 lows of 1074 below, and compare them with other waves 2-5, we can see several fibonacci fractal relationships amongst all of them. This is one of the clues I look for when trying to analyze pivot points and knowing at least what I should be watching for further clues.
In most cases, wave 3 is commonly the largest of a 5 wave structure, but that does not preclude wave 1 from being the largest in the series. To wit, recall the nasty decline into October 2011 that spurred the next big market advance of about 350 points off the bottom. When you have a significant decline preceeding the early stages of a 5 wave advance, often the first wave in the pattern is in fact the largest, which may be the case here.
Let’s take a look at a possible 5 wave count just so we know what to be aware of :
Wave 1: That 350 point advance was a possible wave 1 off the 1074 lows of Oct 2011.
Wave 2: managed to retrace 155 points of that advance into June 2012, a common wave 2.
Wave 3: rallied to the 1474 pivot, which was a 207 point rally. 207 points is about 61% fibonacci relationship to wave 1′s 350 point advance, again another clue.
Wave 4: dropped as we know from 1474-1344, or 130 points. 130 points is also about 61% of Wave 3′s prior advance on the downside.
Wave 5: Theoretically this wave 5 is now from 1343, and if we took 61% of wave 3 advance and add it to 1343, we come up with about 1470.
1470 would then be a double top in the market, stop wave 5 in its tracks… and be followed by a large correction.
So with the above in mind, we advise watching 1470-74 with keen interest as the market will want to take this area out with authority to continue the intermediate bull run. If not, we could be in for some downside trouble…
Don't miss a single Elliot Wave Trading article from David Banister, consider joining us for free weekly reports. Just visit Market Trend Forecast or better yet sign up for a 33% discount on a one year subscription to Davids complete service today.
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Wednesday, January 2, 2013
The Fiscal Pop-N-Drop for Equities – Look Out
My to the point answer is “Yes” but there will be some bumps and navigating positions along the way.
Looking at the charts below you will notice how stocks are trading up over 4% in two trading sessions and several indicators and technical resistance levels are now being tested. Naturally when several resistance levels across multiple time frames, cycles and indicators we must be open to the idea that stocks could pause or pullback for a few days before continuing higher.
Here is a quick snapshot of charts we follow closely to help determine short term overbought and oversold market conditions.....Click here to check out the charts for "The Fiscal Pop-N-Drop for Equities – Look Out"
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Monday, December 31, 2012
Copper ETFs and Copper Stocks About To Move Big
The long term monthly chart of the copper ETF JJC shows a potential cup and handle pattern accompanied with bullish volume characteristics. Last year copper traded sideways in a narrowing range. This type of price action tends to bore traders and investors forcing them to look elsewhere for new to trades. The saying is “If the market doesn’t shake you out, it will wait you out”
You can see on the monthly chart that the interest in this commodity diminished. You can tell because of the sideways movement and declining volume. I like to focus on investments which are out of favor but are showing signs of another big trend starting. getting on the train before it leaves the station can make for a fun ride.
Just click here to take a look at the charts, analysis and our best copper stock setup
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2013 Forecast – Tis The Season To Drink & Own Coffee
Coffee prices have fallen more than 50% since 2010 which can be seen through the coffee exchange traded fund symbol: JO. This investment seeks to replicate the returns that are potentially available through an unleveraged investment in coffee futures contracts as well as the rate of interest that could be earned on cash collateral invested in specified Treasury Bills.
Weekly, Hourly and Seasonal chart of JO Coffee Exchange Traded Fund
The top weekly chart shows my price targets for 2013 while the lower hourly chart shows strong on balance volume meaning big money is slowly building a long position in coffee. The small white chart is the seasonal chart of coffee futures showing prices historically rise from January–March, then a correction followed by another rally in to May.
Coffee prices are still in a down trend but it looks as though the end is near and if played properly it could provide up to 100% return on your capital in 2013.
Coffee Futures Monthly Long Term Chart
This chart gives you a bird’s eye view on where coffee prices are trading in the big picture scheme of things.
JO Coffee ETF VS. SBUX Starbucks Share Price:
Lower coffee bean prices has helped lift share prices of coffee companies like Starbucks: SBUX, Coffee Holdings Co.: JVA, Coffee Roasters Inc.: GMCR, and PEET’s Coffee: PEET. But cheap coffee may not be around that much longer and the lower earnings for coffee brewers may be closer than most may think.
2013 Caffeine Conclusion:
In short, I have been watching coffee prices for a bottoming pattern for months and I now feel it is getting really close to a bottom and it could be a great trade and investment in the new year. As for companies like Starbucks it will likely not have much of an affect on the bottom line until the second half of the year though it is something to keep an eye on during earning seasons.
If you want my trading and investing ideas each week along with trade alerts for ideas like this then join my newsletter today at The Gold & Oil Guy.com
Chris Vermeulen
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Sunday, December 30, 2012
The New Era of Oil Renaissance....Where Nuclear Failed and Crude Oil Succeeded
In a continuation of our series on the state of the oil industry we look at some of the other ramifications of what we are labeling the Oil Renaissance in the US, and around the world for that matter. This phrase was first proposed regarding the potential Nuclear turnaround here in the US, where companies like NRG Energy, Toshiba and many more players all along the supply chain were positioning themselves for the Nuclear Renaissance of cheap, and abundant Nuclear energy for the next 50 years.
Well, the natural disaster in Japan changed that movement in the span of a week of just untenable radioactivity readings coming out of Japan. An already uphill battle for changing public sentiment towards the dangers of nuclear energy became an impractical fight from an investment standpoint that relied upon large DOE loan guarantees to attract private investment.
It is ironic, but all these companies spent a lot of time and effort from lobbying to developing strategic partnerships with each other, and in the end, most of that 7 year effort had to be written off by firms. It really shows how firms have to get the industry right; Oil was so much the smarter play. Higher margins, better technology, much easier safety hurdles, and even the environmental fight is much more manageable.
Not to mention the number of jobs created is far more with an Oil Renaissance as opposed to a Nuclear Renaissance, even with a complete buildup of the entire nuclear supply chain. Nuclear projects are just not scalable like oil projects are from a numbers standpoint due to the regulation, lead times for components, inspection, build times, and many more constraints.
No DOE Loan Guarantees: The Free Market at Work
We are going to have a Renaissance in this country, it just happened under everyone`s nose. The free market of high oil prices for the last 10 years made it happen all on its own without government subsidies, and part of the reason that things are going to get real tough for the alternative energy folks over the next 5 years as those government subsidies wind down. They will not make sense from an economic standpoint once oil prices come down considerably, and from a budgetary perspective we can no longer afford this propping up industries that cannot sustain themselves on their own merit in the free market. A 16 trillion dollar debt and climbing means the environmentalists will now be facing an uphill fight on Capitol Hill to have their cause funded by the American taxpayer.
