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With 4 hours MACD crossed below signal line, an intraday top might be in place and bias is turned neutral for some consolidations. Nevertheless, we'd expect downside to be contained by 76.19 support and bring another rise. Current development indicates that choppy fall from 82.0 has completed at 68.59 already. Rise from there is expected to continue to retest this 82.0 resistance next.
In the bigger picture, the strong rebound from put crude oil back above 55 days EMA and dampens the bearish view that it has topped out at 33.2. We'll stay neutral for the moment with focus on 82.0 resistance. Break there will indicate that whole medium term rise from 33.2 is still in progress. Nevertheless, focus will remain on reversal signal as we'd expect such rise to conclude inside 76.77/90.24 fibo resistance zone.....Nymex Crude Oil Continuous Contract 4 Hours Chart.
Crude oil was slightly lower due to light profit taking overnight as it consolidates some of last week's rally. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term.
If February extends this rally, the reaction high crossing at 80.40 is the next upside target. Closes below the 20 day moving average crossing at 75.42 are needed to confirm that a short term top has been posted.
Monday's pivot point, our line in the sand is 78.55
First resistance is Monday's high crossing at 79.12 Second resistance is the reaction high crossing at 80.40
First support is the 10 day moving average crossing at 75.58 Second support is the 20 day moving average crossing at 75.42
Natural gas was lower due to light profit taking overnight as it consolidates some of Monday's rally. Stochastics and the RSI are overbought but remain 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 5.380 would confirm that a short term top has been posted.
First resistance is the overnight high crossing at 6.025 Second resistance is the 87% retracement level of the October-December decline crossing at 6.077
Natural gas pivot point for Monday is 5.938
First support is the 10 day moving average crossing at 5.774 Second support is the 20 day moving average crossing at 5.380
The U.S. Dollar was lower overnight and trading below initial support marked by the 10 day moving average crossing at 78.02. 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 77.03 would confirm that a short term top has been posted. If March renews 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 last 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 overnight low crossing at 77.71 Second support is the 20 day moving average crossing at 77.03
Crude oil closed higher for the fourth day in a row on Monday as it extends last week's rally above the 20 day moving average. The high range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term.
If February extends today's rally, the reaction high crossing at 80.40 is the next upside target. Closes below last Tuesday's low crossing at 72.72 would confirm that a short term top has been posted.
First resistance is today's high crossing at 79.12 Second resistance is the reaction high crossing 80.40
First support is the 20 day moving average crossing at 75.41 Second support is the 10 day moving average crossing at 74.89
Natural gas closed higher on Monday as it extends this month's rally. The high range close sets the stage for a steady to higher opening on Tuesday. 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 this fall's decline crossing at 6.077 is the next upside target. Closes below the 20 day moving average crossing at 5.328 would temper the near term friendly outlook in the market.
First resistance is today's high crossing at 6.011 Second resistance is the 87% retracement level of this fall's decline crossing at 6.077
First support is the 10 day moving average crossing at 5.715 Second support is the 20 day moving average crossing at 5.328
The U.S. Dollar closed lower due to profit taking on Monday as it consolidated some of this month's rally. The low range close sets the stage for a steady to lower 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 10 day moving average crossing at 77.91 would signal that a short term top has likely been posted. Closes below the 20 day moving average crossing at 76.90 would confirm that a short term top has been posted. If March extends its current rally, the 38% retracement level of the 2008-2009 decline crossing at 79.72 is the next upside target.
First resistance is last 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 77.91 Second support is the 20 day moving average crossing at 76.90
Oil prices get swept up in a Santa Claus rally as light volume a strong stock market as well as a surprise drawdown in inventory gives the illusion of strong demand. Ho, Ho, Ho! Yet we may find out that yes, Virginia, indeed this Santa rally, despite my better judgment, may be real if oil closes above $79 a barrel.
Last week the market got a bullish boost on a surprise draw down in oil supply when the Energy Information Agency, an arm of the Department of Energy, reported that U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum Reserve) decreased by 4.9 million barrels from the previous week. That caught the market by surprise because we also saw a drawdown in the supply of distillates to the tune of 3.1 million barrels. Don’t try to reason that supply is way above normal or that most likely the draws are skewered due to bad weather conditions impacting imports because none of these justifications seem to matter. You just have to believe. You really will have to believe if oil closes above $79 a barrel.
