Trade ideas, analysis and low risk set ups for commodities, Bitcoin, gold, silver, coffee, the indexes, options and your retirement. We'll help you keep your emotions out of your trading.
Jeff Rubin, the former CIBC World Markets Inc. chief economist who accurately predicted oil’s surge during the last decade, expects crude to reach $90 a barrel this quarter and $100 by the year’s end. Accelerating demand in Asia and the Middle East will force consumers to rely on costlier non-conventional energy sources such as oil sands, said Rubin, who spent 20 years with the Toronto based bank and last year published a book on energy economics, “Why Your World is About to Get a Whole Lot Smaller.” Rubin correctly forecast in 2007 that crude would reach $100.
“It’s safe to say that we’ll see triple digit oil prices by the fourth quarter of this year,” Rubin, 55, said in a telephone interview yesterday. “I would expect prices to move pretty close to that level, and be in the $90 range probably by the end of March.” Crude oil futures rose as high as $83.52 a barrel yesterday, surpassing last year’s peak of $82, after the U.S. Energy Department reported a decline in inventories of distillate fuels like heating oil. In 2008, oil reached an all time high of $147.27. It last traded at $82.40 as of 12:05 p.m. London time. The increase in oil consumption will be driven by emerging economies such as China and India rather than the industrialized nations of western Europe and the U.S., where demand has probably already peaked, according to Rubin.....Read the entire article.
Crude oil surges to as high as 83.52 and the firm break of 82.0 resistance confirms that whole medium term rise from 33.2 has resumed. Intraday bias will now remain on the upside as long as 80.79 minor support holds. Current rise should now be upper trend line resistance at 87/88 level. On the downside, below 80.79 will indicate that an intraday top is formed and bring retreat, probably to 4 hours 55 EMA (now at 79.72, before rally resumption.
In the bigger picture, the break of 82.0 resistance confirms that whole medium term rise from 33.2 has resumed. Nevertheless, there is no change in the view that it's a correction to fall fro 147.27. Hence, we'd continue to look for reversal signal as crude oil approaches 50% retracement of 147.27 to 33.2 at 90.24, which is close to 90 psychological level. However, break of 68.59 support is still needed to confirm that rise from 33.2 has completed. Otherwise, outlook will be neutral at worst even in case of deep pull back.....Nymex Crude Oil Continuous Contract 4 Hours Chart.
Nymex Natural Gas (NG)
Natural gas' break of 6.035 indicates that consolidations has completed at 5.505 already and whole rally from 4.157 has resumed. Intraday bias now remains on the upside and further rise should be seen to 6.035 will target 38.2% retracement of 13.694 to 2.409 at 6.72 next. On the downside, below 5.615 support, however, will indicate that rise from 4.157 has completed and in such case, deeper pull back could be seen to 4.157/5.318 support zone.
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 is still in progress and should target 38.2% retracement of 13.694 to 2.409 at 6.72 and beyond. On the downside, break of 4.157 support is needed to indicate that medium term rise from 2.409 has completed. Otherwise, outlook is neutral at worst even in case of deep pullback.....Nymex Natural Gas Continuous Contract 4 Hours Chart.
Crude oil was lower due to profit taking overnight as it consolidates some of the rally off December's low. 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 rally, the 38% retracement level of the 2008 decline crossing at 84.82 is the next upside target. Closes below the 10 day moving average crossing at 79.98 would signal that a short term top has been posted.
Thursday's pivot point, our line in the sand is 82.52
First resistance is Wednesday's high crossing at 83.52 Second resistance is the 38% retracement level of the 2008 decline crossing at 84.82
First support is the 10 day moving average crossing at 79.98 Second support is the 20 day moving average crossing at 76.61
Natural gas was higher overnight as it extends the rally off December's low. Stochastics and the RSI are diverging but are turning neutral to bullish signaling that sideways to higher prices are possible near term.
If February extends December's rally, October's high crossing at 6.300 is the next upside target. Closes below the 20 day moving average crossing at 5.670 are needed to confirm that a short term top has been posted.
Natural gas pivot point for Thursday is 5.911
First resistance is the 87% retracement level of the October-December decline crossing at 6.077 Second resistance is October's high crossing at 6.300
First support is the 10 day moving average crossing at 5.825 Second support is the 20 day moving average crossing at 5.670
The U.S. Dollar was higher due to short covering overnight. However, stochastics and the RSI remain bearish hinting that a short term top might be in or is near. Closes below Tuesday's low crossing at 77.39 are needed to confirm that a short term top has been posted. If March renews last month's rally, the 38% retracement level of the 2008-2009 decline crossing at 79.72 is the next upside target.
First resistance is the 10 day moving average crossing at 78.05 Second resistance is the reaction high crossing at 78.77
First support is the 20 day moving average crossing at 77.75 Second support is Tuesday's low crossing at 77.39
Overall this week has not been that exciting. Volume is below average as the big money traders slowly get back into action and wait for Fridays economic data to come out.
We have seen gold, silver and oil put in a nice rally this week but they are still not in the clear. If we get flat or better unemployment numbers we should see the US dollar rally. This seems to be exactly what the chart is telling us when using technical analysis. Here are the numbers for Friday.
