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.
Crude oil was lower overnight and is extending last Friday's decline. Stochastics and the RSI are turning bearish hinting that a short term top might be in or is near.
Closes below the 20 day moving average crossing at 79.10 are needed to confirm that a short term top has been posted. If September renews the rally off July's low, the reaction high crossing at 84.50 is the next upside target.
First resistance is last Wednesday's high crossing at 82.97
Second resistance is the reaction high crossing at 84.50
Crude oil pivot point for Tuesday morning is 81.32
First support is last Friday's low crossing at 80.04
Second support is the 20 day moving average crossing at 79.10
What is the poor Fed going to do now? Despite the Fed best efforts the Jobs report was a dismal reminder that the economy and commodity prices still need some help. As nonfarm payrolls fell by a larger than expected 131,000 last month the odds that the FED instead of reducing its balance sheet and hang onto some of that paper money that they created out of thin air will instead begin to reinvest that money or put it back out in the market place. The goal is to try to inspire some type of economic enterprise.
Despite the signs of some rebound in the economy new health care programs and new financial regulation bills are leading to uncertainty and economic immobility. The Fed worried about another deflationary spiral that had seemed to be gaining momentum as the market anticipated a reduction of the fed balance sheet. The Fed fears that if they start to remove this stimulus that then it is possible that this nascent recovery make roll over and die.....Read the entire article.
This is like the perfect marriage of TV and the web. Now you can attend online trading seminars that you have an interest in. It is so easy. If you are reading this email, you are online and therefore have everything you need to get started. You can attend all 4 trading seminars, or just the ones that interest you. There are four world class trading instructors that will help improve your trading. Best of all, it's all online and it's on TREND TV now.
I find it amazing how many traders do not use volume as a factor in their trading decisions. I believe it’s always important to track the volume no matter which time frame you are trading simply because it tell you how much interest there is for that investment at that given time and price level. If you use volume and understand how to read it when located at the bottom of the chart which is the standard way of reading it then your well ahead of many traders and just may find this little volume indicator helpful.
Price and volume are the two most important aspects of trading in my opinion. While news and geopolitical events cause daily blips and in rare occasions change the overall trend of an investment, more times than not its better to just trade the underlying trend. Most news and events cannot be predicted so focusing on the price action and volume helps tell us if investors are bullish or bearish for any given investment.
Below are a few charts showing the volume by price indicator in use. Reading this indicator is simple, the longer the blue bars the more volume had traded at that point. High volume levels become key support and resistance levels.
SPY – SP500 Exchange Traded Fund
As you can see on the chart below and I have pointed out key support and resistance levels using the volume by price indicator. The thin red resistance levels would be areas which I would be tightening my stops and or pulling some money off the table.
The SP500 is currently trading at the apex of this wedge. The market internals as of Friday were still giving a bullish bias which should bring the index up to resistance once more on Monday or Tuesday. From there we will have to see if we get another wave of heavy selling or a breakout to the upside.
GLD – Gold Exchange Traded Fund
Gold has the opposite volume to price action as the SP500. We are seeing a lot more over head resistance and that’s going to make it tough for gold to make a new high any time soon.
USO – Crude Oil Trading Fund
Crude oil broke out of is rising wedge last week and has started to drift back down as traders take profits. Many times after a breakout we will see prices dip down and test that breakout level before continuing in the trend of the breakout. I should point out that there is a large gap to be filled from last Monday’s pop in price and we all know most gaps tend to get filled.
UUP – US Dollar Exchange Traded Fund
The dollar has been sliding the past 2 months and it’s now trading at the bottom of a major support level. If the dollar starts to bounce it will put some downward pressure on stocks and commodities.
Weekend ETF Trend Conclusion:
In short, I feel the market has a little more life left in it. I’m expecting 1-2 more days of bullish/sideways price action, after that we could see the market roll over hard. It’s very likely the US dollar starts a significant rally which will pull stocks and commodities down.
With the major indices and gold trading at key resistance levels, traders/investors ready to hit the sell button, and the dollar at a key support level I think its only a matter of time before we see a sharp snapback. That being said there is one scenario which is bullish and could still play out. That would be if the US dollar starts to flag and drift sideways for a week or so, and for stocks and commodities to also move sideways before taking another run higher. Watching the intraday price and volume action will help us figure out if buyers are sellers are in control this week. Anyways that’s it for now.
Crude oil was higher overnight as it consolidates some of last Friday's decline. Stochastics and the RSI are overbought and are turning bearish hinting that a short term top might be in or is near.