Now some think the rally is for real because of the early blast of winter. Despite the worries over global warming, it is cold weather that is inspiring demand. In other words even though supplies are above the five year average, weather may be colder this winter than the five year average. The EIA on demand said that over last four weeks, total products supplied by refiners came in at an average 18.9 million barrels per day which was down by 1.1 percent compared to last year. For gasoline, over the last four weeks demand averaged 9.0 million barrels per day, up by 0.8 percent from the same period last year. Distillate fuel demand has averaged 3.7 million barrels per day over the last four weeks, down by 3.9 percent from the same period last year despite the fact that it was colder.....Read the entire article.
Commodity prices stay strong in European session as USD retreats against major currencies. The benchmark contract for gold climbs to 1113 and is likely to record a third day of increases. On weekly basis, the yellow metal is anticipated to gain for the first time in 5 weeks.
Base metals stay strong after rallying for 2 weeks. While the LME is still closed, copper futures in Comex and Shanghai Futures Exchange (SFE) advance. Strong industrial production in Japan and labor action in copper mine suggest supply/demand condition to tighten further.
Copper price April delivery on the SFE surged to a 16 month high at RMB 59180 (+2.3%) after Japan's IP report, the contract closed at RMB 5830, up +1.1%, for the day. In Chile, workers at Codelco's Chuquicamata mine decided to go on strike next month as they are discontent with the company's wage offer. The company offered a +3.8% wage increase and benefits worth 14.5 peso to sign a new 3 year contract but this has been rejected by the workers already.....Read the entire article.
A 26 mile long line of idled oil tankers, enough to blockade the English Channel, may signal a 25 percent slump in freight rates next year. The ships will unload 26 percent of the crude and oil products they are storing in six months, adding to vessel supply and pushing rates for supertankers down to an average of $30,000 a day next year, compared with $40,212 now, according to the median estimate in a Bloomberg News survey of 15 analysts, traders and shipbrokers. That’s below what Frontline Ltd., the biggest operator of the ships, says it needs to break even.
Traders booked a record number of ships for storage this year, seeking to profit from longer dated energy futures trading at a premium to contracts for immediate delivery, according to SSY Consultancy & Research Ltd., a unit of the world’s second largest shipbroker. Ships taken out of that trade would return to compete for cargoes just as deliveries from shipyards’ largest ever order book swell the global fleet.
“The tanker market has been defying gravity,” said Martin Stopford, a London based director at Clarkson Plc, the world’s largest shipbroker. Stopford has covered shipping since 1971. More than half of the ships are in European waters, with the rest spread out across Asia, the U.S. and West Africa. Lined up end to end, they would stretch for about 26 miles.....Read the entire article.
Crude oil was higher overnight as it extends last week's rally. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term. If February extends this rally, the reaction high crossing at 80.40 is the next upside target. Closes below the 10 day moving average crossing at 74.85 are needed to confirm that a short term top has been posted.
Monday's pivot point, our line in the sand is 77.50
First resistance is the overnight high crossing at 78.68 Second resistance is the reaction high crossing at 80.40
Natural gas was higher overnight as it consolidates some of last Thursday's decline. 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 5.322 would confirm that a short term top has been posted.
Natural gas pivot point for Monday is 5.723
First resistance is last Thursday's high crossing at 5.984 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 5.704 Second support is the 20 day moving average crossing at 5.322
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 76.90 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 last 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 77.90 Second support is the 20 day moving average crossing at 76.90
Crude oil's rise from 68.59 extended further to as high as 78.68 so far. The strong break of 61.8% retracement of 82.0 to 68.58 at 76.87 suggests that choppy fall from 82.0 has completed. Intraday bias remains on the upside and further rise could be seen to to retest 82.0. On the downside, below 76.29 minor support will turn intraday bias neutral first. But another rise is now in favor as long as 71.21 support holds.
In the bigger picture, the strong rebound from put crude oil back above 55 days EMA and dampens the bearish view that it has topped out at 33.2. We'll stay neutral for the moment with focus on 82.0 resistance. Break there will indicate that whole medium term rise from 33.2 is still in progress. Nevertheless, focus will remain on reversal signal as we'd expect such rise to conclude inside 76.77/90.24 fibo resistance zone.....Nymex Crude Oil Continuous Contract 4 Hours Chart.