Friday unemployment numbers come out for both the US & Canada. 7:00 AM ET – Canadian Unemployment Rate, Forecast 8.5%, Previous 8.5% 8:30 AM ET – USD Nonfarm Payrolls, Forecast 0%, Previous -11K 8:30 AM ET – USD Unemployment Rate, Forecast 10.1%, Previous 10%
Here is a table I created for understanding what economic data moves stocks, bonds, US$ and gold: http://www.thegoldandoilguy.com/Economic-Indicators.pdf
US Dollar Daily Trend The current trend of the dollar is now up when looking at the daily chart (higher highs and lows). The strong price thrust in December has formed a nice flag pattern. This is a continuation pattern meaning the dollar should continue higher once this pause is complete.
Gold Futures Trading Trend – 60 Minute Candle Chart As you can see from the chart below gold has made a short term bottom and is trading at a major resistance level. The question is, does gold reverse and head sharply lower or does it break through the resistance level?
Could this be the start of a new leg higher or a C wave lower (ABC retrace)? I hope it is an ABC retrace which is a bullish price pattern and it flushes out the weak positions before heading higher.
These are questions no one knows for sure but understanding where the current price is trading and that volatility could pick up very quickly in the next couple days is crucial. When volatility is about to increase managing your open positions or adjusting any possible new trades is an important part of being a successful trader.
Rule #1 Keep overall risk per trade low If volatility is about to increase I usually trade smaller positions unless I am in the zone and feeling the markets each and every move.
Rule #2 Never let a winning trade turn into a loser I scale out of positions a little quicker during volatile times to lock in a small profit (20-30% of position) which minimizes my overall risk. This also alleviates some stress as you now have a small profit and you feel good mentally.
Crude Oil – Daily Trend Trading Chart Many of us have had a great run with oil. Some of us traded the USO fund which is equivalent to buying oil at $71. Volatility was high during the time of the trade so we scaled out of the position at $75, $77.50 and $80. Some of you still have a small core position still in place which is fantastic to see!
Currently oil looks long in the teeth and ready for a pullback which could end up working perfect with Friday’s Economic news. Only time will tell so lets take it one candle at a time.
Commodity Trend Trading Conclusion: In short, this is the first week of the year with light volume as traders get back in the groove and wait for 2010’s first big economic news to hit the wires. No many of us want to stick their necks out just yet.
I don’t know what will happen but my thoughts are the news will be positive, even if its not. Some very well educated individuals think the unemployment numbers are false giving everyone the impression things are getting better. I don’t really know what to think, but I did just see Mr. Moores most recent file on Tuesday and I think it is very possible the US is pulling a long con on Americans. All I can say is thank god I’m Canadian Eh! lol
Anyways if the numbers are positive we will see money move into the US dollar, gold and oil will reverse back down. Stocks I think are decoupling from the inverse relationship with the dollar and if that is the case stocks should do well.
Trading before big news can be deadly so I continue wait until Friday or next week before doing much.
Natural gas futures rose to their highest settlement price in a year, exceeding $6 per million British thermal units as cold weather across the U.S. lifted demand for heating fuel. Temperatures in St. Louis, Memphis and Dallas will be below normal for the next week, according to a forecast from MDA Federal Inc.’s EarthSat Energy Weather. Cold weather in recent weeks cut a stockpile surplus to 14 percent for the week ended Dec. 25 from 16 percent at the start of the month. “Storage is going from materially oversupplied to more manageable inventory levels,” said Tom Orr, director of research at Weeden & Co., a brokerage in Greenwich, Connecticut. “It looks like it’s going to continue to be pretty cold here.”
Natural gas for February delivery advanced 37.2 cents, or 6.6 percent, to settle at $6.009 per million Btu at 2:50 p.m. on the New York Mercantile Exchange. The price was the highest since Jan. 5, 2009. The Energy Department may say tomorrow that U.S. stockpiles dropped 155 billion cubic feet last week, based on the median of 21 analyst estimates compiled by Bloomberg. The “seasonal norm” withdrawal is 83 billion, Scott Speaker, JPMorgan Chase & Co.’s natural gas strategist in New York, said in a note to clients yesterday. “We see a net withdrawal of 144 billion cubic feet, a draw that would significantly tighten the current year over year surplus and the surplus compared to the past five year average,” he said.....Read the entire article.
Crude oil closed sharply higher on Wednesday and spiked above October's high crossing at 83.19. The high range close sets the stage for a steady to higher opening on Thursday. 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 rally, the 38% retracement level of the 2008 decline crossing at 84.82 is the next upside target. Closes below the 10 day moving average crossing at 79.18 would signal that a short term top has been posted. First resistance is today's high crossing at 83.52. Second resistance is the 38% retracement level of the 2008 decline crossing at 84.82. First support is the 10 day moving average crossing at 79.18. Second support is the 20 day moving average crossing at 76.22.
Natural gas closed sharply higher on Wednesday and the high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are turning neutral to bullish with today's rally signaling that sideways to higher prices are possible near term. If February resumes the rally off December's low, 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 5.626 are needed to confirm that a short term top has been posted. First resistance is last Tuesday's high crossing at 6.038. 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 5.798. Second support is the 20 day moving average crossing at 5.626.
The U.S. Dollar closed lower on Wednesday and below the 20 day moving average crossing at 77.68. The low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near-term. Closes below Tuesday's low crossing at 77.39 are needed confirm that a short-term top has been posted. If March renews the rally off November's low, the 38% retracement level of the 2008-2009 decline crossing at 79.72 is the next upside target. First resistance is the reaction high crossing at 78.77. Second resistance is the 38% retracement level of the 2008-2009 decline crossing at 79.72. First support is today's low crossing at 77.59. Second support is Tuesday's low crossing at 77.39.
Baby you can park my car. Yes it might even start, baby you can park my car and baby it is still cold outside. America hibernates and parks their cars as gas consumption hits a 13 month low. The drop in demand led to big surge in gasoline inventories according to two widely followed industry reports.