Click here to read the entire EconMatters article "The New Era of Oil Renaissance, Where Nuclear Failed, Crude Oil Succeeded"
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Friday, December 28, 2012
SeaDrill [SDRL] Financial Calendar for 2013
Don't put that calendar away....Seadrill Limited [SDRL] plans to release its financial statements on the following dates in 2013:
February 28, 2013 - Preliminary fourth quarter and financial year 2012 results
May 31, 2013 - First quarter 2013 results
August 30, 2013 - Second quarter 2013 results
November 29, 2013 - Third quarter 2013 results
Please be advised that the dates are subject to change.
This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.
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February 28, 2013 - Preliminary fourth quarter and financial year 2012 results
May 31, 2013 - First quarter 2013 results
August 30, 2013 - Second quarter 2013 results
November 29, 2013 - Third quarter 2013 results
Please be advised that the dates are subject to change.
This information is subject of the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.
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Thursday, December 27, 2012
Now Available....CME Groups 2013 Product Expiration Calendar
Just click here to get the CME Groups 2013 Product Expiration Calendar
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Monday, December 24, 2012
Musings: E&P Spending Survey Gives Cheer Not Lumps Of Coal
According to the analysts, global oil and gas companies plan on boosting their E&P spending by 7 percent to a record $644 billion in 2013. That's the good news. The bad news is that almost all the growth in spending will be outside of North America, where the spending outlook is projected to be flat with 2012.
The analytical team at Barclays has been conducting these spending surveys for many years, and the results are anxiously awaited by the industry to see the thinking of managements about future oil and gas prices, commodity demand and where and how much the oil and gas companies figure they can, and should, spend to find, develop and produce hydrocarbons.
The capital spending increase for 2013 would mark the fourth consecutive year of growth, although the amount of the annual increases has varied noticeably. The Barclays' analysts believe, as well as energy company managements, the industry is in the early stage of an extended demand cycle, which will be driven by growth in developing economies.......Read the entire Musings article.
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Friday, December 21, 2012
EIA: U.S. could become the world’s top liquid fuels producer, but how much does it matter?
Significant increases in U.S. production of crude oil and other liquid fuels and the outlook for further growth have focused attention on the possibility that the United States could soon surpass Saudi Arabia to become the leading global producer.
A higher level of U.S. oil production could significantly boost the U.S. economy, and could also reduce global oil prices through its effect on the global crude oil and product market balances. However, regardless of any future crossing of U.S. and Saudi production paths, the timing of which would depend on which particular accounting convention is applied, Saudi Arabia will continue to play a unique and vital role in world oil markets.
Read the entire EIA article
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A higher level of U.S. oil production could significantly boost the U.S. economy, and could also reduce global oil prices through its effect on the global crude oil and product market balances. However, regardless of any future crossing of U.S. and Saudi production paths, the timing of which would depend on which particular accounting convention is applied, Saudi Arabia will continue to play a unique and vital role in world oil markets.
Read the entire EIA article
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Tuesday, December 18, 2012
Trading the ABC Sentiment Shifts Ahead Of The Crowd
Today David Banister shows us how to spot the 3 day rest B wave for profits......
One of the most obvious keys to successful trading or investing is buying low and selling high. The problem being if it was that easy to pinpoint those low and high points then all traders would be batting 1000%. What we use at my ATP service is a combination of fundamental analysis and catalyst spotting inter-twined with charting techniques. Most of our work revolves around buying substantial dips in a strong stock, 3x ETF’s, or reversal patterns. 3x ETF’s are great for short term swings as they function almost exclusively on crowd behavioral patterns, but it also applies to individual stocks.
In all cases what traders really need to spot ahead of the masses of investors is a subtle shift in sentiment. That key pivot point where the negative sentiment whether it be short term or long term is about to run out of gas, and the bullish sentiment is going to take over and reverse the stock or ETF higher or break the position out of a base pattern.
One of the most common patterns amongst many that we use as trigger points is the ABC pattern. This is a situation where the stock or ETF recently had a strong run. That run produced a flurry of over optimistic sentiment and is reflected in the high spike in the stock from the prior base. We call this the “A Wave High” pivot point. This is where many of the traders who chase short term performance come in with a bang, right near the top.
Read Banisters complete article "Trading the ABC Sentiment Shifts Ahead Of The Crowd"
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One of the most obvious keys to successful trading or investing is buying low and selling high. The problem being if it was that easy to pinpoint those low and high points then all traders would be batting 1000%. What we use at my ATP service is a combination of fundamental analysis and catalyst spotting inter-twined with charting techniques. Most of our work revolves around buying substantial dips in a strong stock, 3x ETF’s, or reversal patterns. 3x ETF’s are great for short term swings as they function almost exclusively on crowd behavioral patterns, but it also applies to individual stocks.
In all cases what traders really need to spot ahead of the masses of investors is a subtle shift in sentiment. That key pivot point where the negative sentiment whether it be short term or long term is about to run out of gas, and the bullish sentiment is going to take over and reverse the stock or ETF higher or break the position out of a base pattern.
One of the most common patterns amongst many that we use as trigger points is the ABC pattern. This is a situation where the stock or ETF recently had a strong run. That run produced a flurry of over optimistic sentiment and is reflected in the high spike in the stock from the prior base. We call this the “A Wave High” pivot point. This is where many of the traders who chase short term performance come in with a bang, right near the top.
Read Banisters complete article "Trading the ABC Sentiment Shifts Ahead Of The Crowd"
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EIA: United States Energy Imports Decline While Energy Exports Increase
In 2011, the United States consumed more than 97 quadrillion Btu (quads) of energy, despite only producing about 78 quads. The difference, about 18 quads, reflects the balance of imports and exports of energy. Petroleum, which includes crude oil as well as petroleum products, accounted for a majority of both energy imports and exports.
The United States imported almost three times as much energy as it exported in 2011, a ratio that is much lower than the import peak in 2002, when energy imports were more than eight times energy exports. Imports have exceeded exports in every year since 1952.
Petroleum made up about 86% of energy imports in 2011. Canada supplied the largest share of these petroleum imports. The next biggest sources of U.S. petroleum imports in 2011 were Mexico, Saudi Arabia, Venezuela, and Nigeria, in that order. Overall, about 40% of U.S. petroleum imports came from countries in the Organization of the Petroleum Exporting Countries (OPEC), while 60% came from non OPEC countries such as Canada, Mexico, Russia, and Brazil. Most of these petroleum imports were crude oil as opposed to petroleum products.
Besides petroleum, most of the remaining energy imports were natural gas (12%). All other fuel sources, including coal, coal coke, biofuels, and electricity, combined to account for about 2% of energy imports in 2011.
