Crude Oil Daily Technical Outlook For Thursday

Crude oil continues to stay in tight range below 80.51 today and intraday bias remains neutral for the moment. Deeper retreat to 4 hours 55 EMA (now at 78.12) cannot be ruled out. But after all, rise from 69.50 is in favor to continue as long as 75.69 support holds. Above 80.51 will target a retest on 83.95 high. However, note that Break of 75.69 will argue that rebound from 69.50 has completed and will turn focus back to this low.

In the bigger picture, crude oil was supported above mentioned 68.59 key support and thus, there was no confirmation of medium term reversal. The strong rebound from 72.43 dampened our bearish view and argue that medium term rise from 33.2 might not be over yet. Nevertheless, as such rise from 33.2 is treated as a correction to whole decline from 147.27 only, even in case of another high above 83.95, we'd continue to expect strong resistance near to 50% retracement of 147.27 to 33.2 at 90.24 to bring reversal. On the downside, though, break of 69.50 support will now indicate that crude oil has topped out in medium term already and turn outlook bearish..... Nymex Crude Oil Continuous Contract 4 Hours Chart.


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Gold, Silver & Stock Indices on the Verge of Rolling Over?

From guest analyst Chris Vermeulen....

This week has been playing out as we expected. Last week we saw the market rally on light volume into a resistance zone on the daily chart. Light volume rallies are always a warning sign, much like the “Calm before a Storm”.

The way I look at bearish price action....

The First Heavy Selling Volume Day – I see this as large institution selling massive amounts of investments (stocks & commodities) because prices have risen enough for them to book profits OR they know something we don’t and they are getting out before the majority of traders find out.

Light Volume Rally/Drift Higher – After a heavy volume sell off we tend to see prices drift higher on light volume. This is when the institutions stop dumping investments and allow the retail investors (Un-educated Traders) to buy the market back up.

Bear Market Trend – In a down trend we see these two phases enter and exit the market. These patterns happen on every time frame from tick charts to yearly charts. Trends vary in length from 1-2 cycles and sometimes 10-20 cycles and more…

Current Market Conditions

So far this week we have seen the market sell down on increasing volume which is bearish and is pointing to lower prices. On Wednesday we saw prices move up on light volume with volatility rising into the close with a short wave of selling. This was indicating to me that sellers were starting to enter the market again.

The daily chart below clearly shows the heavy selling and drift higher on declining volume. The market is now trading deep into a resistance zone and looking ready to drop.



SP500 Intraday 2 Hour Candle Charts

You can see the same selling patterns repeat themselves. Since the Feb 5th bottom we have been forming a much larger bear flag which makes me think a BIG drop is only days away.



SP500 Trend Trading Conclusion:

Both stocks and precious metals are trading with the same chart patterns and volume levels. So if you are wondering about gold, silver and oil, I am seeing a similar scenario playing out for them also.

The reason I keep bringing these bearish patterns up in my reports is because once you master trading in a down market then you can make money during some of the fasted moving times in the market. I have always preferred shorting the market because prices drop much quicker then they rise. So profits are made quickly.

Also, if the broad market does eventually roll over later this year, and I am not saying it is, but “IF” it does, then you will feel somewhat comfortable with the positions we will be taking.

If you would like to receive these Free Bi-Weekly Trading Reports please visit Chris Vermeulen's The Gold And Oil Guy.

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Crude Oil Bulls Cling to a Near Term Advantage

Crude oil closed higher on Wednesday and remains poised to extend the rally off this month's low. 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 May extends this month's rally, the 75% retracement level of the January-February decline crossing at 81.63 is the next upside target. Closes below the 20 day moving average crossing at 76.60 would confirm that a short term top has been posted.

Crude oil pivot point, our line in the sand is 79.68

First resistance is Monday's high crossing at 81.15
Second resistance is the 75% retracement level of the January-February decline crossing at 81.63

First support is the 10 day moving average crossing at 78.32
Second support is the 20 day moving average crossing at 76.60

Just click here for your FREE trend analysis of crude oil ETF USO

Natural gas closed higher due to short covering on Wednesday as it consolidated some of this week's decline. The mid range close sets the stage for a steady opening on Thursday. Stochastics and the RSI are oversold but remain bearish signaling that sideways to lower prices are possible near term.

If May extends this week's decline, the 87% retracement level of the December-January rally crossing at 4.819 is the next downside target. Closes above the 20 day moving average crossing at 5.293 are needed to confirm that a low has been posted.