The first hint that America seemed to stay home for the holidays came from the MasterCard Spending pulse report that showed that gasoline purchases fell to 8.93 million barrels a day which was down 3.5% from the week before and the lowest level of gasoline demand since September 2009. That drop in demand probably explains why in another report by the American Petroleum Institute that showed gasoline inventories surged by 5.58 million barrels.
These reports suggest the obvious, bad weather and the holidays had an adverse impact on gasoline demand. Yet it may also show that demand may still be a bit price sensitive. Retail gas prices also surged last week as the national average pump price rose 4 cents last week to $2.62 a gallon. That according to Bloomberg is 63% higher than it was a year ago at this time.
Of course the increase in price should help inspire a bit more refinery activity. The February gasoline crack spread that indicates the profitability for a refiner to turn crude into gas, improved to $7.48 cents up 65 cents from the beginning of the week. For heating oil the crack spread tightened a bit but is trading at $10.49 cents. Improving margins hopefully will get refiners back in the game producing more product to meet what we hope will be an improving demand picture.....Read the entire article.
Crude oil fell from a 14 month high after a U.S. Energy Department report showed that supplies unexpectedly increased as refineries reduced operating rates and imports gained. Stockpiles climbed 1.33 million barrels to 327.3 million in the week ended Jan. 1. Supplies at Cushing, Oklahoma, where New York traded West Texas Intermediate oil is stored, surged to the highest level since tracking began in 2004. Imports rose to the highest amount since November as refinery utilization rates dropped to the lowest total since that month.
“This report shows that there is plenty of crude oil on hand,” said Michael Fitzpatrick, vice president of energy with MF Global in New York. “There are also enough shut refinery units to meet any increase in fuel demand.” Crude oil for February delivery dropped 50 cents, or 0.6 percent, to $81.27 a barrel at 10:47 a.m. on the New York Mercantile Exchange. Oil traded at $82.47, the highest since Oct. 14, 2008, before the release of the report at 10:30 a.m. in Washington. Prices are up 67 percent from a year ago. Stockpiles of crude oil were forecast to decline 1 million barrels, according to the median estimate of 15 analysts surveyed by Bloomberg News.....Read the entire article.
Crude inventories and gasoline supplies rose last week, the government said Wednesday. Crude inventories rose by 1.3 million barrels, or 0.4 percent, to 327.3 million barrels, which is half a percent above year ago levels, the Energy Department's Energy Information Administration said in its weekly report. Analysts had expected a drop of 1.6 million barrels for the week ended Jan. 1, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.
Gasoline inventories increased by 3.7 million barrels, or 1.7 percent, to 219.7 million barrels. That was above analyst expectations and 2.9 percent above year ago levels. Demand for gasoline over the four weeks ended Jan. 1 was 0.3 percent higher than a year earlier, averaging nearly 9 million barrels a day. At the same time, U.S. refineries ran at 79.9 percent of total capacity on average, a drop of 0.4 percentage point from the prior week. Analysts expected capacity to build to 81.05 percent.
Inventories of distillate fuel, which include diesel and heating oil, fell by 300,000 barrels to 159 million barrels for the week ended Jan. 1. Analysts expected distillate stocks to drop by 1.8 million barrels. Crude prices fell 72 cents to $81.05 per barrel on the New York Mercantile Exchange.....Read the entire article.
Crude oil was slightly lower due to light profit taking overnight as it consolidates some of the rally off December's low. 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 rally, the reaction high crossing at 82.28 is the next upside target. Closes below the 20 day moving average crossing at 76.14 are needed to confirm that a short term top has been posted.
Wednesday's pivot point, our line in the sand is 81.57
First resistance is Tuesday's high crossing at 82.00 Second resistance is the reaction high crossing at 82.28
First support is the 10 day moving average crossing at 79.02 Second support is the 20 day moving average crossing at 76.14
Natural gas was higher due to short covering overnight but remains below broken support marked by the 10 day moving average, which crosses at 5.772. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term.
Closes below the 20 day moving average crossing at 5.613 are needed to confirm that a short term top has been posted. If February resumes December's rally, the 87% retracement level of the October-December decline crossing at 6.077 is the next upside target.
Natural gas pivot point for Wednesday is 5.703
First resistance is last Tuesday's high crossing at 6.038 Second resistance is the 87% retracement level of the October-December decline crossing at 6.077
First support is the 20 day moving average crossing at 5.613 Second support is last Thursday's low crossing at 5.505
The U.S. Dollar was higher due to short covering overnight but remains below initial support marked by the 10 day moving average crossing at 78.13. Stochastics and the RSI are bearish hinting that a short term top might be in or is near.
Closes below the 20 day moving average crossing at 77.69 are needed to confirm that a short term top has been posted. If March renews last month's rally, the 38% retracement level of the 2008-2009 decline crossing at 79.72 is the next upside target.
First resistance is the 10 day moving average crossing at 78.13 Second resistance is the reaction high crossing at 78.77
First support is the 20 day moving average crossing at 77.69 Second support is Tuesday's low crossing at 77.39
Crude oil is still bounded in tight range below 82.0 resistance for the moment and with 4 hours MACD crossed below signal line, intraday bias is turned neutral for the moment. Some more consolidations could be seen and a deeper retreat cannot be ruled out. But downside should be contained by 77.83 support and bring rally resumption. Firm break of 82.0 will will confirm that whole medium term rise from 33.2 has resumed and should target next key resistance level at 90. However, considering mild bearish divergence condition 4 hours MACD, break of 77.83 will indicate that rise from 68.59 has possibly completed and will turn bias back to the downside and bring deeper fall.