Petroleum also made up the bulk (57%) of U.S. energy exports in 2011. However, less than 2% of that exported petroleum was crude oil. Most of it was products derived from crude oil: petroleum products, unfinished oils, pentanes plus, and gasoline blending components, as the United States has some of the world's most advanced oil refineries.
Other energy exports include coal and coal coke (27%), natural gas (15%) and a small amount of biofuels and electricity (about 1%).
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The United States imported almost three times as much energy as it exported in 2011, a ratio that is much lower than the import peak in 2002, when energy imports were more than eight times energy exports. Imports have exceeded exports in every year since 1952.
Petroleum made up about 86% of energy imports in 2011. Canada supplied the largest share of these petroleum imports. The next biggest sources of U.S. petroleum imports in 2011 were Mexico, Saudi Arabia, Venezuela, and Nigeria, in that order. Overall, about 40% of U.S. petroleum imports came from countries in the Organization of the Petroleum Exporting Countries (OPEC), while 60% came from non OPEC countries such as Canada, Mexico, Russia, and Brazil. Most of these petroleum imports were crude oil as opposed to petroleum products.
Besides petroleum, most of the remaining energy imports were natural gas (12%). All other fuel sources, including coal, coal coke, biofuels, and electricity, combined to account for about 2% of energy imports in 2011.
Petroleum also made up the bulk (57%) of U.S. energy exports in 2011. However, less than 2% of that exported petroleum was crude oil. Most of it was products derived from crude oil: petroleum products, unfinished oils, pentanes plus, and gasoline blending components, as the United States has some of the world's most advanced oil refineries.
Other energy exports include coal and coal coke (27%), natural gas (15%) and a small amount of biofuels and electricity (about 1%).
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Saturday, December 15, 2012
Getting Coal in Your Stocking May Be Exactly What You Want
Looks like the guys at The Gold & Oil Guy.com are working through the weekend as staffer Chris Vermeulen is bringing us yet another great trade to get Mondays trading off to a good start.....
We all want new and exciting electronic gizmos and gadgets for the holiday season. Unfortunately they have the tendency to lose almost all their value within weeks because of newer versions etc… but what if you just got a lump of dirty old coal in your stocking, how would you feel?
The only individuals who would appreciate a dirty gift like that would be those forward looking investors who see major opportunities before they become the next big movers and headline news.
Knowing how to spot Stage 1 patterns is one of the most important bits of information you need to know as an investor. This one pattern is how I found RIMM which now up 100% in the past 30 days, ANR up 30% in two weeks, FSLR up 20% in 20 days and the list goes on. My main focus is on ETFs because of lower risk they provide but very powerful when applied to individual stocks.
Coal and coal stocks have been out of favor for almost two years now. But these unwanted and hated shares may soon be owned by the masses, or at least by traders and investors. A few weeks ago to I talked about the four stages all investments go through and which patters you must be able to spot in order to make huge money investing while having very limited downside risk.
In summary, Trade with the BIG BOARD and only focusing on buying stocks, ETFs etc… as they are coming out of a Stage 1 Accumulation Basing Pattern. This puts the odds greatly in your favor for not only winning the majority of your trades but to generate above average returns.
The New York Stock Exchange is the big board. This chart formed a reversal candle last week which points to lower prices. Its likely we see a 1-2 week dip before buyers step back in. Until then individual stocks should pause or form mini bull flags until the sellers are finished and buyers step back into risk on assets (equities).
Coal stocks have been bouncing bottom for some time and if you did not review the Stages Report using the link above then do so now so you know what to expect in detail.
KOL coal exchange traded fund is a basket of coal companies and is starting to show signs of a new bull market. A breakout and close above $26.00 should trigger strong buying with the potential of a 21% gain before it hits my first price target. This could go way past that but one target at a time folks.
Naturally I would like to see a bull flag or pause in KOL over the next couple weeks, then look to get long using the pivot low of that pause/bull flag as my protective stop. I’m not jumping in here as the broad market looks ready to correct and ¾ stocks follow the big board which will pull KOL down.
I pointed out ANR at $7.50 at the beginning of December to followers as it was the best looking coal stock I could find. The two key indicators “Price” and “Volume” were clearly pointing to higher prices and the potential gain even if it was just played up to the Stage 1 Resistance Level still netted a 30% move. Crazy part is that there is the potential for a 100% rally to my first price target.
In short, I really like the coal sector for the first quarter of 2013. I’m not too worried about the fiscal cliff as it’s not the end of the world and the US along with most other countries are all bankrupt together in my opinion. New rules and ideas will be implemented and life and business will continue… I am not to worried.
I am expecting stocks to continue sideways or higher into May at which time a serious correction could take place. But not to worry as we take things one week at time and will be adjusting my outlook accordingly.
Just click here to Get My Trade Ideas & alerts delivered to your inbox. Visit the The Gold & Oil Guy
Chris Vermeulen
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We all want new and exciting electronic gizmos and gadgets for the holiday season. Unfortunately they have the tendency to lose almost all their value within weeks because of newer versions etc… but what if you just got a lump of dirty old coal in your stocking, how would you feel?
The only individuals who would appreciate a dirty gift like that would be those forward looking investors who see major opportunities before they become the next big movers and headline news.
Knowing how to spot Stage 1 patterns is one of the most important bits of information you need to know as an investor. This one pattern is how I found RIMM which now up 100% in the past 30 days, ANR up 30% in two weeks, FSLR up 20% in 20 days and the list goes on. My main focus is on ETFs because of lower risk they provide but very powerful when applied to individual stocks.
Coal and coal stocks have been out of favor for almost two years now. But these unwanted and hated shares may soon be owned by the masses, or at least by traders and investors. A few weeks ago to I talked about the four stages all investments go through and which patters you must be able to spot in order to make huge money investing while having very limited downside risk.
In summary, Trade with the BIG BOARD and only focusing on buying stocks, ETFs etc… as they are coming out of a Stage 1 Accumulation Basing Pattern. This puts the odds greatly in your favor for not only winning the majority of your trades but to generate above average returns.
The BIG BOARD – NYSE – Weekly Major Stock Market Trend
The New York Stock Exchange is the big board. This chart formed a reversal candle last week which points to lower prices. Its likely we see a 1-2 week dip before buyers step back in. Until then individual stocks should pause or form mini bull flags until the sellers are finished and buyers step back into risk on assets (equities).
Coal Sector ETF Showing Stage 1 Basing Pattern
Coal stocks have been bouncing bottom for some time and if you did not review the Stages Report using the link above then do so now so you know what to expect in detail.