Closes below the 20 day moving average crossing at 78.96 are needed to confirm that a short term top has been posted. If September renews the rally off July's low, the reaction high crossing at 84.50 is the next upside target.
First resistance is last Wednesday's high crossing at 82.97
Second resistance is the reaction high crossing at 84.50
Monday's pivot point for crude oil is 81.14
First support is the 10 day moving average crossing at 80.24
Second support is the 20 day moving average crossing at 78.95
Crude Oil had a breakout this week as the risk trade was put on, it benefitted from the short the dollar, and go long commodities play. Plus equities have been testing the higher levels, and trying to establish a higher trading range. The problem with market participants today is that they become too bearish when indications appear bad and too bullish when indications appear good. For example on July 5th you couldn`t give crude oil away for $71 a barrel, and one month later, you couldn`t get anybody to sell it for $82.70 a barrel either.
And the odd paradox of oil trading is that this is exactly what you should have been doing as a market participant. The issue with getting too bullish on crude oil right now is that there are weekly inventory reports that give great insight into the fundamentals of the commodity. Unlike other commodities such as wheat or copper whose precise inventory levels are often a mystery at best, the EIA does an excellent job of providing a detailed report each week that comes out on Wednesday.
And the current fundamentals do not support a strong bullish case for crude; in fact, they are quite bearish for the near term. Enough so that crude oil most likely will not go above $84 a barrel on this breakout. And if it does, statistically speaking, the odds favor being on the other side of the trade, It only pays to buy at the top of the market if there's a runaway bull market, and the current dismal fundamentals of crude oil preclude such a scenario.....Read the entire article.
Crude oil edged further higher to 82.97 last week but retreat sharply since then. A temporary top is at least formed and initial bias is neutral this week. We'd continue to seem more retreat below 82.97 first. Nevertheless, note that another rise remains in favor as long as 75.90 support holds. Above 82.97 will target 100% projection of 64.23 to 79.38 from 71.09 at 86.24 next. However, break of 75.9 will be the first signal that whole rebound from 64.23 is finished and will turn focus to 71.09 support for confirmation.
In the bigger picture, there is no change in the view that rise from 64.23 is a correction to fall from 87.15 only. Hence, even in case of further rally, we'd expect strong resistance below 87.15 high and bring reversal. On the downside, break of 71.09 will be the first signal that whole fall from 87.15 is resuming for another low below 64.23 towards 50% retracement of 33.2 to 87.15 at 60.18
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 from 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.
Crude oil fell the most in a month as weaker-than-forecast growth in U.S. company payrolls bolstered concern that the economic rebound in the world’s biggest oil consuming country is slowing. Oil slipped as much as 2.2 percent after the Labor Department said private payrolls that exclude government agencies rose by 71,000, less than forecast, after a gain of 31,000 in June that was smaller than previously reported. A government report on Aug. 4 showed that U.S. fuel supplies rose last week as demand fell.
“The fundamental news today is that the U.S. economy isn’t creating enough jobs,” said Tim Evans, an energy analyst at Citi Futures Perspective in New York. “There’s no indication that this situation will change anytime soon. There were already doubts about demand, and inventories remain elevated.” Crude oil for September delivery fell $1.15, or 1.4 percent, to $80.86 a barrel at 12:45 p.m. on the New York Mercantile Exchange. Prices are heading for the biggest decline since July 1. Futures are up 2.4 percent this week.
Brent crude oil for September settlement declined $1.31, or 1.6 percent, to $80.30 a barrel on the London based ICE Futures Europe exchange. Economists projected a 90,000 rise in private jobs, according to the median estimate in a Bloomberg News survey. Overall employment fell 131,000 and the jobless rate held at 9.5 percent, according to the department. “We’re losing jobs, not adding them,” said Michael Fitzpatrick, vice president of energy at MF Global in New York. “This is hardly a signal that energy demand will be vibrant in coming months”.....Read the entire article.
Are you looking for an exit strategy from the historic amount of economic stimulus and quantitative easing that has dominated global stock and commodity markets? Well look no further than Europe. While we here in the United States are raising the possibility of more quantitative easing and more ways to stimulate the economy, the President of the European Central Bank Jean Claude Trichet is sending signals he is looking for a way out. Yes, I know. It’s crazy! The EU and its three freaking pillars were on the verge of crumbling into pillars of dust just months ago.