Natural gas pivot point for Wednesday evening is 4.861

First resistance is the 10 day moving average crossing at 5.218
Second resistance is the 20 day moving average crossing at 5.293

First support is today's low crossing at 4.859
Second support is the 87% retracement level of the December-January rally crossing at 4.819

Just click here for your FREE trend analysis of natural gas ETF UNG


The U.S. Dollar closed lower due to light profit taking on Wednesday as it consolidates below the 50% retracement level of the 2009 decline crossing at 81.32. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are diverging but are neutral signaling that sideways to higher prices are possible near term.

If March extends this winter's rally, the 62% retracement level of the 2009 decline crossing at 82.92 is the next upside target. Closes below the 20 day moving average crossing at 80.15 are needed to confirm that a short term top has been posted.

First resistance is last Friday's high crossing at 81.43
Second resistance is the 62% retracement level of the 2009 decline crossing at 82.92

First support is Tuesday's low crossing at 80.15
Second support is the 20 day moving average crossing at 80.15


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Phil Flynn: I Have Confidence

I have confidence in sunshine, I have confidence in rain, I have confidence that spring will come again. But confidence in the economy may knock the confidence out of me. Strength may not lie in numbers but the numbers are not showing strength.
What can only be described as a stunning drop in consumer confidence went a long way in shaking the confidence of even the most steadfast bull. The Conference Board, after reporting an increase in consumer confidence last month, posted an ignominious drop from a lofty height of 56.5 reading in January to a pathetic 46.0 reading in the month of February.

What made this number feel even worse was it followed weak business confidence numbers in Germany leading to worries that Europe’s credit woes are having an impact on the business climate throughout the region. The IFO business climate index in Germany fell for the first time in eleven months, to 95.2 from 95.8 in January, below economists' forecast of 96.4 as concerns over Greece debt issues are taking its toll. These dual concerns gave a rise to the dollar and put pressure on commodities across the board as oil seemed to lead many commodities to the downside.

Oh sure it helped that it appeared that the strike in France is over and that the refinery shutdown was going to be settled. The Wall Street Journal Claire Rangel reported that Total said, "it had concluded talks with trade unions at its French refineries that could lead to the end of the strike that began over a week ago. The French oil major pledged to preserve refining operations in France for five years.

Refinery workers were angry over plans by Total to end refining operations at the sprawling Flanders facility near Dunkirk, which the company committed to keeping open in some form or another. However, Total didn't disclose its intentions for the refining operations at the site, which houses other activities.” This is bearish in two ways. One is obvious that France will be refining product. But the other bearish activity is not as obvious.

Increased French refining activity will add to the global glut of refining capacity. The problems with North Sea production and the Buzzard Oil field is an issue that the market can look beyond. Reuters News, quoting a source at the company, said that the North Sea Buzzard oilfield has started to increase output after a period of much diminished production. With production coming back, that will be one less thing that the bulls can hang onto.

Yet ultimately it was the drop in confidence that was the major factor in the big drop in oil. Let’s face it, even the oil bulls have to admit that the price of oil is being supported by confidence as in confidence that the economy will recover at steady inflation free pace and that demand in China will continue to reduce global oil inventories. Or perhaps confidence that OPEC will get back to being compliant in production cuts. Or confidence that the dollar will stay weak forever. This would allow an inflated oil price due to a weak dollar as opposed to traditional measurements of supply and demand. But if that confidence is shaken then oil will tumble.

I have confidence in spring time! And so does the natural gas market that has declared that for all intents and purposes spring has sprung. Natural gas continues to get pummeled ahead of today’s March expiration. Another sign of spring is melting snow. The snow melted and that had people feeling confident to go back to their cars and drive! The MasterCard SpendingPulse reported that gasoline demand rose 5.8 percent last week after last week’s snow induced 16 month low. The report showed demand at an average 9.36 million barrels of gasoline a day.

We are still maintaining our long term bearish outlook for petroleum. We see oil going down to the $40 region. Iran is still a concern as it appears sanctions are on the horizon. Still we feel the path of least resistance is to the down side.

You can contact Phil Flynn at pflynn@pfgbest.com or catch him each day on the Fox Business Network!



