Dollar Gains on Speculation U.S. Companies Bringing Back Funds

The dollar gained versus the euro and yen on speculation U.S. companies are bringing back earnings on overseas assets before the end of the year. The greenback strengthened against 13 of its 16 major counterparts on prospects U.S. reports tomorrow will show the world’s largest economy is recovering, backing the case for the Federal Reserve to withdraw emergency stimulus measures. The yen fell for the first time in four days versus the dollar after Japanese Prime Minister Yukio Hatoyama unveiled a record budget of 92.3 trillion yen ($1 trillion).

“There seems to be last minute repatriation by U.S. firms before year end,” said Yuji Saito, head of the foreign exchange group in Tokyo at Societe Generale SA. “This is helping to boost the dollar.” The dollar rose to $1.4372 per euro as of 8:30 a.m. in Tokyo from $1.4411 in New York on Dec. 25. The U.S. currency advanced to 91.55 yen from 91.11 yen. The euro traded at 131.57 yen from 131.64 yen.....Read the entire article.

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New video: The Natural Gas Trade

Dan Dicker, expert trader, and Chris Jarvis, president and founder of Caprock Risk Management, break down their bullish stance on natural gas and how to play this sector.



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Natural Gas Falls After Stockpiles Decline Less Than Expected

Natural gas futures fell in New York after the U.S. Energy Department released its weekly stockpile report that showed inventories declining less than expected. Natural gas in storage fell 166 billion cubic feet last week to 3.4 trillion cubic feet. Analysts expected a drop of 172 billion cubic feet, according to the median of 21 estimates compiled by Bloomberg. Natural gas for January delivery fell 10.7 cents, or 1.8 percent, to $5.714 per million British thermal units at 10:31 a.m. on the New York Mercantile Exchange. The futures were trading at $5.907 before the report was released at 10:30 a.m.

Gas stockpiles reached a record 3.837 trillion cubic feet in the week ended Nov. 27, according to the department. Inventory declines have averaged about 2 trillion cubic feet in each of the past three winters. A similar drop this season would leave supplies at about 1.8 trillion cubic feet in April, or about 300 billion higher than average for that time of year.....Rad the entire article.

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Crude Oil Bulls Maintain The Advantage Into Short U.S. Session

Crude oil was higher overnight as it extends Tuesday's rally above the 20 day moving average. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term.

If February extends this week's rally, the reaction high crossing at 80.40 is the next upside target. Closes below the 10 day moving average crossing at 74.11 are needed to confirm that a short term top has been posted.

Thursday's pivot point, our line in the sand is 75.97

First resistance is the overnight high crossing at 77.48
Second resistance is the reaction high crossing at 80.40

First support is the 20 day moving average crossing at 75.29
Second support is the 10 day moving average crossing at 74.11

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Natural gas was higher overnight as it extends this week's rally. Stochastics and the RSI are overbought but are neutral to bullish signaling that sideways to higher prices are possible near term.

If February extends this month's rally, the 87% retracement level of the October-December decline crossing at 6.077 is the next upside target. Closes below the 20 day moving average crossing at 5.304 would confirm that a short term top has been posted.

Thursday's pivot point for natural gas is 5.759

First resistance is Monday's high crossing at 5.979
Second resistance is the 87% retracement level of the October-December decline crossing at 6.077

First support is the 10 day moving average crossing at 5.665
Second support is the 20 day moving average crossing at 5.304

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The U.S. Dollar was lower due to profit taking overnight as it consolidates some of this month's rally. 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 76.76 would confirm that a short term top has been posted. If March extends this month's rally, the 38% retracement level of the 2008-2009 decline crossing at 79.72 is the next upside target.

First resistance is Tuesday's high crossing at 78.77
Second resistance is the 38% retracement level of the 2008-2009 decline crossing at 79.72

First support is the 10 day moving average crossing at 77.78
Second support is the 20 day moving average crossing at 76.76

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Crude Stays Strong Ahead of Holiday But Yet to Confirm Correction is Over

Despite thin trading ahead of long holiday, crude oil price's near term outlook remains strong. Currently trading at 77.2, the February contract is hovering around the highest level in 3 weeks. After plummeting to as low as 68.59 on December 14, the black gold has rebounded steadily as inventory levels from developed economies declined, showing signs of demand recovery. However, we are yet to confirm if crude oil has resumed the rise from 33.2 (January 2009) until price can trade sustainably above 80. On monthly basis, December will be a volatile month but actual gain or loss will be minimal.

Natural gas soars for the third consecutive day and has gained +1.4% so far this week. The market sentiment has turned after gas inventory dropped in the past 2 weeks. Later today, the US Energy Department will probably report that gas storage declined -171 bcf to 3395 bcf in the week ended December 18.....Read the entire article.

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10 Days of Indexes and Commodities

It’s been a great year as we head into the final few trading sessions. The past several weeks the indexes have not done much of anything which is why we are now in cash.

I feel as though the market is about to change direction abruptly in the coming days or weeks. I feel this way for several reasons:

1. NYSE, Dow Jones, S&P500 are all drifting higher into resistance levels on the 10 day, 60 minute charts. Light volume tends to favor higher price hence the reason for the holiday rally.
2. Broad market momentum waves are topping
3. These same indexes are trading at resistance levels from early 2008
4. Money flow is indicating large institutions have been big sellers over the past 3 weeks.
5. US economy I think is worse than most want to think

So take a look at these 10 day charts which clearly show resistance and support trend lines. Each, if broken will lead to a sharp decline. I used ETF’s as substitutes for the indexes.