In the bigger picture, the strong rally from 68.59 and sustained trading above 55 days EMA argues that whole medium term rise from 2009 low of 33.2 is still in progress for another high above 82.0. Above this 82.0 will target next key cluster resistance level at 50% retracement of 147.27 to 33.2 at 90.24, which is close to 90 psychological level. Nevertheless, we'll continue to look for reversal signal as rise from 33.2, which is treated as correction to whole fall from 147.27, is expected to conclude inside 76.77/90.24 fibo resistance zone. On the downside, though, break of 68.59 is needed to revive the case that crude oil has topped out in medium term. Otherwise, outlook will be neutral at worst even in case of deep pull back.....Nymex Crude Oil Continuous Contract 4 Hours Chart.
Nymex Natural Gas (NG)
Intraday bias in natural gas is still neutral as consolidation from 6.035 continues. Some more sideway trading could be seen but after all, we'd expect 5.29 resistance turned supprot, which is close to 38.2% retracement of 4.157 to 6.035 at 5.319, to hold and bring rally resumption. Break of 6.035 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 is still in progress and should target 38.2% retracement of 13.694 to 2.409 at 6.72 and beyond. On the downside, break of 4.157 support is needed to indicate that medium term rise from 2.409 has completed. Otherwise, outlook is neutral at worst even in case of deep pullback..... Nymex Natural Gas Continuous Contract 4 Hours Chart.
Unleaded gas closed higher on Tuesday as it extends the rally off December's low. The high range close sets the stage for a steady to higher opening on Wednesday. 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 rally, October's high crossing at 213.53 is the next upside target. Closes below the 20 day moving average crossing at 195.81 are needed to confirm that a short term top has been posted.
First resistance is today's high crossing at 212.70 Second resistance is October's high crossing at 213.53
First support is the 10 day moving average crossing at 202.09 Second support is the 20 day moving average crossing at 195.81
Crude oil closed higher on Tuesday as it extends the rally off December's low. The high range close sets the stage for a steady to higher opening on Wednesday. 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 rally, the reaction high crossing at 82.28 is the next upside target. Closes below the 20 day moving average crossing at 75.85 would confirm that a short term top has been posted.
First resistance is today's high crossing at 81.99
Second resistance is the reaction high crossing 82.28
First support is the 10 day moving average crossing at 78.23
Second support is the 20 day moving average crossing at 75.85
Natural gas closed lower on Tuesday and the low range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term.
Closes below the 20 day moving average crossing at 5.580 are needed to confirm that a short term top has been posted. If February resumes the rally off December's low, the 87% retracement level of this fall's decline crossing at 6.077 is the next upside target.
First resistance is last Tuesday's high crossing at 6.038
Second resistance is the 87% retracement level of this fall's decline crossing at 6.077
First support is the 20 day moving average crossing at 5.580
Second support is last Thursday's low crossing at 5.505
Jump Start Your Trading, Get Market Club Today The U.S. Dollar closed higher due to a late day short covering rally on Tuesday but remains below the 10 day moving average crossing at 78.19. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI remain neutral to bearish hinting that a short term top might be in or is near.
Closes below the 20 day moving average crossing at 77.60 are needed confirm that a short term top has been posted. If March renews the rally off November's low, the 38% retracement level of the 2008-2009 decline crossing at 79.72 is the next upside target.
First resistance is the reaction 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 20 day moving average crossing at 77.60
Second support is today's low crossing at 77.39
The price of gold eased back from its strongest Dollar and Euro prices in nearly three weeks in London on Tuesday, holding above a one month high of £700 per ounce for UK investors as European shares and US stock futures held flat. The CRB commodities index rose almost 2% as sugar neared a three decade high and US crude oil contracts touched $82 per barrel, more than twice the price of 12 months ago. Consumer price inflation in the 16 nation Eurozone leapt in Dec. to a 10 month high, the Eurostat agency said Tuesday morning, unwinding the last of 2009's second half deflation.
"Buy stops were triggered" as gold rose late in Asia says a Hong Kong dealer today, with professional traders re entering the gold market after last month's 12% drop. "The Dollar remains the key driver," says an analyst's note. "All commodities have benefited from an increase in risk appetite." But "Buying interest in the physical market seems to have faded on gold's [1.8%] rally yesterday," says Standard Bank's daily commodity briefing. "We need to see much more Dollar weakness on a trade weighted basis to sustain a rally in gold." (Is gold's 10 year run all about the Dollar? Read Dollar Nonsense here...)
Monday saw the 1128 tonne SPDR Gold trust shed five tonnes of the gold backing its exchange traded shares, the first such drop in almost a month but only equal to the annual 0.4% expense ratio it charges stock holders. Long dated government bonds fell Tuesday morning, pushing 30 year US Treasury yields up to 4.75% ahead of Pending US Home Sales data and Vehicle Sales figures for Dec.....Read the entire article.
Crude oil fluctuated, after rising for eight days in New York, on forecasts that temperatures in the northern U.S. will climb next week. The weather in the U.S. Northeast, the area responsible for about four-fifths of the country’s heating oil use, will return to normal between Jan. 12 and Jan. 18, according to the Climate Prediction Center of the National Weather Service. Oil surged yesterday on the cold, manufacturing growth in China and the U.S., rising equities and a decline in the dollar. “It looks like the worst of the cold will hit us between Jan. 7 and Jan. 10 before temperatures moderate,” said Tim Evans, an energy analyst at Citigroup Global Markets Inc. in New York. “Traders are actually paying more attention to the S&P and the dollar, neither of which are doing anything. We have to look at these markets for direction.”