Now EU growth is improving and even Greece passed the EU stress test and now Mr. Trichet seems to be stopping just short of flying a “mission accomplished” banner. Of course Jean-Claude, ever the optimist, said not long ago that people were just too darn negative on the EU and now he seems to be saying get ready to start the long road back to economic normalization. The US on the other hand, has Fed Governors talking about Japanese style Deflation.....Read the entire article.
Natural gas was slightly lower overnight as it extends this week's decline. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term. Closes below the 20 day moving average crossing at 4.597 would confirm that a short term top has been posted. If September renews the rally off July's low, June's high crossing at 5.282 is the next upside target.
First resistance is Monday's high crossing at 5.007
Second resistance is June's high crossing at 5.282
Natural gas pivot point for Friday morning is 4.660
First support is the 20 day moving average crossing at 4.597
Second support is Thursday's low crossing at 4.556
Smart Scan Chart Analysis for natural gas etf "UNG" indicates a counter trend rally is underway The current up trend could be changing and moving into a trading range Sidelines Mode.
Based on a pre-defined weighted trend formula for chart analysis, UNG scored +55 on a scale from -100 (strong downtrend) to +100 (strong uptrend):
+10.....Last Hour Close Above 5 Hour Moving Average
-15.....New 3 Day Low on Thursday
+20.....Last Price Above 20 Day Moving Average
+25.....New 3 Week High, Week Ending July 31st
-30.....New 3 Month Low in May +55.....Total Score
Crude oil was lower due to profit taking overnight as it consolidates some of the rally off July's low. Stochastics and the RSI are overbought and are turning neutral to bullish signaling that a short term top might be in or is near.
Closes below the 20 day moving average crossing at 78.70 would confirm that a short term top has been posted. If September extends the aforementioned rally, the reaction high crossing at 84.50 is the next upside target.
First resistance is Wednesday's high crossing at 82.97
Second resistance is the reaction high crossing at 84.50
Crude oil pivot point for Friday morning is 82.02
First support is the 10 day moving average crossing at 80.09
Second support is the 20 day moving average crossing at 78.70
Crude oil fell for a second day after the number of Americans filing applications for unemployment insurance climbed to a three month high, bolstering concern that the economic recovery is slowing. Oil slipped 0.6 percent after the Labor Department reported that initial jobless claims increased by 19,000 to 479,000 last week, the most since April. A U.S. Energy Department report yesterday showed that crude oil supplies in the Midwest surged to a record as nationwide fuel stockpiles rose.
“The economic data doesn’t bode well for oil demand,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “It’s hard to justify oil near $82 a barrel with the economy struggling.” Crude oil for September delivery declined 46 cents, or 0.6 percent, to settle at $82.01 a barrel on the New York Mercantile Exchange. Futures are up 14 percent from a year ago. Brent crude oil for September settlement fell 59 cents, or 0.7 percent, to end the session at $81.61 a barrel on the London-based ICE Futures Europe exchange.
Economists forecast claims would fall to 455,000, according to the median of 43 projections. Estimates ranged from 444,000 to 470,000. The government revised the prior week’s total to 460,000 from a previously reported 457,000. The country’s jobless rate rose to 9.6 percent last month from 9.5 percent in June, according to a Bloomberg survey before a Labor Department report tomorrow. “We turned lower once the jobs report was released,” said Tom Bentz, a broker at BNP Paribas Commodity Futures Inc. in New York. “There hasn’t been a lot of momentum. We just appear to be giving back some of our recent gains”.....Read the entire article.
Crude oil was lower due to profit taking overnight as it consolidates some of the rally off July's low. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term.
If September extends the aforementioned rally, the reaction high crossing at 84.50 is the next upside target. Closes below the 20 day moving average crossing at 78.45 would confirm that a short term top has been posted.
First resistance is Wednesday's high crossing at 82.97
Second resistance is the reaction high crossing at 84.50
Crude oil's pivot point for Thursday is 82.35
First support is the 10 day moving average crossing at 79.82
Second support is the 20 day moving average crossing at 78.45
Commodities have been shining recently as the US Dollar loses its luster for investors. Also the weakening dollar has helped boost equities as a lower US dollar helps the large multi national companies. This report is a quick follow up from the Weekend report showing what the odds were favoring which was higher gold, oil and sp500. As of today each investment is unfolding as planned, once candle at a time.