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Crude Oil Daily Technical Outlook Wednesday Morning

Intraday bias in crude oil remained neutral for the moment and retreat from 80.51 could extend further to 4 hours 55 EMA (now at 77.69) But still, rise fro 69.50 is in favor to continue as long as 75.69 support holds. Above 80.51 will target a retest on 83.95 high. However, note that Break of 75.69 will argue that rebound from 69.50 has completed and will turn focus back to this low.

In the bigger picture, crude oil was supported above mentioned 68.59 key support and thus, there was no confirmation of medium term reversal. The strong rebound from 72.43 dampened our bearish view and argue that medium term rise from 33.2 might not be over yet. Nevertheless, as such rise from 33.2 is treated as a correction to whole decline from 147.27 only, even in case of another high above 83.95, we'd continue to expect strong resistance near to 50% retracement of 147.27 to 33.2 at 90.24 to bring reversal. On the downside, though, break of 69.50 support will now indicate that crude oil has topped out in medium term already and turn outlook bearish.....Nymex Crude Oil Continuous Contract 4 Hours Chart.


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Oil Rises After Dollar Declines, Report Shows Drop in U.S. Crude Supplies

Crude oil rose in New York after an industry report showed U.S. stockpiles declined and the dollar dropped, increasing the incentive to buy commodities.

Crude inventories fell 3.14 million barrels last week, the American Petroleum Institute said late yesterday. The drop is counter to analysts’ expectations of an increase in a U.S. Energy Information Administration report due today. The dollar snapped two days of gains against the euro as the Federal Reserve will maintain interest rates to support economic growth.

“Everyone is expecting a 2 million barrel build but you’ve got API showing a 3 million barrel draw,” said Clarence Chu, a trader with options dealers Hudson Capital Energy in Singapore. “This is making people nervous but they’re waiting to see the EIA numbers to confirm. The dollar will continue to be significant in terms of moving the market.”

Crude oil for April delivery rose as much as 47 cents, or 0.6 percent, to $79.33 a barrel in electronic trading on the New York Mercantile Exchange. It was at $79.21 at 13:03 p.m. Singapore time. Yesterday, futures declined 1.6 percent to settle at $78.86.

Prices also gained today as the dollar fell against the euro. Fed Chairman Ben S. Bernanke is expected to tell Congress in testimony starting today that the U.S. Federal Reserve’s increase in discount interest rate last week won’t be a prelude to changes in the benchmark borrowing costs. The dollar traded at $1.3534 per euro at 12:47 p.m. Singapore time, from $1.3507 yesterday.....Read the entire article.


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Crude Oil Bulls Lose Round Two, Hold Slight Advantage For Wednesday

Crude oil closed lower due to profit taking on Tuesday as it consolidated some of the rally off this month's low. The low range close sets the stage for a steady to lower 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 May extends this month's rally, the 75% retracement level of the January-February decline crossing at 81.63 is the next upside target. Closes below the 20 day moving average crossing at 76.33 would confirm that a short term top has been posted.

Tuesday evening's pivot point, our line in the sand is 79.26

First resistance is Monday's high crossing at 81.15
Second resistance is the 75% retracement level of the January-February decline crossing at 81.63

First support is the 10 day moving average crossing at 77.78
Second support is the 20 day moving average crossing at 76.33

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Natural gas closed lower on Tuesday as it extends last Friday's breakout below the lower boundary of this month's trading range, which crosses at 5.060. The low range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are oversold but remain bearish signaling that sideways to lower prices are possible near term.

If March extends this week's decline, the 87% retracement level of the December-January rally crossing at 4.734 is the next downside target. Closes above the 20 day moving average crossing at 5.281 are needed to confirm that a low has been posted.

Natural gas pivot point for Tuesday evening is 4.856

First resistance is the 10 day moving average crossing at 5.221.
Second resistance is the 20 day moving average crossing at 5.281.

First support is today's low crossing at 4.773
Second support is the 87% retracement level of the December-January rally crossing at 4.734

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The U.S. Dollar closed higher on Tuesday ending a two day correction off last Friday's high but remains below the 50% retracement level of the 2009 decline crossing at 81.32. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are diverging but are neutral to bullish signaling that sideways to higher prices are possible near term.

If March extends this winter's rally, the 62% retracement level of the 2009 decline crossing at 82.92 is the next upside target. Closes below the 20 day moving average crossing at 80.04 are needed to confirm that a short term top has been posted.