Crude oil for February delivery fell 4 cents to $81.47 a barrel at 10:49 a.m. on the New York Mercantile Exchange. Futures reached $81.99 today, the highest intraday price since Oct. 21, when they touched $82. The Standard & Poor’s 500 Index was little changed at 1,133.23. The dollar traded at $1.4423 per euro, down 0.1 percent from yesterday. A weak U.S. currency bolsters the appeal of commodities to investors looking for alternative investments. “It’s a foregone conclusion that we will soon break through last year’s high of $82,” said Peter Beutel, president of trading adviser Cameron Hanover Inc. in New Canaan, Connecticut. “We’re getting some of the coldest weather in years and that’s bound to increase demand”.....Read the entire article.
I guess we can talk about the cold but I think it's already talking for itself. Heating degree days are piling up in the energy complex but to get the full picture on this New Year surge of bullishness, you really have to look beyond your frost-bit nose. It is not so much the transitory issue that we are freezing that inspired the big move but a growing sense that interest rates will be frozen for a longer time than the market anticipated. You see, weather was a major factor that drove oil and heating fuels and orange juice yet other markets like gold and silver and copper soared as well. Ok, I know some people think gold can keep you warm at night but this rally was about more than just weather. This was about the changing attitudes of when the Fed will raise rates and the resumption of the dollar carry trade that helped drive last year Fed inspired commodity rally.
The dollar got whacked in the aftermath of weekend comments by Fed Chairman Ben Bernanke on his talk of an aggressive exit strategy. The markets seemed to not take his comment seriously or at least they had the perception that rates may stay lower longer than they thought. This perception grew stronger when Federal Reserve Board Governor Elizabeth Duke said she sees inflation remaining subdued. Fed Fund futures rallied, lowering expectations of an interest rate hike in June to a mere 58% chance, down from 78% chance at the close last week. This significant change and could have a significant impact on commodity prices.....Read the entire article.
Crude oil's rally is still in progress today and reaches as high as 81.99 so far, just shy of 82.0 high. At this point, further rise is still expected as long as 79.12 support holds. Firm break of 82.0 will confirm that whole medium term rise from 33.2 has resumed and should target next key resistance level at 90. On the downside, break of 79.12 will argue that a short term top is formed, possibly with bearish divergence condition in 4 hours MACD. In such case, intraday bias will be flipped back to the downside for pull back to 4 hours 55 EMA (now at 78.28) and below.
In the bigger picture, the strong rally from 68.59 and sustained trading above 55 days EMA argues that whole medium term rise from 2009 low of 33.2 is still in progress for another high above 82.0. Above this 82.0 will target next key cluster resistance level at 50% retracement of 147.27 to 33.2 at 90.24, which is close to 90 psychological level. Nevertheless, we'll continue to look for reversal signal as rise from 33.2, which is treated as correction to whole fall from 147.27, is expected to conclude inside 76.77/90.24 fibo resistance zone. On the downside, though, break of 68.59 is needed to revive the case that crude oil has topped out in medium term. Otherwise, outlook will be neutral at worst even in case of deep pull back.....Nymex Crude Oil Continuous Contract 4 Hours Chart.
Nymex Natural Gas (NG)
Natural gas continues to consolidate below 6.035 today and intraday bias remains neutral for the moment. Some more sideway trading could be seen but after all, we'd expect 5.29 resistance turned supprot, which is close to 38.2% retracement of 4.157 to 6.035 at 5.319, to hold and bring rally resumption. Break of 6.035 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 is still in progress and should target 38.2% retracement of 13.694 to 2.409 at 6.72 and beyond. On the downside, break of 4.157 support is needed to indicate that medium term rise from 2.409 has completed. Otherwise, outlook is neutral at worst even in case of deep pullback.....Nymex Natural Gas Continuous Contract 4 Hours Chart.
Crude oil was slightly higher overnight as it extends the rally off December's low. 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 rally, the reaction high crossing at 82.28 is the next upside target. Closes below the 20 day moving average crossing at 75.84 are needed to confirm that a short term top has been posted.
Tuesday's pivot point, our line in the sand is 80.98
First resistance is the overnight high crossing at 81.99 Second resistance is the reaction high crossing at 82.28
First support is the 10 day moving average crossing at 78.21 Second support is the 20 day moving average crossing at 75.84
Natural gas was lower overnight as it consolidates some of Monday's rally. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term. Closes below the 20 day moving average crossing at 5.587 are needed to confirm that a short term top has been posted. If February resumes December's rally, the 87% retracement level of the October-December decline crossing at 6.077 is the next upside target.
Natural gas pivot point for Tuesday is 5.828
First resistance is last Tuesday's high crossing at 6.038 Second resistance is the 87% retracement level of the October-December decline crossing at 6.077
First support is the 20 day moving average crossing at 5.587 Second support is last Thursday's low crossing at 5.505
The U.S. Dollar was slightly lower overnight as it extends Monday's decline below initial support marked by the 10 day moving average crossing at 78.18. Stochastics and the RSI are bearish hinting that a short term top might be in or is near.
Closes below the 20 day moving average crossing at 77.60 are needed to confirm that a short term top has been posted. If March renews last month's rally, the 38% retracement level of the 2008-2009 decline crossing at 79.72 is the next upside target.
