Crude Oil Weekly Technical Outlook

Crude oil edged higher to 78.15 last week but failed to sustain gain there. With 4 hours MACD staying below signal line, initial bias is neutral this week. While another rise cannot be ruled out with 74.23 minor support intact. We'd continue to expect upside to be limited by 79.38 resistance and bring fall resumption. On the downside, below 74.23 will flip intraday bias back to the downside. Further break of 71.09 will confirm that fall from 79.38 has resumed. Also this will affirm our view that choppy recovery from 64.23 has completed at 79.38 already and should target 64.23 support next.

In the bigger picture, recovery from 64.23 is treated as a correction to fall from 87.15 and has possibly completed at 79.38 already. Break of 71.09 support will indicate that decline from 87.15 is likely resuming. This will also revive the bearish case that whole medium term rise from 33.2 is finished at 87.15, just ahead of 50% retracement of 147.27 to 33.2 at 90.24. In such case, we'd see another fall to 50% retracement of 33.2 to 87.15 at 60.18 at least.

In the long term picture, current development suggests that rebound from 33.2 is finished at 87.15, inside 76.77/90.24 fibo resistance zone as expected. Our view is that fall fro 87.15 would develop into the third falling leg of the whole correction from 147.27 and hence, we'd anticipate an eventual break of 33.2 low in the long term as such correction extends.

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Phil Flynn: Capped!

Great News for the oil industry and all of America and the world! The leak in the Gulf is capped! Finally for the first time since the Deep Water Horizon exploded back in April there is no oil leaking from that deepwater well. Still BP and the government are not celebrating just yet. The company still is worried that higher pressure inside the well could cause of explosions in other parts of the pipeline and is monitoring the well by checking pressure every 6 hours. Let’s keep our fingers crossed and say a prayer.

Of course what traders really want to know if the upside in oil is capped? Over the last few days the oil market seems to have taken a leadership role in leading the stock market higher and the rest of the world lower. As of late oil traders are taking a more skeptical take on the global economic recovery because despite the slew of good feelings that permeated the marketplace to start the week in the oil patch the facts just does not back those gushy feelings up. The week of old fashion supply and demand fundamentals for the oil market does not bode well for the upside of the oil market or for the economic recovery over all.....Read the entire article.

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Crude Oil Falls for Third Day on Concern Slowing Economic Recovery to Cut Demand

Crude oil fell for a third day in New York on speculation that the U.S. economic recovery is slowing, reducing fuel demand in the world’s biggest energy consuming country. Oil slipped as much as 1.6 percent and equities tumbled after an index of preliminary consumer sentiment declined to the lowest level since 2009. Prices retreated yesterday as manufacturing in New York and Pennsylvania dropped, part of a nationwide decline in factory production of 0.4 percent in June.

“Oil should be a lot lower than it is,” said Peter Beutel, president of trading advisory company Cameron Hanover Inc. in New Canaan, Connecticut. “We’ve had some very bearish stuff come out about the economy this week.” Crude oil for August delivery slipped 42 cents, or 0.6 percent, to $76.20 a barrel at 10:57 a.m. on the New York Mercantile Exchange. Futures are little changed this week. Brent crude oil for September settlement fell 63 cents, or 0.8 percent, to $75.46 on the London based ICE Futures Europe exchange.

Oil in New York has traded in a range of $8.29 for the past month, from $71.09 to $79.38 a barrel. “We’re stuck in a $70 to $80 range and looking for a strong signal to exit it in either direction,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “It will take evidence that the recovery is gathering momentum to move us higher, and any signs pointing to continued sluggishness and weak demand will move us lower”.....Read the entire article.

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Crude Oil and Natural Gas Commentary For Friday Morning

Crude oil was higher overnight as it consolidates above the 20 day moving average crossing at 76.07. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term.

If August extends this month's rally, the reaction high crossing at 79.38 is the next upside target. Closes below Tuesday's low crossing at 74.25 would temper the near term friendly outlook.

First resistance is Wednesday's high crossing at 78.15
Second resistance is the reaction high crossing at 79.38

Crude oil pivot point for Friday morning is 76.54

First support is Tuesday's low crossing at 74.25
Second support is the reaction low crossing at 71.09

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Natural gas was slightly higher overnight as it extends Thursday's rally above the 10 day moving average. Stochastics and the RSI are turning bullish signaling that sideways to higher prices are possible near term.

Closes above the 20 day moving average crossing at 4.650 would confirm that a short term low has been posted. If August extends the decline off June's high, the reaction low crossing at 4.285 is the next downside target.