First resistance is last Friday's high crossing at 81.43
Second resistance is the 62% retracement level of the 2009 decline crossing at 82.92

First support is today's low crossing at 80.15
Second support is the 20 day moving average crossing at 80.04



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Tension Builds As British Start Drilling For Oil In Contested Falkland Islands

The most hotly contested piece of land in the world has just discovered oil.

British oil and gas exploration company Desire Petroleum started drilling today sixty miles off coast of the Falkland Islands. The South Atlantic territory may contain 3.5 billion barrels of oil and significant quantities of natural gas, according to CNN.

But the enterprise risks reigniting a sovereignty dispute between Argentina and the UK, which led to a two month war in 1982.

Although the islands are occupied by British troops and pay tribute to the Queen, they are self governed and self supporting.

President Cristina Fernandez has ruled out any military action to stop the drilling, according to the AP. However, she is leading a diplomatic campaign that may face the emergent powers of Latin America against the lame duck empire.

Argentina has unilateral regional support in its claim to the islands, including the vociferous backing of Venezuela's Hugo Chavez.

Reuters:
"The British are desperate for oil since their own fields in the North Sea are now being depleted," Chavez said in a televised speech. When will England stop breaking international law? Return the Malvinas to Argentina!"

"The English are desperate, the Yankees are desperate and here we have the biggest petroleum reserves in the world," Chavez said.



Author Gus Lubin is a writer at The Business Insider





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New Video: Looking At Silver for All the Wrong Reasons

Late in 2009 a lot of folks began asking us about buying silver instead of gold. At the time, we stated exactly how we felt, in that, why would you try to buy something that is not in the same league as gold? The two markets are completely different and are driven by a different set of emotions and fundamentals.

This is the first video that we have done on silver in quite some time, but we think it's an important one for you to see.

One of the standout features that I noticed was the fact that when gold was making new all time highs in early December, silver failed to take out the March 2008 high. I consider this to be a negative.

In this short video you will very quickly see how we feel about silver and how you can benefit from looking at this market from a different perspective.

As always our videos are free to watch and there are no registration requirements. We hope you find this video both informative, educational, and enjoyable and that you have time to leave a comment.


Good trading,
The Crude Oil Trader




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Crude Oil Drops More Than $2 as U.S. Consumer Confidence Falls

Crude oil fell more than $2 a barrel as confidence among U.S. consumers dropped in February to the lowest level in 10 months, a signal that energy demand may be slow to recover.

Oil for April delivery decreased as much as 2.6 percent from a five week high as the Conference Board’s confidence index weakened to 46, lower than anticipated, from a revised 56.5 in January. A report earlier today showed German business confidence declined for the first time in 11 months in February.

“This is a huge drop from the Conference Board,” said Phil Flynn, vice president of research at PFGBest in Chicago. “If consumers are going back into the hole, the likelihood of gasoline demand being strong is pretty weak.”

Crude oil for April delivery declined $1.94, or 2.4 percent, to $78.37 a barrel at 10:15 a.m. on the New York Mercantile Exchange. Earlier, it touched $78.22 a barrel.
Yesterday, the March contract expired at $80.16, capping a five day rally of 8.1 percent.

The Ifo institute in Munich reported earlier today that its business climate index, based on a survey of 7,000 executives, fell to 95.2 from 95.8 in January. Economists expected a gain to 96.1, according to the median of 37 forecasts in a Bloomberg News survey.....Read the entire article.


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Traders Come to Their Senses, Crude Oil Trades Sharply Lower

Crude oil plummets in European session as investors see price above 80 not justifiable with weak fundamentals. Crude oil traded sharply lower due to profit taking overnight as it consolidates some of this month's rally. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term.

If May extends this month's rally, the 75% retracement level of the January-February decline crossing at 81.63 is the next upside target. Closes below the 20 day moving average crossing at 76.32 would confirm that a short term top has been posted.

Tuesday's pivot point, our line in the sand is 80.25

First resistance is Monday's high crossing at 81.15
Second resistance is the 75% retracement level of the January-February decline crossing at 81.63

First support is the 10 day moving average crossing at 77.77
Second support is the 20 day moving average crossing at 76.32

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Natural gas was lower overnight as it extends last week's decline. Stochastics and the RSI are oversold but remain bearish signaling that sideways to lower prices are possible near term.

If March extends the overnight decline, the 87% retracement level of the December-January rally crossing at 4.734 is the next downside target. Closes above the 20 day moving average crossing at 5.285 would confirm that a short term low has been posted.