KOL coal exchange traded fund is a basket of coal companies and is starting to show signs of a new bull market. A breakout and close above $26.00 should trigger strong buying with the potential of a 21% gain before it hits my first price target. This could go way past that but one target at a time folks.
Naturally I would like to see a bull flag or pause in KOL over the next couple weeks, then look to get long using the pivot low of that pause/bull flag as my protective stop. I’m not jumping in here as the broad market looks ready to correct and ¾ stocks follow the big board which will pull KOL down.
ANR – My Top Coal Stock Pick
I pointed out ANR at $7.50 at the beginning of December to followers as it was the best looking coal stock I could find. The two key indicators “Price” and “Volume” were clearly pointing to higher prices and the potential gain even if it was just played up to the Stage 1 Resistance Level still netted a 30% move. Crazy part is that there is the potential for a 100% rally to my first price target.
You want Gizmos or Coal in You’re Stocking???
In short, I really like the coal sector for the first quarter of 2013. I’m not too worried about the fiscal cliff as it’s not the end of the world and the US along with most other countries are all bankrupt together in my opinion. New rules and ideas will be implemented and life and business will continue… I am not to worried.
I am expecting stocks to continue sideways or higher into May at which time a serious correction could take place. But not to worry as we take things one week at time and will be adjusting my outlook accordingly.
Just click here to Get My Trade Ideas & alerts delivered to your inbox. Visit the The Gold & Oil Guy
Chris Vermeulen
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Schlumberger Issues Disappointing Fourth Quarter Update
• The Europe/CIS/Africa Area is experiencing continued contractual delays combined with higher than usual seasonal slowdowns in activity
• North America activity is weaker than anticipated on land in the US and Western Canada.
The combined earnings per share impact of the above is estimated to be in the range of $0.05 to $0.07 per share.
Schlumberger will discuss final results of the fourth quarter in detail during its previously announced fourth quarter earnings conference call on January 18, 2013, beginning at 9:00 am (US Eastern Time), 3:00 pm (Paris time).
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Thursday, December 13, 2012
Mid week trades to focus on .... SPX, U.S. Dollar and Natural Gas
Yesterday’s price action was very bearish yet again and we are patiently waiting for a counter trend pullback to happen. While three are some good looking plays out there I really do not want to get long until the market clears the air with a bout or three of strong selling. Remember 3:4 stocks follow the market and the odds of picking a commodity or ETF that bucks the trend is unlikely.
SP500 / Broad Stock Market
We have seen a bug run up in stocks this month and things are looking a little long in the teeth. A large number of stocks are trading above their upper Bollinger band and the broad market is testing that key resistance level also. Typically when a Bollinger band is reached we see price reverse for a couple days at minimum.
While the equities market is in a new uptrend as seen by the moving averages I pullback seems imminient. The last two days has formed reversal candles and are pointing to lower prices.
Dollar Index Hourly Chart
This chart shows a possible bottom forming in the dollar pointing to a 3-8 day pullback in stocks.
Gold Futures Hourly Chart
Natural Gas Hourly Chart
Morning Trading Conclusion
Looking at the charts on several different time frames, not all shown here, technical analysis shows a pullback in stocks is highly likely. This is what we are currently positioned for.
The US dollars downward momentum is slowing and if it can find a bid today it should trigger strong selling in both stocks and commodities. Gold and silver are down sharply along with miners.
We have been watching natural gas for a few months and know that it has been trading inverse to what stocks do. This bodes well for a bounce in natural gas if stocks start a sell off. That being said, natural gas is trading at a key tipping point that could spark a very fast and hard drop. This knife can fall at a speed that will take a slice out of your trading account if not traded and managed properly (tiny position and use of a stop). I actually like natural gas the more it moves down and could issue a buy alert on it today or this week. I would like to see volume decline at this level showing the momentum is slowing......
Chris Vermeulen
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SP500 / Broad Stock Market
We have seen a bug run up in stocks this month and things are looking a little long in the teeth. A large number of stocks are trading above their upper Bollinger band and the broad market is testing that key resistance level also. Typically when a Bollinger band is reached we see price reverse for a couple days at minimum.
While the equities market is in a new uptrend as seen by the moving averages I pullback seems imminient. The last two days has formed reversal candles and are pointing to lower prices.
Dollar Index Hourly Chart
This chart shows a possible bottom forming in the dollar pointing to a 3-8 day pullback in stocks.
Gold Futures Hourly Chart
Natural Gas Hourly Chart
Morning Trading Conclusion
Looking at the charts on several different time frames, not all shown here, technical analysis shows a pullback in stocks is highly likely. This is what we are currently positioned for.
The US dollars downward momentum is slowing and if it can find a bid today it should trigger strong selling in both stocks and commodities. Gold and silver are down sharply along with miners.
We have been watching natural gas for a few months and know that it has been trading inverse to what stocks do. This bodes well for a bounce in natural gas if stocks start a sell off. That being said, natural gas is trading at a key tipping point that could spark a very fast and hard drop. This knife can fall at a speed that will take a slice out of your trading account if not traded and managed properly (tiny position and use of a stop). I actually like natural gas the more it moves down and could issue a buy alert on it today or this week. I would like to see volume decline at this level showing the momentum is slowing......
Chris Vermeulen
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Dominick Chirichella: Crude Oil Prices Lower on Profit Taking Selling
Today in the EU another tranche of aid was approved for Greece while the EU Finance Ministers finally agreed to put the ECB in charge of all of the banks. Greece is now moving further into the background and will remain a secondary market driver for the next several months or until the next Greece crisis emerges. The agreement to put the ECB in charge of all of the banks will move the EU one step closer to financial integration. The agreement opens the door for the EU's financial firewall to now provide direct bailout to the banks under the direction of the ECB. As is always the case with the EU there are still many details that will have to be worked out prior to the start date of the new ECB authority on March 1, 2014. Overall pushing Greece into the background coupled with the new agreement by the EU Finance Ministers is a positive for the EU economy as well as the EU equity markets at least for the short term.
In the US at least one of the major uncertainties is out of the way... the outcome of the last US FOMC meeting of the year. As expected the Fed replaced Operation Twist with a new or additional round of quantitative easing... let's say QE3a or QE4 that will entail the buying of another $45 billion dollars of long term Treasury instruments. Thus starting in January the Fed will be printing about $85 billion dollars per month to provide liquidity to the long term bond markets...both mortgage and treasury instruments.....Read the entire article and see Dominicks charts.
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EIA: For most fuel sources, domestic production has been increasing
In 2011, the United States produced about 78 quadrillion Btu (quads) of energy, more than at any point in the nation's history. More than three-quarters of this energy production came from nonrenewable fossil fuels: coal, natural gas, crude oil, and natural gas plant liquids. Despite rising production, the United States was a net energy importer, consuming more than 97 quads of energy in 2011.