First resistance is Thursday's high crossing at 4.623
Second resistance is the 20 day moving average crossing at 4.650

Natural gas pivot point for Friday morning 4.499

First support is Thursday's low crossing at 4.288
Second support is the reaction low crossing at 4.285

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New Video: Did the "Death Cross" Die, or is it Still Alive in the S&P 500?

The sharp upward rally in the S&P 500 surprised many people, myself included. However, the rally did not change the "Death Cross" which we pointed out as being a negative and significant market event that does not occur very often.

This market's rally also did not change our weekly and monthly "Trade Triangles" which are still red and indicating that the trend is headed lower.

In this short two minute video, we show you some other aspects of the S&P 500 that we think you should be watching. As always our videos are free to watch and there are no registration requirements.

We would love to hear your comments about this or any of our other market videos.

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New Video: EUO, What is it and Where's it Headed?

Here's an ETF that you may want to take a look at....

We just finished a new short video on an ETF that's looking very interesting. The video runs a little over two minutes and gets right to the meat and potatoes of this market.

This particular ETF is leveraged and trades almost 2,000,000 shares a day, so it is nice and liquid. What makes this ETF so interesting, is that it plays such a big part on the financial world stage.

As always our videos are free to watch and there are no registration requirements.

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Crude Oil Consolidates Above 20 Day Moving Average, Natural Gas Extends Decline

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

If August extends this month's rally, the reaction high crossing at 79.38 is the next upside target. Closes below Tuesday's low crossing at 74.25 would temper the near term friendly outlook.

First resistance is Wednesday's high crossing at 78.15
Second resistance is the reaction high crossing at 79.38

Crude oil pivot point for Thursday morning is 77.19

First support is Tuesday's low crossing at 74.25
Second support is the reaction low crossing at 71.09

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

If August extends the decline off June's high, the reaction low crossing at 4.285 is the next downside target. Closes above the 20 day moving average crossing at 4.667 would confirm that a short term low has been posted.

First resistance is the 10 day moving average crossing at 4.494
Second resistance is the 20 day moving average crossing at 4.667

Natural gas pivot point for Thursday morning is 4.333

First support is the overnight low crossing at 4.301
Second support is the reaction low crossing at 4.285

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Crude Oil Pares Losses as U.S. Inventory Drops More Than Analysts Forecast

Crude oil fluctuated, rebounding from earlier losses, after a U.S. government report showed that inventories declined three times as much as expected last week and refineries bolstered operating rates to a two year high. Supplies fell 5.06 million barrels, or 1.4 percent, to 353.1 million, the most since September, according to the Energy Department. Stockpiles were forecast to slip 1.5 million barrels, a Bloomberg News survey showed. Refineries operated at 90.5 percent of capacity, the highest level since January 2008.

“A 5 million draw in crude oil supplies is pretty bullish any way you look at it,” said Carl Larry, president of Oil Outlooks and Opinions LLC in Houston. “The outlook for prices is still higher, unless the economy continues to just trudge along.” Crude oil for August delivery rose 2 cents to $77.17 a barrel at 11:10 a.m. on the New York Mercantile Exchange. Oil traded at $76.62 before the release of the report at 10:30 a.m. in Washington.

Brent crude for August settlement increased 23 cents, or 0.3 percent, to $76.88 a barrel on the London based ICE Futures Europe exchange. August Brent futures expire tomorrow. The more active September contract rose 10 cents to $76.83 a barrel.

Retail Sales Drop

Prices also dropped as sales at U.S. retailers fell in June for a second month, indicating the pace of economic recovery moderated heading into the second half of 2010. Purchases decreased a more than projected 0.5 percent following a 1.1 percent May drop, Commerce Department figures showed today in Washington. Retail sales were projected to fall 0.3 percent after a 1.2 percent drop previously reported for May, according to the median estimate of 75 economists in a Bloomberg News survey.

Excluding auto dealers, demand fell 0.1 percent, matching the median forecast of economists surveyed. Industrial production in the 16-member euro region increased less than forecast in May as the economy struggled to gather strength. Output climbed 0.9 percent from the previous month, when it also increased 0.9 percent, the European Union statistics office in Luxembourg said today. Economists forecast output to rise 1.2 percent, according to the median of 27 estimates in a Bloomberg News survey.

Reporter Mark Shenk can be contacted at mshenk1@bloomberg.net.