Natural gas pivot point for Tuesday is 4.904

First resistance is Monday's gap crossing at 5.008
Second resistance is broken trading range support crossing at 5.060

First support is Monday's low crossing at 4.841
Second support is the 87% retracement level of the December-January rally crossing at 4.734

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The U.S. Dollar was higher overnight hinting that the two day correction off last Friday's high might be ending. Despite the overnight rally, March remains below the 50% retracement level of the 2009 decline crossing at 81.32. Stochastics and the RSI are diverging but are neutral hinting that a short term top might be in or is near.

Closes below the 20 day moving average crossing at 80.03 are needed to confirm that a short term top has been posted. If March extends this winter's rally, the 62% retracement level of the 2009 decline crossing at 82.92 is the next upside target.

First resistance is last Friday's high crossing at 81.43
Second resistance is the 62% retracement level of the 2009 decline crossing at 82.92

First support is the 20 day moving average crossing at 80.03
Second support is last Wednesday's low crossing at 79.61

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Crude Oil Daily Technical Outlook For Tuesday

With 4 hours MACD crossed below signal line again, an intraday top is in place at 80.51 and bias is turned neutral. Some consolidations could be seen, with risk of retreat to 4 hours 55 EMA (now at 77.40). But downside should be contained above 75.69 support and bring another rise. Above 80.51 will target a retest on 83.95 high. However, note that Break of 75.69 will argue that rebound from 69.50 has completed and will turn focus back to this low.

In the bigger picture, crude oil was supported above mentioned 68.59 key support and thus, there was no confirmation of medium term reversal. The strong rebound from 72.43 dampened our bearish view and argue that medium term rise from 33.2 might not be over yet. Nevertheless, as such rise from 33.2 is treated as a correction to whole decline from 147.27 only, even in case of another high above 83.95, we'd continue to expect strong resistance near to 50% retracement of 147.27 to 33.2 at 90.24 to bring reversal. On the downside, though, break of 69.50 support is now needed to indicate that crude oil has topped out.....Nymex Crude Oil Continuous Contract 4 Hours Chart.


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Where is Crude Oil Headed on Tuesday?

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




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Crude Oil Bulls Continue to Maintain Slight Near Term Advantage

Crude oil closed higher on Monday as it extends the rally off this month'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 bullish signaling that sideways to higher prices are possible near term.

If March extends this month's rally, the 75% retracement level of the January-February decline crossing at 80.72 is the next upside target. Closes below the 20 day moving average crossing at 75.30 would confirm that a short term top has been posted.

First resistance is today's high crossing at 80.51
Second resistance is the 75% retracement level of the January-February decline crossing at 80.72

First support is the 10 day moving average crossing at 76.30
Second support is the 20 day moving average crossing at 75.30

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Natural gas gapped down and closed lower on Monday as it extended last Friday's breakout below the lower boundary of this month's trading range, which crosses at 5.060. The low range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term.

If March extends today's decline, the 87% retracement level of the December-January rally crossing at 4.734 is the next downside target. Closes above the 20 day moving average crossing at 5.323 are needed to confirm that a low has been posted.

First resistance is the 10 day moving average crossing at 5.265
Second resistance is the 20-day moving average crossing at 5.323

First support is today's low crossing at 4.841
Second support is the 87% retracement level of the December-January rally crossing at 4.734

Is Gold Poised to Go Higher or Lower?

The U.S. Dollar closed lower on Monday due to profit taking as it consolidates below the 50% retracement level of the 2009 decline crossing at 81.32. The mid range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI are diverging but are turning neutral to bullish signaling that sideways to higher prices are possible near term.

If March extends this winter's rally, the 62% retracement level of the 2009 decline crossing at 82.92 is the next upside target. Closes below the 20 day moving average crossing at 79.93 are needed to confirm that a short term top has been posted.

First resistance is last Friday's high crossing at 81.43
Second resistance is the 62% retracement level of the 2009 decline crossing at 82.92

First support is the 10 day moving average crossing at 80.31
Second support is the 20 day moving average crossing at 79.93

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Crude Oil Fluctuates Near $80 a Barrel on Total Strike and Dollar's Increase

Oil fluctuated near $80 a barrel as strikes at Total SA refineries and depots in France supported prices of refined products such as gasoline and the dollar strengthened against the euro. Oil rose to a five week high after gasoline futures gained as much as 2 percent amid union calls on Total workers to extend walkouts. The dollar’s advance makes oil and other commodities less attractive as an alternative investment.