The 60.6 quads of domestic fossil fuel production set a record, exceeding the previous peak of 59.3 quads in 1998. Of those fuels, natural gas surpassed coal as the most produced fuel with 23.5 quads compared to coal's 22.2 quads. Production of crude oil, which experienced a long decline from 20.4 quads in 1970 to 10.5 quads in 2008, rose to almost 12 quads in 2011. Natural gas plant liquids (NGPL), which are distinct from 'dry' natural gas, rose to their highest level of 2.9 quads.
Other fuels also experienced record production levels in 2011. Biomass, which includes wood and wood-derived fuels, biomass waste, and biomass inputs to the production of ethanol and biodiesel, increased to 4.5 quads. Other nonhydroelectric renewable energy increased to 1.6 quads, mostly from wind (1.2 quads), with the balance from geothermal and solar photovoltaic.
The other fuel sources remained at their recent product levels: nuclear electric power contributed 8.3 quads, maintaining its position as the nation's largest nonfossil fuel energy source, and hydroelectric power contributed 3.2 quads.
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The 60.6 quads of domestic fossil fuel production set a record, exceeding the previous peak of 59.3 quads in 1998. Of those fuels, natural gas surpassed coal as the most produced fuel with 23.5 quads compared to coal's 22.2 quads. Production of crude oil, which experienced a long decline from 20.4 quads in 1970 to 10.5 quads in 2008, rose to almost 12 quads in 2011. Natural gas plant liquids (NGPL), which are distinct from 'dry' natural gas, rose to their highest level of 2.9 quads.
Other fuels also experienced record production levels in 2011. Biomass, which includes wood and wood-derived fuels, biomass waste, and biomass inputs to the production of ethanol and biodiesel, increased to 4.5 quads. Other nonhydroelectric renewable energy increased to 1.6 quads, mostly from wind (1.2 quads), with the balance from geothermal and solar photovoltaic.
The other fuel sources remained at their recent product levels: nuclear electric power contributed 8.3 quads, maintaining its position as the nation's largest nonfossil fuel energy source, and hydroelectric power contributed 3.2 quads.
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Wednesday, December 12, 2012
The One Crude Oil Chart Everybody Should See
When people read about a long term forecast of world oil supply, say, out to 2030, they often believe that the forecasters are merely incorporating our knowledge of existing fields and figuring out how much oil can be extracted from them over the forecast period.
Nothing could be further from the truth. Much of the forecast supply has not yet been discovered or has no demonstrated technology which can extract or produce it economically. In other words, such forecasts are merely guesses based on the slimmest of evidence.
Perhaps the best ever illustration of this comes from a 2009 presentation made by Glen Sweetnam, a U.S. Energy Information Administration (EIA) official. The EIA is the statistical arm of the U.S. Department of Energy.
The following chart from that presentation will upend any notion that we know exactly where all the oil we need to meet expected demand will come from.....Read the entire article "The One Crude Oil Chart Everybody Should See "
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Nothing could be further from the truth. Much of the forecast supply has not yet been discovered or has no demonstrated technology which can extract or produce it economically. In other words, such forecasts are merely guesses based on the slimmest of evidence.
Perhaps the best ever illustration of this comes from a 2009 presentation made by Glen Sweetnam, a U.S. Energy Information Administration (EIA) official. The EIA is the statistical arm of the U.S. Department of Energy.
The following chart from that presentation will upend any notion that we know exactly where all the oil we need to meet expected demand will come from.....Read the entire article "The One Crude Oil Chart Everybody Should See "
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Monday, December 10, 2012
Is this "an emerging low" in gold stocks?
Gold stocks have been in another recent downtrend, which makes sense during a “wave 2″ correction in GOLD.
If we review the GDX ETF for Gold Stocks we can see a possible triple bottom formation. This one though looks bullish for a reversal trade to the upside near term as GOLD forms a C wave bottom.
This triple bottom looks like a series of higher lows should the 43-44 GDX ranges hold near term. The MACD line is still trending down, but in very oversold territory as in the prior two lows that had massive rallies.
Ways to play a reversal for the aggressive stock investor is NUGT ETF, which is a 300% long leveraged ETF based loosely on the GDX ETF (1x).
The specific timing of entering NUGT is of course tricky and best saved for our ATP trading service. That said, assuming GOLD does bottom at 1681 or 1631 near term, the GOLD stocks tend to lead the metal higher.… so they will bottom BEFORE the metal.
Here is the GDX long term chart showing what looks like an emerging Tradeable low...
Learn more about our trading partners, ATP, at The Active Trading Partners and click here to review recent samples here.
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If we review the GDX ETF for Gold Stocks we can see a possible triple bottom formation. This one though looks bullish for a reversal trade to the upside near term as GOLD forms a C wave bottom.
This triple bottom looks like a series of higher lows should the 43-44 GDX ranges hold near term. The MACD line is still trending down, but in very oversold territory as in the prior two lows that had massive rallies.
Ways to play a reversal for the aggressive stock investor is NUGT ETF, which is a 300% long leveraged ETF based loosely on the GDX ETF (1x).
The specific timing of entering NUGT is of course tricky and best saved for our ATP trading service. That said, assuming GOLD does bottom at 1681 or 1631 near term, the GOLD stocks tend to lead the metal higher.… so they will bottom BEFORE the metal.
Here is the GDX long term chart showing what looks like an emerging Tradeable low...
Learn more about our trading partners, ATP, at The Active Trading Partners and click here to review recent samples here.
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Friday, December 7, 2012
What the VIX Term Structure is Saying About the Fiscal Cliff
The past few weeks have been full of a constant barrage of press conferences and public statements from the charlatans in Washington D.C. Politicians cannot pass up a chance to get in front of the cameras and the media has used the “fiscal cliff” as a mechanism to scare average Americans further about their future.
Interestingly enough, amid all of the nonsense that has been going on stocks have remained resilient. I think sometimes its important to just step back away from the media’s noise and just look at some price charts for more clarity. The S&P 500 Index has been trading in a relatively tight range now for over 6 trading sessions as shown here by the great staff at The Technical Traders.com......
Read "What the VIX Term Structure is Saying About the Fiscal Cliff"
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Interestingly enough, amid all of the nonsense that has been going on stocks have remained resilient. I think sometimes its important to just step back away from the media’s noise and just look at some price charts for more clarity. The S&P 500 Index has been trading in a relatively tight range now for over 6 trading sessions as shown here by the great staff at The Technical Traders.com......
Read "What the VIX Term Structure is Saying About the Fiscal Cliff"
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Thursday, December 6, 2012
Energy Sector Storm Brewing – Oil & Gas Stocks
Todays article comes from our trading partner Chris Vermeulen of The Gold & Oil Guy.com and if you have been following him this fall you know Chris has been cranking out the great calls. Today appears to be no different.....
