Oil Drops Below $70 as Equities Decline, Dollar Strengthens

Crude oil fell below $70 a barrel in New York U.S. equities dropped and the dollar strengthened for a sixth day. Oil retreated as the Standard & Poor’s 500 Index lost as much as 1.2 percent, the biggest decline in more than a month, after analysts cut ratings on companies including Sprint Nextel Corp. and MBIA Inc. The dollar has risen 2 percent since Aug. 3. “Your bearish pressures are still there,” said Bill O’Grady, chief market strategist for Confluence Investment Management in St. Louis. "The recession probably ended in June, but it’s going to be a slow global recovery, and these prices are probably pretty elevated".....Complete Story

OPEC July Output Up 4th Straight Month on Saudi Rise

The Organization of Petroleum Exporting Countries Tuesday said its members' oil production increased for a fourth straight month in July above the group's production target. The increase, a bearish signal for crude prices, highlights the rising amount of crude various OPEC members are putting into the global market at a time when world oil demand is fading due to the end of the northern hemisphere summer, the peak driving season. In its monthly oil market report, OPEC said output from its 11 members bound by production quotas rose by 105,000 barrels.....Complete Story

China Imports Record Oil, Iron Ore as Economy Expands

China bought record volumes of oil and iron ore in July as automakers, steel producers and builders expanded output to meet rising demand driven by the nation’s $586 billion stimulus spending. Oil imports jumped 18 percent to 19.6 million metric tons, and iron ore purchases rose 5 percent to 58.1 million tons from a month ago, the Beijing based customs said today on its Web site. The second largest energy user and biggest iron ore buyer spent a combined $13.8 billion on the commodities.....Complete Story

Crude Oil Trades Higher on China Import Numbers

Crude oil was higher due to short covering overnight while extending last week's narrow trading range. Stochastics and the RSI are turning bearish hinting that a short term top might be in or is near. Closes below the 20 day moving average crossing at 67.81 would confirm that a short term top has been posted.

If September extends the rally off July's low, the reaction high crossing at 74.25 is the next upside target.

Crude oil pivot point for Tuesday is 70.76

First resistance is last Friday's high crossing at 72.84
Second resistance is the reaction high crossing at 74.25

First support is the 10 day moving average crossing at 69.89
Second support is the 20 day moving average crossing at 67.81

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The September Dollar was lower due to profit taking overnight as it consolidates some of the rally off last week's low. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. Closes above the reaction high crossing at 79.77 are needed to confirm that a short term low has been posted.

If September renews this summer's decline, the 75% retracement level of the 2008-2009 rally crossing at 75.73 is the next downside target.

First resistance is the Monday's high crossing at 79.51
Second resistance is the reaction high crossing at 79.81

First support is the 20 day moving average crossing at 78.88
Second support is the 10 day moving average crossing at 78.67

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Natural gas was higher due to short covering overnight as it consolidates some of last week's decline but remains below broken support marked by the 20 day moving average crossing at 3.775. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term.

If September extends this month's decline, the reaction low crossing at 3.459 is the next downside target. Closes above the 10 day moving average crossing at 3.780 would temper the near term bearish outlook in the market.

Tuesday's pivot point for natural gas, 3.68

First resistance is the 20 day moving average crossing at 3.78
Second resistance is last Monday's high crossing at 4.16

First support is Monday's low crossing at 3.61
Second support is the reaction low crossing at 3.46

Where is Oil Headed on Tuesday?

CNBC's Sharon Epperson discusses the day's activity in the commodities markets, and looks ahead to where oil is likely headed tomorrow.

Technical Charts From The Gold and Oil Guy

Commodities took a breather last week, while stocks slowly continued their march higher. This week (Monday) commodities moved lower with profit taking and fears of a much larger precious metals and broad market sell off being anticipated in the near future. While it sure looks like we are ready for a pullback in entire market we just may not get one for some time. We could get higher prices for 2-6 weeks still.

Everyone is anticipating a market correction, which is identical to what everyone thought back in March, yet prices continued to rise for two more months (June). I am anticipating a sharp 1-3 day pullback but that is just what happens during rallies. Sellers are quickly met with buyers and the rally continues.

Take a looks at the index DIA back in April and May, you see sharp pull backs then big bounces higher. I think we are at this point now. Also small cap stocks are still holding up better than large cap stocks. This is important because I look at small cap stocks as a leading indicator for the broad market.