“Once you get up to the $80 level, it’s just having trouble maintaining that,” said Kyle Cooper, a managing director at energy consultant IAF Advisors in Houston. Demand from industrialized countries “just doesn’t support it. I think we’re stuck in a very broad range of $70 to $80 until something decisive happens.”

Crude oil for March delivery increased 27 cents to $80.08 a barrel at 1:46 p.m. on the New York Mercantile Exchange. Earlier it touched $80.51, the highest price since Jan. 13. The March contract expires at the close of trading today. The more-active April contract gained 27 cents to $80.33.

Workers at Total’s six French oil-processing plants and six of its 31 storage depots have been on strike since Feb. 16 to protest against the permanent shutdown of refining at its Flanders plant in northern France. The strike comes as weak demand has curtailed refinery production worldwide.

“When you have that coupled with the situation in the U.S. with the low run rates, it’s constructive for the overall market,” said John Kilduff, a partner at Round Earth Capital, a New York based hedge fund that focuses on food and energy commodities.....Read the entire article.

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Schlumberger To Buy Smith International In $11 Billion Dollar Deal

Schlumberger Ltd. (SLB) will acquire Smith International (SII) for about $11 billion in an all stock deal that is the year's largest acquisition and will make Schlumberger by far the world's biggest oilfield services company.

The deal, which the companies announced Sunday, will cement Schlumberger's position atop the oil services industry, which helps oil producers locate and drill for oil deposits. After the deal, Schlumberger, already the biggest company in the sector by revenue and market value, would have revenues double that of its nearest rival, Halliburton Co. (HAL), although most analysts expect Schlumberger to sell some assets for antitrust or other reasons.

Under the terms of the deal, Smith shareholders will receive 0.6966 Schlumberger share for each Smith share they own, a 37.5% premium over Smith's share price on Thursday, when news of the deal was first reported. The deal, which must still be approved by shareholders of both companies, is expected to close in the second half of this year. Smith shareholders would own about 12.8% of the combined company.

The $11 billion price tag, which values Smith at $44.51 per share based on Friday's close, was higher than most analysts expected. Dan Pickering, an analyst for energy focused investment bank Tudor Pickering Holt & Co., said some Schlumberger shareholders might also have preferred a cash and stock deal to an all stock deal. But he said the deal makes sense for Schlumberger, which will now be able to package Smith's products with its own services to win more business.


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Crude Oil Bulls Cling to Overbought Conditions, Here's Monday's Numbers

Crude oil opened higher this morning and traded higher overnight as it extends this month's rally. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term.

If March extends this month's rally, the 75% retracement level of the January-February decline crossing at 80.72 is the next upside target. Closes below the 20 day moving average crossing at 75.29 would confirm that a short term top has been posted.

Monday's pivot point, our line in the sand is 79.50

First resistance is the overnight high crossing at 80.51
Second resistance is the 75% retracement level of the January-February decline crossing at 80.72

First support is the 10 day moving average crossing at 76.27
Second support is the 20 day moving average crossing at 75.29

Just click here for your FREE trend analysis of crude oil ETF USO

Natural gas gapped down and was lower overnight as it extends last Friday's decline below the lower boundary of this winter's trading range crossing at 5.060. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term.

If March extends the overnight decline, the 87% retracement level of the December-January rally crossing at 4.734 is the next downside target. Closes above the 20 day moving average crossing at 5.324 would confirm that a short term low has been posted.

Natural gas pivot point for Monday is 5.073

First resistance is broken trading range support crossing at 5.060
Second resistance is the 10 day moving average crossing at 5.267

First support is the overnight low crossing at 4.911
Second support is the 87% retracement level of the December-January rally crossing at 4.734

Just click here for your FREE trend analysis of natural gas ETF UNG

The U.S. Dollar was lower due to profit taking overnight as it consolidates below the 50% retracement level of the 2009 decline crossing at 81.32. Stochastics and the RSI are diverging but 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 79.93 are needed to confirm that a short term top has been posted. If March extends this winter's rally, the 62% retracement level of the 2009 decline crossing at 82.92 is the next upside target.

First resistance is last Friday's high crossing at 81.43
Second resistance is the 62% retracement level of the 2009 decline crossing at 82.92

First support is the 10 day moving average crossing at 80.31
Second support is the 20-day moving average crossing at 79.93

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The Dollar & Gold – What’s Next?