Oil and gas along with their equities have been under performing for the most part of 2012 and they are still under heavy selling pressure.
I watch the oil futures chart very closely for price and volume action. And the one thing that is clear for oil is that big sellers are still unloading copious amounts of contracts which is keeping the price from moving higher. Oil is trading in a very large range and is trending its way back down the lower reversal zone currently. Once price reverses back up and starts heading towards the $100 and $105 levels it will trigger strong buying across the entire energy sector.
Crude Oil, Energy & Utility Sector Chart – Weekly Time Frame
The chart below shows the light crude oil price along with the energy and utilities sectors. The patterns on the chart are clearly pointing to higher prices but the price of oil must shows signs of strength before that will happen. Once XLE & XLU prices break above their upper resistance levels (blue dotted line) they should takeoff and provide double digit returns.
Looking at the XLU utilities sector above I am sure you noticed the steady rise in the price the last couple of years. This was a result in the low interest rates in bond price and a shift from investors looking for higher yields for their money. Utility stocks carry below average risk in the world of equities and pay out a steady and healthy dividend year after year. So this is where long term investment capital has/is being parked for the time being.
Utility Stock Sector – Deeper Look – 2 Hour Candle Chart Time Frame
Last week I covered utility stocks in detail showing you the Stage 1 – Accumulation base which they had formed. The chart below shows the recent price action on the 2 hour candle chart and recent run up. You can learn more about how to take advantage of this sector here.
Oil and Gas Services – Daily Time Frame
This chart shows a very bullish picture for the services along with its relative strength to oil (USO) at the bottom. While the sector looks a little overbought here on the short term chart, overall it’s pointing to much higher prices.
Energy Sector Conclusion:
In short, crude oil looks to be trading in a VERY large range without any sign a breakout above or below its channel lines for several months at the minimum. But if the lower channel line is reached and oil starts to trend up then these energy related sector ETFs should post some very large gains and should not be ignored.
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Chris Vermeulen
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Oil and gas along with their equities have been under performing for the most part of 2012 and they are still under heavy selling pressure.
I watch the oil futures chart very closely for price and volume action. And the one thing that is clear for oil is that big sellers are still unloading copious amounts of contracts which is keeping the price from moving higher. Oil is trading in a very large range and is trending its way back down the lower reversal zone currently. Once price reverses back up and starts heading towards the $100 and $105 levels it will trigger strong buying across the entire energy sector.
Crude Oil, Energy & Utility Sector Chart – Weekly Time Frame
The chart below shows the light crude oil price along with the energy and utilities sectors. The patterns on the chart are clearly pointing to higher prices but the price of oil must shows signs of strength before that will happen. Once XLE & XLU prices break above their upper resistance levels (blue dotted line) they should takeoff and provide double digit returns.
Looking at the XLU utilities sector above I am sure you noticed the steady rise in the price the last couple of years. This was a result in the low interest rates in bond price and a shift from investors looking for higher yields for their money. Utility stocks carry below average risk in the world of equities and pay out a steady and healthy dividend year after year. So this is where long term investment capital has/is being parked for the time being.
Utility Stock Sector – Deeper Look – 2 Hour Candle Chart Time Frame
Last week I covered utility stocks in detail showing you the Stage 1 – Accumulation base which they had formed. The chart below shows the recent price action on the 2 hour candle chart and recent run up. You can learn more about how to take advantage of this sector here.
Oil and Gas Services – Daily Time Frame
This chart shows a very bullish picture for the services along with its relative strength to oil (USO) at the bottom. While the sector looks a little overbought here on the short term chart, overall it’s pointing to much higher prices.
Energy Sector Conclusion:
In short, crude oil looks to be trading in a VERY large range without any sign a breakout above or below its channel lines for several months at the minimum. But if the lower channel line is reached and oil starts to trend up then these energy related sector ETFs should post some very large gains and should not be ignored.
Get These Weekly Trade/Investment Ideas In Your Inbox FREE by visiting here at The Gold & Oil Guy.com
Chris Vermeulen
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Wednesday, December 5, 2012
Gold Should Be Nearing A Major Bottom
The recent rally in Gold took the metal from the 1620’s to roughly 1800 per ounce before the ensuing corrective action began. Back around October 20th we warned our readers about a likely “ wave 2” correction in Gold and we had several reasons for that warnings. One of the biggest concerns we had was that the sentiment surveys were running very hot at the time. The percentage of professional advisors polled that were bullish on GOLD was 88%, with 7% neutral and only 7% bearish. Elliott Wave Theory is the foundation of our work, though we are sure to mix in other clues and elements to “fact check” our reads. When you see sentiment readings that high, coupled with a $180 rally leading up to those readings, you can begin to look for clues of a top.
The other warning signal we noted was the MACD signal which had crossed south and was a topping warning signal to get out of GOLD for intermediate traders. At the time, we surmised that a “wave 2” correction in sentiment, and therefore price was required to work off the overbought conditions. The first level attacked the 1681 areas roughly and then a “B” wave rally to 1751 roughly ensued. Wave 2’s are made up of a 3 wave pattern, A down- B up- and C down to finish. It appears that GOLD is now in the final C wave down in sentiment to complete the correction pattern.
Clues for the “C” wave include the Goldman Sachs quasi-bearish 2013 GOLD forecast that came out today. In addition, the media attempting to explain the drop in GOLD as being related to stronger than expected economic indicators or fiscal cliff negotiations, neither of which make any sense at all.
We expect GOLD therefore to complete the C wave correction at 1631 or 1681 specifically. There are Fibonacci fractal relationships to the first leg down (The A wave) at those levels, and they tend to repeat themselves in terms of crowd behavior. At the 1681 level we have the C wave equal to 61.8% of the A wave amplitude. At 1631 we have a more traditional C wave equal to the A wave. In either event, look for a washout low in GOLD occurring at anytime near term, and for traders to start scaling in long.
Below is the GLD ETF chart showing the two most likely bottoms for the precious metal, one of which already qualifies as of today’s trading:
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The other warning signal we noted was the MACD signal which had crossed south and was a topping warning signal to get out of GOLD for intermediate traders. At the time, we surmised that a “wave 2” correction in sentiment, and therefore price was required to work off the overbought conditions. The first level attacked the 1681 areas roughly and then a “B” wave rally to 1751 roughly ensued. Wave 2’s are made up of a 3 wave pattern, A down- B up- and C down to finish. It appears that GOLD is now in the final C wave down in sentiment to complete the correction pattern.
Clues for the “C” wave include the Goldman Sachs quasi-bearish 2013 GOLD forecast that came out today. In addition, the media attempting to explain the drop in GOLD as being related to stronger than expected economic indicators or fiscal cliff negotiations, neither of which make any sense at all.