First resistance is the 10 day moving average crossing at 78.18 Second resistance is the reaction high crossing at 78.77
First support is the 20 day moving average crossing at 77.60 Second support is the overnight low crossing at 77.39
Crude oil closed sharply higher on Monday as it extends the rally off December's low. The high range close sets the stage for a steady to higher opening on Tuesday. 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 rally, the reaction high crossing at 82.28 is the next upside target. Closes below the 20 day moving average crossing at 75.63 would confirm that a short term top has been posted.
First resistance is today's high crossing at 81.68 Second resistance is the reaction high crossing 82.28
First support is the 10 day moving average crossing at 77.50 Second support is the 20 day moving average crossing at 75.63
Natural gas closed higher on Monday ending a three day correction off last week's high. The high range close sets the stage for a steady to higher opening on Tuesday. Despite today's rally, stochastics and the RSI have turned bearish signaling that sideways to lower prices are possible near term.
Closes below the 20 day moving average crossing at 5.530 are needed to confirm that a short term top has been posted. If February resumes the rally off December's low, the 87% retracement level of this fall's decline crossing at 6.077 is the next upside target.
First resistance is last Tuesday's high crossing at 6.038 Second resistance is the 87% retracement level of this fall's decline crossing at 6.077
First support is the 20 day moving average crossing at 5.530 Second support is last Thursday's low crossing at 5.505
The U.S. Dollar closed sharply lower on Monday and below the 10 day moving average crossing at 78.21 signaling that a short term top has likely been posted. The low range close sets the stage for a steady to lower opening on Tuesday.
Stochastics and the RSI are neutral to bearish hinting that a short term top might be in or is near. Closes below the 20 day moving average crossing at 77.52 are needed confirm that a short term top has been posted. If March renews the rally off November's low, the 38% retracement level of the 2008-2009 decline crossing at 79.72 is the next upside target.
First resistance is the reaction high crossing at 78.77 Second resistance is the 38% retracement level of the 2008-2009 decline crossing at 79.72
First support is today's low crossing at 77.57 Second support is the 20 day moving average crossing at 77.52
Crude oil’s rally to a two month high may sputter around $82 a barrel as the commodity’s relative strength index signals that gains have been excessive, according to technical analysis by MF Global Ltd. Oil advanced for an eighth day in New York today, trading above $81 a barrel for the first time since November, as freezing temperatures around the Northern Hemisphere bolstered the outlook for fuel demand. The surge will probably founder before it reaches last year’s peak of $82 a barrel, MF Global said in a report.
The relative strength index for crude oil indicates that prices may have overshot, according to the brokerage. An asset’s RSI is a ratio based on daily closing prices that measures how far prices have advanced or dropped during a specified period. An RSI reading of 70 or above typically suggests an asset has risen too far, too fast. The last 14 day reading for crude was 67.8, the highest since October. “Technically, most complexes are approaching the upper bands of the trading range,” said Edward Meir, an MF Global analyst in Connecticut. “Crude is approaching overbought territory. We find it unlikely that prices will take out $80.50- $82 resistance”.....Read the entire article.
Arab Gulf states may get a boost from higher oil prices in 2010 but the region's real estate and banking sectors still face head winds. "We are going to see an improvement in macro economic conditions, mainly due to higher oil prices, which will trickle down to corporate activity," said Faisal Hassan, head of research at Global Investment House. The United Arab Emirates, Saudi Arabia and four other Arab Gulf states depend heavily on revenue from oil exports, which still provide about 60% of the regions foreign currency earnings.
Oil prices have more than doubled from lows of about $35 a barrel at the beginning of 2009 as fear of global economic Armageddon has given way to optimism about a recovery led from Asia. New York Mercantile Exchange crude futures averaged just above $62 a barrel in 2009, according to Zawya Dow Jones calculations. Saudi Arabia, the Middle East's economic powerhouse and its biggest oil producer, is expected to see real gross domestic product grow by 3% in 2010, after successfully averting contraction this year, according to Kuwait's Global. The kingdom is expected to record marginal real GDP growth of 0.15% in 2009.....Read the entire article.
Crude oil was higher overnight as it extends the rally off December's low. 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 rally, the reaction high crossing at 81.59 is the next upside target. Closes below the 20 day moving average crossing at 75.59 are needed to confirm that a short term top has been posted.
Monday's pivot point, our line in the sand is 79.51
First resistance is the overnight high crossing at 81.16 Second resistance is the reaction high crossing at 81.59
First support is the 10 day moving average crossing at 77.43 Second support is the 20 day moving average crossing at 75.59
Natural gas was higher due to short covering overnight as it consolidates some of last week's decline and is trading above the 10 day moving average crossing at 5.782. Stochastics and the RSI have turned bearish signaling that sideways to lower prices are possible near term.
Closes below the 20 day moving average crossing at 5.527 are needed to confirm that a short term top has been posted. If February resumes December's rally, the 87% retracement level of the October-December decline crossing at 6.077 is the next upside target.
Monday's pivot point for natural gas is 5.65
First resistance is last Tuesday's high crossing at 6.038 Second resistance is the 87% retracement level of the October-December decline crossing at 6.077
First support is the 20 day moving average crossing at 5.527 Second support is last Thursday's low crossing at 5.505
The U.S. Dollar was lower overnight and is trading below initial support marked by the 10 day moving average crossing at 78.21. Stochastics and the RSI have turned bearish hinting that a short term top might be in or is near.
Closes below the 20 day moving average crossing at 77.52 are needed to confirm that a short term top has been posted. If March renews last month's rally, the 38% retracement level of the 2008-2009 decline crossing at 79.72 is the next upside target.