Dow Jones – DIA – Top Chart
SPY – S&P500 – Middle Chart
NYSE – Bottom Chart


Stocks have started to decouple for the US dollar in recent days so I am not focusing much on what affect the dollar will have on the above indexes.

That being said, the US dollar (UUP etf fund) is at a pivotal point. It’s either going to bounce off the trend line support level (blue line) and send gold back down to test the previous low, or breakdown through the support trend line. A falling dollar will give gold some power to muscle its way back up to the next short term support level.


Yesterday (Tuesday Dec 22nd) we said gold stocks and silver prices would move higher. I consider gold stocks and silver my leading indicators for the price of gold. Today (Wednesday Dec 23rd) gold stocks and silver shot higher – out performing gold by 7:1 which is very bullish for gold.

Crude oil had a large rally today sending the USO oil fund surging 3.5%, confirming a bounce off our support level 2 weeks ago. It could be warming up for another rally.

Natural gas opened lower but put in a strong session as it trended up all day. This also looks very strong and if prices breakout and follow through next week natural gas could be making a real rally for once.

This is a short trading week with Thursday only a half trading session and Friday being closed for Christmas/Holidays. We will not have any low risk setups this week and because we are sitting in cash, let’s take this time to enjoy our family, friends and pets 

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Where is Crude Oil Headed on Thursday?

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




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Crude Oil Bulls Gain Fresh Near Term Momentum

Crude oil closed up $2.10 at $76.50 a barrel today. Prices closed nearer the session high and hit a fresh two week high today. Crude was supported by a weaker U.S. dollar and firmer U.S. stock index prices today. Bulls today gained fresh upside near term technical momentum.

Natural gas closed up 11.7 cents at $5.889 today. Prices closed near the session high and closed at a fresh two month high close today. Bulls have gained upside near term technical momentum recently. Prices are in a steep three week old uptrend on the daily bar chart.

Heating oil closed up 570 points at $2.0270 today. Prices closed nearer the session high today and scored a fresh two week high. Bulls gained some fresh upside near term technical momentum today. The bulls' next upside price objective is closing prices above solid technical resistance at $2.1000.

Unleaded gasoline (RBOB) closed up 644 points at $1.9770 today. Prices closed nearer the session high today and hit a fresh two week high. Bulls gained some fresh upside technical momentum today. The next upside price objective for the bulls is closing prices above solid technical resistance at $2.0500.

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Oil Inventories Saw Huge Declines Across the Board

The inventory report by the US Energy Department surprised the market as crude inventory fell -4.84 mmb to 327.5 mmb in the week ended December 18. The draw was significantly more than market expectation and represented the third consecutive decline. Although stockpile at Cushing, Oklahoma rose +0.57 mmb, the pace of increase has moderated and should narrow the discount of WTI crude to Brent crude.

Distillate stockpile declined -3.03 mmb, following a -2.95 mmb draw in the prior week. This is the second consecutive weekly fall. The market anticipates further draw in coming weeks as the weather gets abnormally cold. Gasoline inventory dipped -0.88 mmb to 216.3 mmb, offsetting the build in the previous week.

Rally in crude oil price accelerated after the report. The benchmark contract surged to 76.53, the highest in 3 weeks. For oil products, heating oil price jumped to 2.038 while RBOB gasoline also climbed to 1.965.....Here is the charts!

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Crude Oil Bulls Keep The Momentum as They Look to Wednesday Inventory

Crude oil was higher overnight as it consolidates above the 10 day moving average. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term.

Closes above the 20 day moving average crossing at 75.30 are needed to confirm that a short term low has been posted. If January resumes the decline off October's high, the 87% retracement level of this fall's rally crossing at 68.86 is the next downside target.

First resistance is the 20 day moving average crossing at 75.30
Second resistance is last Friday's high crossing at 75.65

First support is the 10 day moving average crossing at 73.44
Second support is last week's low crossing at 70.83

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Natural gas was slightly lower overnight as it consolidates some of Tuesday's rally. Stochastics and the RSI are overbought and are turning neutral to bearish hinting that a short term top might be in or is near.

Closes below the 20 day moving average crossing at 5.196 would confirm that a short term top has been posted. If January extends this month's rally, the 87% retracement level of the October-December decline crossing at 6.036 is the next upside target.

First resistance is Monday's high crossing at 5.929
Second resistance is the 87% retracement level of the October-December decline crossing at 6.036

First support is the 10 day moving average crossing at 5.541
Second support is the 20 day moving average crossing at 5.196

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The U.S. Dollar was slightly lower due to profit taking overnight as it consolidates some of this month's rally. Stochastics and the RSI are overbought but remain neutral signaling that additional gains are possible near term.

If March extends this month's rally, the 38% retracement level of the 2008-2009 decline crossing at 79.72 is the next upside target. Closes below the 20 day moving average crossing at 76.64 would confirm that a short term top has been posted.

First resistance is Tuesday's high crossing at 78.77
Second resistance is the 38% retracement level of the 2008-2009 decline crossing at 79.72

First support is the 10 day moving average crossing at 77.66
Second support is the 20 day moving average crossing at 76.64

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