We expect GOLD therefore to complete the C wave correction at 1631 or 1681 specifically. There are Fibonacci fractal relationships to the first leg down (The A wave) at those levels, and they tend to repeat themselves in terms of crowd behavior. At the 1681 level we have the C wave equal to 61.8% of the A wave amplitude. At 1631 we have a more traditional C wave equal to the A wave. In either event, look for a washout low in GOLD occurring at anytime near term, and for traders to start scaling in long.
Below is the GLD ETF chart showing the two most likely bottoms for the precious metal, one of which already qualifies as of today’s trading:
Freeport-McMoRan to Acquire Plains Exploration and McMoRan Exploration
Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX), Plains Exploration & Production Company (NYSE: PXP) and McMoRan Exploration Co. (NYSE: MMR) announced today that they have signed definitive merger agreements under which FCX will acquire PXP for approximately $6.9 billion in cash and stock and FCX will acquire MMR for approximately $3.4 billion in cash, or $2.1 billion net of 36 percent of the MMR interests currently owned by FCX and PXP. Upon closing, MMR shareholders will also receive a distribution of units in a royalty trust which will hold a 5 percent overriding royalty interest on future production in MMR’s existing shallow water ultra deep properties.
The combined company is expected to be a premier U.S. based natural resource company with an industry leading global portfolio of mineral assets, significant oil and gas resources and a growing production profile. FCX’s mineral assets include the world class Grasberg minerals district in Indonesia, the large-scale Morenci minerals district in North America, the Cerro Verde and El Abra operations in South America, the high potential Tenke Fungurume minerals district in the Democratic Republic of Congo (DRC) and a leading global molybdenum business.
The addition of a high quality, U.S. focused oil and gas resource base is expected to provide exposure to energy markets with positive fundamentals, strong margins and cash flows, exploration leverage and financially attractive long term investment opportunities. The combined company’s long lived resource base with commodities critical to the world’s economies provides enhanced opportunities to benefit from long term global economic growth. On a pro forma basis for 2013, approximately 74 percent of the combined company’s estimated EBITDA (equals operating income plus depreciation, depletion, and amortization) is expected to be generated from mining and 26 percent from oil and gas, with 48 percent of combined EBITDA from U.S. operations.
The oil and gas assets being acquired are located in attractive onshore and offshore U.S. geologic basins. PXP’s major assets include its established strong oil production facilities in California, a growing production profile in the onshore Eagle Ford trend in Texas, significant production facilities and growth potential in the Deepwater Gulf of Mexico and large onshore resources in the Haynesville natural gas trend in Louisiana. MMR is an industry leader in the emerging shallow water ultra deep gas trend with sizeable potential, located offshore in the shallow waters of the Gulf of Mexico and onshore in South Louisiana. The MMR portfolio is expected to provide a large, long-term and low cost source of natural gas production.
Here is the complete terms of the deal.....
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The combined company is expected to be a premier U.S. based natural resource company with an industry leading global portfolio of mineral assets, significant oil and gas resources and a growing production profile. FCX’s mineral assets include the world class Grasberg minerals district in Indonesia, the large-scale Morenci minerals district in North America, the Cerro Verde and El Abra operations in South America, the high potential Tenke Fungurume minerals district in the Democratic Republic of Congo (DRC) and a leading global molybdenum business.
The addition of a high quality, U.S. focused oil and gas resource base is expected to provide exposure to energy markets with positive fundamentals, strong margins and cash flows, exploration leverage and financially attractive long term investment opportunities. The combined company’s long lived resource base with commodities critical to the world’s economies provides enhanced opportunities to benefit from long term global economic growth. On a pro forma basis for 2013, approximately 74 percent of the combined company’s estimated EBITDA (equals operating income plus depreciation, depletion, and amortization) is expected to be generated from mining and 26 percent from oil and gas, with 48 percent of combined EBITDA from U.S. operations.
The oil and gas assets being acquired are located in attractive onshore and offshore U.S. geologic basins. PXP’s major assets include its established strong oil production facilities in California, a growing production profile in the onshore Eagle Ford trend in Texas, significant production facilities and growth potential in the Deepwater Gulf of Mexico and large onshore resources in the Haynesville natural gas trend in Louisiana. MMR is an industry leader in the emerging shallow water ultra deep gas trend with sizeable potential, located offshore in the shallow waters of the Gulf of Mexico and onshore in South Louisiana. The MMR portfolio is expected to provide a large, long-term and low cost source of natural gas production.
Here is the complete terms of the deal.....
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EIA: U.S. Monthly Crude Oil Production Reaches Highest Level Since 1998
U.S. crude oil production (including lease condensate) averaged almost 6.5 million barrels per day in September 2012, the highest volume in nearly 15 years. The last time the United States produced 6.5 million barrels per day or more of crude oil was in January 1998. Since September 2011, U.S. production has increased by more than 900,000 barrels per day. Most of that increase is due to production from oil bearing rocks with very low permeability through the use of horizontal drilling combined with hydraulic fracturing. The states with the largest increases are Texas and North Dakota.
From September 2011 to September 2012, Texas production increased by more than 500,000 barrels per day, and North Dakota production increased by more than 250,000 barrels per day. Texas's increase in production is largely from the Eagle Ford formation in South Texas and the Permian Basin in West Texas. North Dakota's increase in oil production comes from the Bakken formation in the Williston Basin. Increased production from smaller-volume producing states, such as Oklahoma, New Mexico, Wyoming, Colorado, and Utah, is also contributing to the rise in domestic crude oil production.
Don't miss this weeks most popular articles.....
Gold, Silver and Miners in Stage 1 Accumulation Mode
Is the SP 500 at a Crucial Cross Roads?
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Don't miss this weeks most popular articles.....
Gold, Silver and Miners in Stage 1 Accumulation Mode
Is the SP 500 at a Crucial Cross Roads?
Get our Free Trading Videos, Lessons and eBook today!
Tuesday, December 4, 2012
Kinder Morgan Announces 2013 Financial Expectations
Kinder Morgan today announced its preliminary 2013 projections for Kinder Morgan, Inc. (NYSE: KMI), Kinder Morgan Energy Partners, L.P. (NYSE: KMP), Kinder Morgan Management, LLC (NYSE: KMR) and El Paso Pipeline Partners, L.P. (NYSE: EPB). Chairman and CEO Richard D. Kinder stated, “We anticipate strong growth in 2013 across the Kinder Morgan family of companies. KMI’s growth is driven primarily by its ownership of the general partners of KMP and EPB.