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Crude Oil and Natural Gas Technical Outlook Wednesday Morning

Crude oil was lower due to profit taking overnight as it consolidates above the 20 day moving average crossing at 76.23. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term.

If August extends this month's rally, the reaction high crossing at 79.38 is the next upside target. Closes below Tuesday's low crossing at 74.25 would temper the near term friendly outlook.

First resistance is Tuesday's high crossing at 77.37
Second resistance is the reaction high crossing at 79.38

Crude oil pivot point for Wednesday morning is 76.26

First support is Tuesday's low crossing at 74.25
Second support is the reaction low crossing at 71.09

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

If August extends the decline off June's high, the reaction low crossing at 4.285 is the next downside target. Closes above the 20 day moving average crossing at 4.706 would confirm that a short term low has been posted.

First resistance is the 10 day moving average crossing at 4.529
Second resistance is the 20 day moving average crossing at 4.706

Natural gas pivot point for Wednesday morning is 4.392

First support is Tuesday's low crossing at 4.334
Second support is the reaction low crossing at 4.285

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Crude Oil and Natural Gas Technical Outlook For Tuesday Morning

Crude oil was higher overnight as it consolidates above the 10 day moving average crossing at 74.45. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term.

Closes above the 20 day moving average crossing at 76.19 are needed to confirm that a short term low has been posted. If August resumes the decline off June's high, the reaction low crossing at 70.93 is the next downside target.

First resistance is the 20 day moving average crossing at 76.19
Second resistance is the reaction high crossing at 79.38

Crude oil pivot point for Tuesday morning is 75.30

First support is last Tuesday's low crossing at 71.09
Second support is the reaction low crossing at 70.93

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

If August extends the decline off June's high, the reaction low crossing at 4.285 is the next downside target. Closes above the 20 day moving average crossing at 4.752 would confirm that a short term low has been posted.

First resistance is the 10 day moving average crossing at 4.553
Second resistance is the 20 day moving average crossing at 4.752

Natural gas pivot point for Tuesday morning is 4.398

First support is last Friday's low crossing at 4.339
Second support is the reaction low crossing at 4.285

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Phil Flynn: A Penny Saved Is A Penny Earned

A penny saved is a penny earned but enough about copper let's talk aluminum. Alcoa set a good tone for the energy markets as they kicked off the earnings season with some better than expected numbers. Yesterday oil prices fell back as the market awaited earnings from Alcoa yet it seems that they were worried about nothing. The Wall Street Journal said, “Alcoa swung to a profit in the second quarter on improved demand and prices after the aluminum producer struggled with anemic prices for the metal a year earlier. Although the price of aluminum has fallen about 12% in 2010, Alcoa offset that drop with a jump in volume, driving a 6% sequential increase to higher than expected revenue.

It also said that better productivity, foreign exchange benefits and lower energy costs contributed to the revenue climb. The top and bottom line growth was driven by higher volumes from stronger end markets and ccontinued gains from our productivity programs," according to Chairman and Chief Executive Klaus Kleinfeld.” The good earnings results set a nice tone and oil responded as it will to the slew of other numbers ahead of us. The market may also focus on the latest report from the International Energy Agency. The IEA, in their latest report, says they expect world oil demand in 2011 to grow by 1.3 million barrels per day. At the same time they expect the demand from China to slow.....Read the entire article.

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New Video: Is it Time for the Dollar Index to Rally?

The dollar index, which put in a strong performance in the first six months of the year, pulled back from its recent highs and appears to be in defensive mode.

If you are not familiar with the US dollar index (USDX), it is an index, or measure, of the value of the United States dollar relative to a basket of foreign currencies. Its weighted geometric mean of the dollar's value is compared with these currencies in the following percentages:

* Euro (EUR), 57.6% weight
* Japanese yen (JPY), 13.6% weight
* Pound sterling (GBP), 11.9% weight
* Canadian dollar (CAD), 9.1% weight
* Swedish krona (SEK), 4.2% weight
* Swiss franc (CHF) 3.6% weight

In this short educational video, we point out what we see in the dollar index and the reason why we think a potential rally may be in the foreseeable future.

As always our videos are free to watch and there is no need for registration. If you'd like to make a comment on this or any of our videos, we enjoy hearing your thoughts.


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Crude Oil and Natural Gas Market Commentary For Monday Morning

Crude oil was lower due to profit taking overnight as it consolidates some of last week's rally. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term.

Closes above the 20 day moving average crossing at 76.27 are needed to confirm that a short term low has been posted. If August resumes the decline off June's high, the reaction low crossing at 70.93 is the next downside target.