First resistance is the reaction high crossing at 78.77 Second resistance is the 38% retracement level of the 2008-2009 decline crossing at 79.72
First support is last Tuesday's low crossing at 77.67 Second support is the 20 day moving average crossing at 77.52
Crude oil's rally from 68.59 extends further to as high as 81.16 so far and at this point, intraday bias remains on the upside for 82.0 resistance next. Recent development suggests that medium term rise from 33.2 is still in progress and bring of 82.0 high will bring rise resumption towards next key resistance level at 90. On the downside, below 79.12 minor support will turn intraday bias neutral and bring retreat, probably to 4 hours 55 EMA (now at 77.49). But break of 73.61 support is needed to indicate that crude oil has topped. Outlook short term outlook will now remain bullish.
In the bigger picture, the strong rally from 68.59 and sustained trading above 55 days EMA argues that whole medium term rise from 2009 low of 33.2 is still in progress for another high above 82.0. Above this 82.0 will target next key cluster resistance level at 50% retracement of 147.27 to 33.2 at 90.24, which is close to 90 psychological level. Nevertheless, we'll continue to look for reversal signal as rise from 33.2, which is treated as correction to whole fall from 147.27, is expected to conclude inside 76.77/90.24 fibo resistance zone. On the downside, though, break of 68.59 is needed to revive the case that crude oil has topped out in medium term. Otherwise, outlook will be neutral at worst even in case of deep pull back.
In the long term picture, there is no change in the view that fall from 147.27 is part of the correction to the five wave sequence from 98 low of 10.65. While the rebound from 33.2 is strong and might continue, there is no solid evidence that suggest fall 147.27 is completed and we're still preferring the case that rebound from 33.2 is merely a corrective rise only. Having said that, strong resistance should be seen between 76.77/90.24 fibo resistance zone and bring reversal for another low below 33.2 before completing the whole correction from 147.27.....Nymex Crude Oil Continuous Contract 4 Hours Chart.
Nymex Natural Gas (NG)
A short term top is in place in Natural gas at 6.035 on mild bearish divergence condition in 4 hours MACD. Intraday bias remains neutral for the moment and some more sideway consolidations could be seen below 6.035, with risk of pull back to 38.2% retracement of 4.157 to 6.035 at 5.319. Nevertheless, we'd expect 5.29 resistance turned support to hold and bring rise resumption. Above 6.035 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 is still in progress and should target 38.2% retracement of 13.694 to 2.409 at 6.72 and beyond. On the downside, break of 4.157 support is needed to indicate that medium term rise from 2.409 has completed. Otherwise, outlook is neutral at worst even in case of deep pullback.....Nymex Natural Gas Continuous Contract 4 Hours Chart.
Welcome back everyone! It’s time to buckle up and get ready for another exciting year of trading.
When the market is moving on light volume I tend to focus on very short term plays to minimize my exposure to volatility. The past couple of weeks have been great for day traders and futures trades as we took advantage of the short term seasonal holiday rally in the broad market and also by shorting gold when bounces reached resistance levels.
This year I will be providing many more trades as I focus more on 60 minute trading charts to scalp the market with low risk quick reward setups. Also I will start providing futures trading analysis and signals for those who want to be more active and generate more income on a monthly basis.
DIA – Dow Jones Exchange Traded Fund – 60 Minute Chart The Dow has been trading in this range for a couple weeks providing some excellent short plays. Although I tell members not to short in a bull market, there are times when shorting in a bull market looks and feels right. The past month has been the perfect mix for shorting using the 60 minute charts.
GLD – Gold Exchange Traded Fund – 60 Minute Chart Gold is in a strong bull market but the short term charts have provided over 13 short trades in the past 2 weeks for futures traders playing the bounces to resistance levels. The triangle on the 60 minute chart with declining volume is a continuation pattern of the short term trend which is down.
Because gold is trading near a support level on the daily chart, I am waiting patiently for a perfect setup to go short, or long depending on what happens in the coming hours. I predict lower prices with $102 area for the next support level.
UNG – Natural Gas Fund – 60 Minute Chart Natural gas is trading at resistance on the daily and weekly charts. This 60 minute chart allows us to take a closer look at the intraday momentum which clearly shows there are more sellers than buyers at this level. I see lower prices in the coming hours/days.
UNG not a good fund for holding positions more than 2 weeks, it does provide excellent trading opportunities for day traders and 60 minute chart setups.
USO – Crude Oil Fund – 60 Minute Chart Crude oil had a perfect bounce off of a support level on the weekly and daily charts back on the 14th. Oil is now trading at a short term resistance level and I feel it will head lower in the coming days. We still need more price action before taking a position. Let’s watch and wait.
Trends of Gold, Dow, Oil and Natural Gas Conclusion The broad market and commodities listed above seem to be trading at resistance levels with signs of rolling over. As a technical trader the charts do all the talking and they are pointing to lower prices in the near term which falls in line with my gut feeling that a sharp pullback across the board is lurking in January. Once the big money start getting pushed around again we will know who is in control, buyers or sellers.
Let’s continue to focus on these short term charts to take advantage of any low risk setups which come our way.
Although December’s heavy sell off in the Gold (and Silver) market confirmed a significant set of monthly and weekly cycle highs, highs that may take this metal some time to meet/exceed, there now appears to be plenty of credible technical evidence to suggest that Gold may be ready to mount a minor rebound rally back up toward the $1,125 to $1,135 price zone. There are a couple of key market analysis tools that we can rely on to see if we can both confirm and then capitalize on a possible swing back up to a major Fibonacci resistance zone. Let’s take a closer look right now.