Nymex Natural Gas (NG)
At this point, natural gas is still limited by 5.929 resitance and consolidation from there is possibly still in progress. Another fall might be seen to 38.2% retracement of 4.157 to 5.929 at 5.25. But downside is expected to be contained well above 4.837 support (61.8% retracement of 4.157 to 5.929 at 4.834) and bring rally resumption. Break of 5.929 will target 38.2% retracement of 13.694 to 2.409 at 6.72 next.
In the bigger picture, medium term fall from 13.69 is treated as part of the long term consolidation pattern that started at 15.78 back in 2005 and might have completed at 2.409 already. Rise from 2.409 should not be completed yet and we would continue to anticipate an upside breakout of the recent range of 4.157/5.138 eventually. Above 5.318 will target 38.2% retracement of 13.694 to 2.409 at 6.72 and beyond. Nevertheless, break of 4.432 support will dampen this bullish case and turn outlook mixed again.....Nymex Natural Gas Continuous Contract 4 Hours Chart.
Last week the market fell into its regular holiday tradition of light volume, as institutions and big traders enjoyed the holidays thus allowing prices to drift higher. We still have one more week of light trading volume before this year and holiday season is officially over.
Trading during low volume times is regularly misinterpreted. Many traders figure they should not be trading this time of the year but from my experience, the last two weeks of the year are amazing for short term swing plays or day trading. The market seems to be much more predictable when the large program traders are not involved.
Also the more speculative plays (small and mid cap stocks) always seem to out perform as buyers bid the prices higher into the light selling volume. This is most likely why we are seeing the NASDAQ and Russell 2000 indexes making some nice gains of late.
Take a look at the charts…
Broad Market & NASDAQ Low Volume Rally
GLD ETF Trading – Daily Chart Gold prices broke down as expected in early December and are now nearing a possible bottom. The past 3 weeks have provided some very exciting day trades shorting spot gold prices. In the next few weeks I will be starting to provide more spot gold charts and intraday price action for all the international traders and futures traders
I did not provide the chart of silver as it trades very similar to gold. When the time comes I will provide detailed analysis for entry and exit points for members.
Crude Oil USO Trend Trading USO fund had a very nice pullback in early December and I pointed out a spec play at $35.50 with targets set at $37, $38 and $40. So far the first two profit taking targets have been reached.
Sorry for all the lines on the chart but sometimes it’s the only way to remember where all the crucial levels are for trading pivot points.
Natural Gas UNG Trend Trading Natural gas trades like a bucking bronco. It’s a tough ride if you do not understand market psychology and apply strict money management to your positions.
Last weeks price action closed with a bearish candle after testing resistance twice. We could get a short trade this week depending on what happens from here. Let’s keep our eyes open for a low risk setup.
Market Trends Trading Conclusion This year has been fantastic for making money, but next year will most likely be much more difficult if we see the market top and head south or trend sideways. The market topping is not an event; rather a process and trend following systems will start having more losing trades than winners as the market momentum shifts from up, to sideways then down.
Don’t get me wrong, I am not saying I think its going to roll over and head south, cause quite frankly no one knows what its going to do from this point forward. This is the reason we are in cash and patiently awaiting new low risk opportunities to place our money. The joy of trading with technical analysis is that you don’t care which direction the markets go because the analysis, if done correctly, allows you to profit in all market conditions using different trading strategies.
The board market, in my opinion, is way overbought due to the holiday rally. But we must remember there is another low volume week as we approach New Years and this could extend the rally more. Smaller trading positions should be used until we enter the New Year and volume steps back into the market.
Gold and silver are in a short term down trend and trading near a resistance level. We could see prices drop quickly or rally from here. So we are letting things unfold before making a commitment.
Oil continues to move higher and last weeks weakening US dollar helped give oil a boost.
Natural gas is trading at resistance and looks ready to head back down. The daily and 30 minute chart did not setup a signal to short Natural Gas, but it was very close.
As usual, I will update on the market and provide daily updates and trades to members.
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.
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.
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.
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
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
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
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.
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
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.
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!
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
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
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