First resistance is the 20 day moving average crossing at 76.27
Second resistance is the reaction high crossing at 79.38

Crude oil's pivot point for Monday is 75.86

First support is last Tuesday's low crossing at 71.09
Second support is the reaction low crossing at 70.93

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

If August extends the decline off June's high, the reaction low crossing at 4.285 is the next downside target. Closes above the 20 day moving average crossing at 4.786 would confirm that a short term low has been posted.

First resistance is the 10 day moving average crossing at 4.588
Second resistance is the 20 day moving average crossing at 4.786

Natural gas pivot point for Monday is 4.399

First support is last Friday's low crossing at 4.339
Second support is the reaction low crossing at 4.285

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Crude Oil Declines From One Week High as Traders Sell Futures to Lock in Gains

Crude oil fell in New York for the first time in four days as traders sold contracts to lock in gains following a rally to a one week high above $76 a barrel. Oil rose earlier as China, the world’s second largest energy consumer, reported crude imports reached a record in June. Retail sales in the U.S., the biggest energy user, probably fell in June for a second month and industrial production cooled, signs the expansion will moderate in the second half, economists said before reports this week.

“Some profit taking is coming into the market,” said Ken Hasegawa, a commodity derivatives sales manager at broker Newedge Group in Tokyo. “From a technical point of view, $76.50 near last week’s highs is around a level to sell. This market will continue to be range bound.”

Crude for August delivery dropped as much as 49 cents, or 0.6 percent, to $75.60 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $75.64 at 2:22 p.m. Singapore time, earlier reaching $76.43. Futures, up 27 percent in the past year, have lost 4.7 percent in 2010.

China’s net crude purchases climbed to 22.14 million metric tons in June, beating the previous record of 20.98 million tons in April, according to preliminary data from the General Administration of Customs on July 10. Imports surged 30 percent in the first half of this year on higher demand and lower costs. The country paid an average of $77.20 a barrel for crude in June, compared with $82.50 in May.....Read the entire article.

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Is Gold About To Rocket and SP500 Tank?

Last week we saw stocks move sharply higher as traders started to cover their short position which added fuel to an already oversold market ready to bounce. Overall volume was not that strong on the move up which is a bearish sign. On Friday afternoon we saw the SP500 continue to move into the $1075 resistance level on very light volume. This indicates to me that buyers are not willing to pay these higher prices because the market has moved up so quickly and the fact that it’s trading at a resistance level.

I feel the market will gap higher on Monday just like we say on June 20/21 deep into a resistance level and the big money will short the pop sending it sharply lower. Gold looks to be shifting its momentum from a down trend to an uptrend as it forms a reverse head & shoulders pattern.

Weekend Conclusion:

In short is looks as thought the market is at a critical pivot point. We could see prices stall out here and continue the down trend or see strong buying step in sending prices higher in the equities market. We need to wait and see what type of price action unfolds in the coming days.

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Crude Oil Weekly Technical Outlook

Crude oil edged lower to 71.09 last week but formed a short term bottom and recovered. Further rise might be seen initially this week but we'd expect upside to be limited by 79.38 resistance and bring fall resumption. At this point, we still favor that case that choppy recovery from 64.23 has completed at 79.38 already. Below 71.09 will target a retest on 64.23.

In the bigger picture, recovery from 64.23 is treated as a correction to fall from 87.15 and has possibly completed at 79.38 already. Break of 69.51 will indicate that decline from 87.15 is likely resuming. This will also revive the bearish case that whole medium term rise from 33.2 is finished at 87.15, just ahead of 50% retracement of 147.27 to 33.2 at 90.24. In such case, we'd see another fall to 50% retracement of 33.2 to 87.15 at 60.18 at least.

In the long term picture, current development suggests that rebound from 33.2 is finished at 87.15, inside 76.77/90.24 fibo resistance zone as expected. Our view is that fall fro 87.15 would develop into the third falling leg of the whole correction from 147.27 and hence, we'd anticipate an eventual break of 33.2 low in the long term as such correction extends.....Read the entire article.

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Commodities Commentary For Friday Evening

Crude oil closed higher on Friday as it extends this week's rally. The high range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI have turned bullish signaling that sideways to higher prices are possible near term. Closes above the 20 day moving average crossing at 76.19 are needed to confirm that a short term low has been posted. If August resumes last week's decline, the reaction low crossing at 70.93 is the next downside target. First resistance is today's high crossing at 76.48. Second resistance is the reaction high crossing at 79.38. First support is Tuesday's low crossing at 71.09. Second support is the reaction low crossing at 70.93.