On December 22, March Gold made a major cycle low on its 78 minute chart at $1,075.20 (See point ‘A’ on the chart. Yes, ‘78’ is close to a significant Fibonacci ratio) and then began to slowly reverse higher. The spread between the 50 and 200 period exponential moving averages (EMA’s) was near an extreme at the time of the dead low but have begun to progressively narrow since then. Along with the narrowing spread (which typically indicates a period of price consolidation), March Gold also managed to make a higher swing low (point ‘B’ on the chart) on December 30, 2009. This higher swing low also permitted the plotting of a major uptrend line (gold dashed line), one that will be a wonderful trend determining assist for both intraday and daily based swing traders in the days and weeks to come.
Higher Lows Once the first higher low was made (which was also a cycle low) at point ‘B,’ prices accelerated higher, bouncing back lower after colliding with the 200 period EMA (pink rectangle) before forming yet another higher swing low. Not surprisingly, this fresh 78 minute swing low has allowed us to plot a slightly more aggressive uptrend line (blue dashed line), which, if it should hold, is a prime clue that Gold intends to meet and then likely exceed the 200 day EMA (currently near $1,106) on a close. As most technicians know, a close above the 200 period EMA is a bullish development, and one that a zillion traders and money managers use to determine the long term trend for a given time frame. Additionally, if the 50-period EMA (red line) crosses above the 200 period EMA (blue line) a second bullish confirmation occurs, one known as a ‘Golden Cross.’ Traders frequently wait for a pullback toward the 50-period EMA after such a crossover to initiate new long positions. Should we see this crossover occur, that might also be an excellent way to help time a series of daily or intraday (60 or 78 minute) swing trade(s), looking for Gold to move higher into significant Fibonacci resistance.....Read the entire article
Crude oil rose in New York on optimism fuel demand will increase amid improved prospects for an economic recovery in the U.S., the biggest energy consumer. Oil extended its rally to an eighth day amid forecasts the worst U.S. employment slump since World War II may have almost ended in December. Cold U.S. weather has increased demand for distillates, a category of products that includes heating fuels. “There are further indications that the recovery is progressing,” Ben Westmore, a minerals and energy economist at National Australia Bank in Melbourne, said today. The decline in distillate product supplies is “looking good,” he said. “The market is expecting further draw downs. Hopefully we see that this week.”
Crude oil for February delivery rose 48 cents, or 0.6 percent, to $79.84 a barrel on the New York Mercantile Exchange at 10:44 a.m. Sydney time. It closed at $79.36 on Dec. 31. Prices touched a 2009 low of $32.70 a barrel on Jan. 20 as the recession reduced demand, and reached as high as $82 on Oct. 21, partly because a weaker dollar bolstered the investment appeal of commodities, including gold. Futures climbed 78 percent last year and tripled over the past decade.....Read the entire article.
The commodity sector performed very well in 2009 with the Reuters/ Jefferies CRB Index rising +23% on annual basis. Central banks worldwide reduced policy rates to record low levels and implemented stimulus programs to combat the worst recession since WWII. While it's yet to say the world has exited recession, improvements in economic data have showed that recovery is underway.
Crude Oil
Geopolitical tension, inventory decline, cold weather and strong macro data firmed oil price in the last week of 2009 and paved the way for a good start in 2010. The February contract touched 80 and closed at 79.36 Thursday, up 1.7% on weekly basis. Crude oil experienced a volatile 2009 with price diving to as low as 32.7 in January and then rallying to 82 in October. The annual gain of 78% has marked the best performance since 1999. Both industry-specific and macro data were supportive for crude oil last week. Crude inventory drew -1.54 mmb to 326 mmb in the week ended December 25. This 4th-consecutive weekly decline has brought the stockpile to the lowest level since January. Distillate stockpile also dipped for the 3rd week, by -2.06 mmb, to 159.3 mmb while gasoline stockpile drew -0.37 mmb to 216 mmb.
Economic indicators released over the week indicated recovery is underway. Initial jobless claims dropped to 432K, the lowest level since 2008, (consensus: 455 K) in the week ended December 26 from 452K in the prior week. Moreover, continuing claims also slid -57K. On manufacturing and sentiment fronts, Chicago PMI rose to 60 in December from 56.1 a month ago while consumer confidence improved to 52.9 from 49.5. The data fueled optimism about US' growth in 2010.....Read the entire article on crude oil, natural gas and precious metals.
Heating oil reached a 13 month high as the frigid weather that has drained distillate supplies was projected to extend into January, increasing demand for the motor fuel. The U.S. Climate Prediction Center forecast below normal temperatures from Texas to Maine from Jan. 5 to Jan. 13. Distillate stockpiles fell to the lowest since July, the Energy Department reported yesterday. “Heating oil is going out stronger for the year primarily because they keep extending the cold weather forecast,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut.
Heating oil for January delivery rose a seventh straight day, gaining 0.95 cent, or 0.5 percent, to settle at $2.1188 a gallon on the New York Mercantile Exchange, the highest settlement price since Nov. 4, 2008. Futures advanced 4.1 percent this week and gained 5 percent in December. January contracts for heating oil and gasoline expired at the end of trading today. The more actively traded February heating oil contract fell 0.46 cent to settle at $2.1156. January flipped to a 0.32 cent premium to February, from a discount of 2.06 cents on Dec. 24, indicating tighter supplies.....Read the entire article.