From guest analyst Chris Vermeulen....

Last week was strong with stocks and commodities moving up sharply. As nice as it was to see a rally, I still have my doubts whether this move has legs behind it. As prices moved higher throughout the week we saw volume become thinner and thinner.

Basic technical analysis of the recent price action, when looking at the hourly charts is pointing to a sharp pullback. The indexes, gold and silver have both rallied (drifted) higher on declining volume as they near resistance.

Let’s take a quick look at the US Dollar and Gold Charts
The US Dollar has been in a strong rally since the last week of December. The once easy money trade (short the Dollar) has been over for a couple of months but it may be another good trade if gold is rejected here at the 50% retracement level.

The next month or so will be interesting to see whether the dollar will continue to rally or drop like a rock as traders sell Dollars for another easy short trade. There is not much we can do here other than wait for a setup on the daily and hourly charts to form.

US Dollar – Weekly Chart



GLD – Gold Daily Chart
Gold still looks very bullish. Actually, the more gold pulls back the more I like the chart. This daily chart shows a very nice bull flag. The price is currently testing the upper trend channel line and this is what makes me think we are going to see a pop in gold prices or a sharp drop.

I would like to see gold pullback one more time and make a new multi-week low before heading higher. We did see extreme fear in the market 2 weeks ago which is when we took some long positions, but the lighter volume rally is not giving me comfort in adding more positions at this time.



Weekend Trading Conclusion:
In short, we nailed the market bottom on February 5th taking some long positions in US and Canadian ETF’s. I tightened our protective stops for these positions a couple days later making sure to protect our hard earned money. The Canadian trades have performed extremely well for us.

Now we just wait for another low risk entry point which could happen this week depending on what the market does.



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Crude Oil Trades Near a Five Week High on Speculation Demand Is Increasing

Crude oil traded near a five week high on speculation energy demand will increase as the global economy recovers from its worst recession since World War II. Global consumption may increase by as much as 1.4 million barrels a day in the second half, Iran’s OPEC governor Mohammad Ali Khatibi said in an interview on the Shana Web site yesterday. Prices pared early gains as the dollar traded little changed after posting its sixth straight weekly increase against the euro, the longest streak since 2000.

“That growth story suggests that oil prices will continue to firm as the global economy recovers,” said Toby Hassall, research analyst with CWA Global Markets Pty in Sydney. “But that firming dollar, if it does continue, that will keep prices fairly well in check.” Crude oil for March delivery rose as much as 30 cents, or 0.4 percent, to $80.11 a barrel in after hours electronic trading on the New York Mercantile Exchange. It was at $80.06 at 7:55 a.m. in Singapore.

The contract, which expires today, rose 0.9 percent to $79.81 on Feb. 19, the highest settlement since Jan. 12. The more actively traded April contract rose 31 cents to $80.37 today. Oil prices climbed 7.7 percent last week, the biggest gain since October, as U.S. refiners lifted operating rates for a second week and the Federal Reserve increased its discount rate for the first time in three years amid signs of recovery in the nation’s economy.....Read the entire article.


Secrets of the 52 Week High Rule


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Crude Oil Weekly Technical Outlook

Crude oil's rise from 69.50 extended further to as high as 80.10 last week and closed strongly at 79.81. The stronger than expected rebound and break of 78.04 resistance suggests that fall from 83.95 has finished with three waves down to 69.50 already. This in turn argues that 83.95 might not be the top yet. Initial bias remains on the upside this week and further rise could be seen to retest 83.95 first. On the downside, below 77.76 minor support will turn intraday bias neutral and bring retreat towards 4 hours 55 EMA (now at 76.24). However, note that break of 72.66 support is needed to indicate that rise from 69.50 has completed. Otherwise, another rise would be in favor.

In the bigger picture, crude oil was supported above mentioned 68.59 key support and thus, there was no confirmation of medium term reversal. The stronger rebound from 72.43 dampened our bearish view and argue that medium term rise from 33.2 might not be over yet. Nevertheless, as such rise from 33.2 is treated as a correction to whole decline from 147.27 only, even in case of another high above 83.95, we'd continue to expect strong resistance near to 50% retracement of 147.27 to 33.2 at 90.24 to bring reversal. On the downside, though, break of 72.43 support is now needed to indicate that crude oil has topped out.

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.


Secrets of the 52 Week High Rule


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