The majority of our assets resides at KMP and EPB. KMR is financially equivalent to KMP, but does not own any assets. Kinder Morgan primarily owns or operates a diversified portfolio of fee-based energy assets that generate substantial cash flow in virtually all types of market conditions. With our large footprint of midstream assets in North America, we are confident that Kinder Morgan is well positioned for future growth.”
KMI expects to declare dividends of $1.57 per share for 2013. This represents a 16 percent increase over KMI’s 2012 budget target of $1.35 per share and a 12 percent increase over the $1.40 per share of dividends it expects to declare for 2012. Growth at KMI in 2013 is expected to be driven by continued strong performance at KMP, along with contributions from EPB and the natural gas assets that KMI acquired in the El Paso Corporation transaction.
KMP expects to declare cash distributions of $5.28 per unit for 2013, a 6 percent increase over its 2012 budget target of $4.98 per unit, which it expects to meet. KMP’s 2013 budget projection includes the expected purchase (dropdowns) of 50 percent of El Paso Natural Gas Pipeline and a 50 percent stake in midstream assets from KMI, which would give KMP 100 percent ownership of these assets. (KMR also expects to declare distributions of $5.28 per share for 2013 and the distribution to KMR shareholders will be paid in the form of additional KMR shares.)
“We see exceptional growth opportunities across all of KMP’s business segments, including the need to build more midstream infrastructure to move or store oil, gas and liquids from the prolific shale plays in the U.S. and the oilsands in Alberta, along with increasing demand for export coal and CO2,” Kinder said.
Click here for more details on what KMP expects in 2013
Don't miss this weeks most popular articles.....
Gold, Silver and Miners in Stage 1 Accumulation Mode
Is the SP 500 at a Crucial Cross Roads?
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The majority of our assets resides at KMP and EPB. KMR is financially equivalent to KMP, but does not own any assets. Kinder Morgan primarily owns or operates a diversified portfolio of fee-based energy assets that generate substantial cash flow in virtually all types of market conditions. With our large footprint of midstream assets in North America, we are confident that Kinder Morgan is well positioned for future growth.”
KMI expects to declare dividends of $1.57 per share for 2013. This represents a 16 percent increase over KMI’s 2012 budget target of $1.35 per share and a 12 percent increase over the $1.40 per share of dividends it expects to declare for 2012. Growth at KMI in 2013 is expected to be driven by continued strong performance at KMP, along with contributions from EPB and the natural gas assets that KMI acquired in the El Paso Corporation transaction.
KMP expects to declare cash distributions of $5.28 per unit for 2013, a 6 percent increase over its 2012 budget target of $4.98 per unit, which it expects to meet. KMP’s 2013 budget projection includes the expected purchase (dropdowns) of 50 percent of El Paso Natural Gas Pipeline and a 50 percent stake in midstream assets from KMI, which would give KMP 100 percent ownership of these assets. (KMR also expects to declare distributions of $5.28 per share for 2013 and the distribution to KMR shareholders will be paid in the form of additional KMR shares.)
“We see exceptional growth opportunities across all of KMP’s business segments, including the need to build more midstream infrastructure to move or store oil, gas and liquids from the prolific shale plays in the U.S. and the oilsands in Alberta, along with increasing demand for export coal and CO2,” Kinder said.
Click here for more details on what KMP expects in 2013
Don't miss this weeks most popular articles.....
Gold, Silver and Miners in Stage 1 Accumulation Mode
Is the SP 500 at a Crucial Cross Roads?
Get our Free Trading Videos, Lessons and eBook today!
Monday, December 3, 2012
Is the SP 500 at a Crucial Cross Roads?
We had an interesting 131 point SP 500 decline from the summer fall highs of 1474 to the recent 1344 lows. Interesting because in the work that I do, we focus on crowd behavioral patterns, sentiment, and Elliott Wave Theory. There is no one technical analysis methodology that works all the time, so it’s important to incorporate other elements into your work to help with some clues. Let’s examine the crossroad we are at right now around 1420 on the SP 500 and why the next move may be a “tell” as they say in poker.
The correction from the 1474 highs can be read as a 3 wave correction, which in Elliott Wave Theory is corrective against the major trend, which so far has been up. 3 wave corrections serve to work off over zealousness of the crowd and above average bullish sentiment. To be sure, at the 1474 highs the sentiment surveys were running pretty hot and near 3 year highs, a flag that waved a warning sign for us. The correction though worked off that sentiment and at 1344 was in fact a Fibonacci 61.8% retracement of the rally from 1257-1474 that we witnessed this summer. These type of Fibonacci fractal retracements at 61.8% are common correction patterns in bull cycles.
What we need to see near term on this crossroad then is a clear cut rally over the 1424 area, which now is a 61.8% upwards retracement of the drop from 1474-1344. Why is that important to clear? Because 61.8% also is a common upwards retracement for a wave 2 counter-rally in a downward trend. Clearing that hurdle would indicate that the rally from the 1344 lows is more than just a counter-trend rally, and likely the confirmed start of a solid leg upwards towards highs for this bull market cycle.
This is why we like to draw these lines in the sands and let our subscribers be aware of what to watch and why. The above chart gives you an idea of where we are at in the current cycle. Consider joining us so we can help you with daily updates on the SP 500 and Gold, stop scratching your head and guessing as to the patterns in the markets today! Go to Market Trends Forecast.com and sign up for our free weekly reports.
Get our Free Trading Videos, Lessons and eBook today!
The correction from the 1474 highs can be read as a 3 wave correction, which in Elliott Wave Theory is corrective against the major trend, which so far has been up. 3 wave corrections serve to work off over zealousness of the crowd and above average bullish sentiment. To be sure, at the 1474 highs the sentiment surveys were running pretty hot and near 3 year highs, a flag that waved a warning sign for us. The correction though worked off that sentiment and at 1344 was in fact a Fibonacci 61.8% retracement of the rally from 1257-1474 that we witnessed this summer. These type of Fibonacci fractal retracements at 61.8% are common correction patterns in bull cycles.
What we need to see near term on this crossroad then is a clear cut rally over the 1424 area, which now is a 61.8% upwards retracement of the drop from 1474-1344. Why is that important to clear? Because 61.8% also is a common upwards retracement for a wave 2 counter-rally in a downward trend. Clearing that hurdle would indicate that the rally from the 1344 lows is more than just a counter-trend rally, and likely the confirmed start of a solid leg upwards towards highs for this bull market cycle.
This is why we like to draw these lines in the sands and let our subscribers be aware of what to watch and why. The above chart gives you an idea of where we are at in the current cycle. Consider joining us so we can help you with daily updates on the SP 500 and Gold, stop scratching your head and guessing as to the patterns in the markets today! Go to Market Trends Forecast.com and sign up for our free weekly reports.
Get our Free Trading Videos, Lessons and eBook today!
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