USO ETF – Crude Oil Prices – Daily Chart
Crude oil broke out last week and is now taking a breather as it moves sideways. Oil could quickly go either direction from here. Could be a double top in crude oil prices or it could be a large bull flag which points to much higher prices. We continue to watch as it unfolds.


UNG – Natural Gas – Daily Chart
Natural gas is not to exciting at this time. It still needs 1-3 week of price action before I will be looking to enter into a position.


Commodity Trading Conclusion
Overall the entire market is unstable. The US dollar looks ready for a big bounce or a big breakdown, same with Precious Metals, Oil and the broad market. Times like this become very difficult to trade because so many investments are at extremes. They are either way over bought or way over sold. I have really tightened up on my trading in the past 2 weeks because of this situation. My position sizes are small and I am taking profits quickly. Until we get some type of pullback/profit taking in the market I do not feel comfortable putting much money to work. I think this is how most traders are feeling right now.

I would not clear the slate and sit in cash though, as I mentioned at the beginning of the report we could see prices claw their way higher for some time so.

If you would like to receive my Free Weekly Trading Reports or my Real Time Trading Signals for ETF’s and Stocks please visit my websites at the Gold And Oil Guy or the Active Trading Partner

Crude Oil Signals a Short Term Top

Crude oil closed lower on Monday as it extended last week's trading range. The mid range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI are overbought and are turning bearish hinting that a short term top might be in or is near.

Closes below the 20 day moving average crossing at 66.77 are needed to confirm that a short term top has been posted. If September extends the rally off July's low, the reaction high crossing at 74.25 is the next upside target.

First resistance is last Friday's high crossing at 72.84
Second resistance is the reaction high crossing at 74.25

First support is the 10 day moving average crossing at 69.55
Second support is the 20 day moving average crossing at 67.30

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The U.S. Dollar closed higher on Monday as it extended last Friday's breakout above the 20 day moving average crossing at 78.94 confirming that a short term low has been posted. The high range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term.

If September extends today's rally, the reaction high crossing at 79.91 is the next upside target. Closes below the 10 day moving average crossing at 78.65 would temper the near term friendly outlook.

First resistance is today's high crossing at 79.51
Second resistance is the reaction high crossing at 79.81

First support is the 10 day moving average crossing at 78.65
Second resistance is last Wednesday's low crossing at 77.52

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Natural gas closed lower on Monday as it extended last Friday's breakout below the 20 day moving average. The low range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI have turned bearish signaling that sideways to lower prices are possible near term.

If September extends today's decline, the reaction low crossing at 3.459 is the next downside target. If September renews the rally off July's low, the reaction high crossing at 4.261 is the next upside target.

First resistance is the 10 day moving average crossing at 3.78
Second resistance is last Monday's high crossing at 4.16

First support is today's low crossing at 3.61
Second support is the reaction low crossing at 3.46

Crude Oil Falls for Third Day in New York as Equities Decline

Crude oil fell for a third session in New York as equities declined and the dollar rebounded against the euro, reducing the need for commodities as an alternate investment. Oil dropped as U.S. equities declined after four straight weeks of gains. Those increases left the Standard & Poor’s 500 Index trading at its highest level relative to earnings in more than four years. The dollar gained for a fifth day.
“Traders are just looking toward the Dow and the S&P and selling off, because we’ve had a pretty substantial run up,” said Brad Samples, a commodity analyst for Summit Energy Inc., an energy management company.....Complete Story

Minister of Oil Says Iran Will Not Lower Crude Price

Iran's Minister of Oil, Gholam-Hossein Nozari, said Monday that Iran will not lower its crude price, the official IRNA news agency reported. Iran has not lowered its crude price and will not lower it, Nozari told the reporters when asked about the rumors around the country's decision to lower its crude price. "None of oil producing countries will lower their oil prices and the prices will be decided by the market variables and the supply and demand mechanism," Nozari was quoted as saying. He said that policy making and raising prices are among key goals of Iran's Oil Ministry......Complete Story

Oil Steady in New York as Dollar Strengthens, Equities Decline

Crude oil was little changed after falling from a five week high as the dollar strengthened and equities dropped. Oil rose as much as 0.8 percent as the dollar gained for a fifth day, reducing the need for commodities as an alternate investment. A retreat in European and U.S. equities came after four straight weeks of increases left the Standard & Poor’s 500 Index trading at its highest level relative to earnings in more than four years. “The equity markets are kind of weak this morning and pushed us down at the open,” said Gene McGillian.....Complete story