Natural gas closed slightly higher due to short covering on Friday and consolidated some of the decline off June's high. The mid-range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI remain bearish signaling that additional weakness is possible near term. If August extends the aforementioned decline, the reaction low crossing at 4.285 is the next downside target. Closes above the 20 day moving average crossing at 4.808 are needed to confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 4.640. Second resistance is the 20 day moving average crossing at 5.808. First support is today's low crossing at 4.339. Second support is the reaction low crossing at 4.285.

The U.S. Dollar closed higher due to short covering on Friday as it consolidated some of the decline off June's high. The high range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term. If September extends the aforementioned decline, the 50% retracement level of the November-June rally crossing at 82.15 is the next downside target. Closes above the 20 day moving average crossing at 85.57 are needed to confirm that a short term low has been posted. First resistance is the 10 day moving average high crossing at 84.96. Second resistance is the 20 day moving average crossing at 85.57. First support is today's low crossing at 83.83. Second support is the 50% retracement level of the November-June rally crossing at 82.15.

Gold closed higher due to short covering on Friday as it consolidates some of the decline off June's high. The high range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term. If August extends the aforementioned decline, the 38% retracement level of this year's rally crossing at 1183.90 is the next downside target. Closes above the 20 day moving average crossing at 1229.20 would signal that a short term low has been posted. First resistance is the 10 day moving average crossing at 1219.70. Second resistance is the 20 day moving average crossing at 1229.20. First support is Wednesday's low crossing at 1185.00. Second support is the 38% retracement level of this year's rally crossing at 1183.90.

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Phil Flynn: Going Coastal

Darn, I was watching the wrong coast. The Energy Information Agency showed a big 5 million barrel drawdown in crude supply due to hurricane activity. The problem was that we were focused on the wrong hurricane. Or should I say hurricanes? All week oil traders watched with a mix of anticipation, angst and fear about the path of Hurricane Alex and its potential impact on oil operations and oil imports. Yet despite the fact that Alex did slow oil imports, it was two West Coast Hurricanes Celia and Darby that actually had more impact on the nations supply.

Normally storms in the West Coast and the Pacific do not catch the imagination of traders especially because the West Coast, while a big oil consumption market, usually does not impact the rest of the nation. The Gulf Coast on the other hand is the part of the country where the oil imports are the largest. Oil from the Gulf can get shipped via pipeline to other parts of the country where in the West Coast its imports feeds just their markets. So many assumed that when we saw that big 5 million barrel crude draw hurricane Alex was the culprit. Yet the truth is that is not the case. Total oil imports in the Gulf Coast actually increased from 5,183 million barrels to 5,529 million barrels.

Yet in the West Coast they dropped from 1,406 million barrels to 1,131 million barrels. A much larger drop and a huge drop if you look at it as a percentage of total West Coast imports. It appears that Category 5 Darby and category 3 Darby played a number on the West Coast import market. A source from the Port of Los Angeles did say that shipping activity was down. So overall, the drop in the West Coast Offset what was pretty darn large import numbers and was a big reason we saw such a large crude oil draw.....Read the entire article.

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Crude Oil Rises as Stocks Climb on Optimism Over Global Economic Recovery

Crude oil rose for a third day as equities gained on optimism that the global economic recovery will accelerate. Oil advanced as much as 1.2 percent as the MSCI World Index headed for its biggest weekly rally in a year. The global economy will grow 4.6 percent in 2010, the biggest expansion since 2007, the International Monetary Fund said on July 7 in revisions to its World Economic Outlook.

“We’re going to be looking at the equities and the dollar for direction here,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. Crude oil for August delivery rose 81 cents, or 1.1 percent, to $76.25 a barrel at 10:46 a.m. on the New York Mercantile Exchange. Futures touched $76.36, the highest intraday price since June 30. Oil is set for a 5.7 percent increase this week, the most since the week ended April 2.

Brent crude for August settlement climbed 89 cents, or 1.2 percent, to $75.60 a barrel on the London based ICE Futures Europe exchange. Oil may rise next week after the IMF upgraded its global economic outlook and as U.S. supplies dropped to a two month low, a Bloomberg News survey showed. Twenty of 38 analysts and traders, or 53 percent, forecast crude will increase through July 16. Ten respondents, or 26 percent, predicted futures will be little changed and eight saw a decrease.

Reporter Mark Shenk can be contacted at mshenk1@bloomberg.net.

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