GLD – Gold ETF Trading
In my last report I pointed out how gold needed to break through its down trendline, the MACD had to crossover and then we needed to wait for a pullback which ends with a reversal candle to the upside. It seems gold is working its way through that process now.
Today’s Pop & Drop is not bullish price action and I expect we see a couple more down/sideways days before higher prices are reached. There are two bullish ways gold could pullback. First one would be a drop to $115 area with below average volume which could form the right shoulder of a reverse head & shoulders pattern, or we could see prices just fade sideways on light volume for 2-4 days before another up move starts.
USO – Oil Trading Fund
Oil just had a 3 day pop and with today’s doji candle the chart is saying it needs a breather. That also falls inline with the price of the US dollar which should continue higher tomorrow (Thursday Aug 5th) putting downward pressure on crude oil.
SPY – SP500 ETF Trading Signals
SP500 had a nice pop on Monday taking it up to the first key resistance level. The best play would have been to buy last Thursday or Friday when it dropped down to support unfortunately the intraday charts at that time were not that healthy looking.
I am not a fan of trading breakouts because so many of them fail and you end up paying a premium for your position and they can end up going against you very quickly. Rather I focus on trying to pick things up at support or sell them at resistance.
If we see the price pause for another 1-4 days on light volume and hold above the support trendline we could have a great low risk entry point with a stop set just below support. Or we could see a pop then pullback to test the breakout level as which point we can take a long position. This play needs to mature a little more.
Mid-Week Gold, Oil and Index Trading Conclusion:
In short, Gold, Oil and the SP500 look ready for a small pullback or some sideways price action. It will be interesting to see how strong the pullback will be on the SP500. The chart pattern and volume while they favor higher prices at the moment, if the support trendline is breached then selling volume will most likely spike and a sharp decline will occur causing the SP500 to drop approximately 3% all the way down to the $109 area.
Crude oil closed lower due to profit taking on Wednesday as it consolidates some of this week's rally. The mid-range close sets the stage for a steady opening on Thursday. Stochastics and the RSI are overbought but remain bullish signaling that sideways to higher prices are possible near term. If September extends the rally off May's low, the reaction high crossing at 84.50 is the next upside target. Closes below the 20 day moving average crossing at 78.14 would confirm that a short term top has been posted. First resistance is today's high crossing at 82.97. Second resistance is the reaction high crossing at 84.50. First support is the 10 day moving average crossing at 79.54. Second support is the 20 day moving average crossing at 78.14.
Natural gas closed higher due to short covering on Wednesday as it consolidates some of this week's decline. The high range close sets the stage for a steady to higher opening on Thursday. 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 4.579 are needed to confirm that a short term top has been posted. If September renews the rally off July's low, June's high crossing at 5.282 is the next upside target. First resistance is Monday's high crossing at 5.007. Second resistance is June's high crossing at 5.282. First support is Tuesday's low crossing at 4.625. Second support is the 20 day moving average crossing at 4.579.
The U.S. Dollar closed higher due to short covering on Wednesday 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 Thursday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that additional weakness is possible near term. If September extends the decline off June's high, the 62% retracement level of the November-June rally crossing at 80.47 is the next downside target. Closes above the 20 day moving average crossing at 82.66 are needed to confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 81.85. Second resistance is the 20 day moving average crossing at 82.66. First support is Tuesday's low crossing at 80.56. Second support is the 62% retracement level of the November-June rally crossing at 80.47.
Gold closed higher on Wednesday and above the 20 day moving average crossing at 1189.20 confirming that a short term low has been posted. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. If August extends this week's rally, the reaction high crossing at 1218.80 is the next upside target. Closes below the 10 day moving average crossing at 1179.70 would temper the friendly outlook. First resistance is today's high crossing at 1203.00. Second resistance is the reaction high crossing at 1218.80. First support is the 10 day moving average crossing at 1179.70. Second support is last Wednesday's low crossing at 1155.60.
The Petroleum markets took a bit of a breather after surging the first few days in August on rising speculation that the Fed worried about anemic Job Growth and a less then sustainable rate of economic activity will revisit the nuclear option and print more money to get the economy moving again. The Wall Street Journal added to this speculation by raising the possibility that the Fed may reinvest the cash it receives when its mortgage bond holdings mature and buy new mortgage or Treasury bonds, instead of allowing its portfolio to shrink gradually, as it is was expected to do.
This speculation drove traders back into the “carry trade” as the dollar tanked against other major currencies most notably the Yen as traders viewed the US recovery softer than in other parts of the globe. Yet despite some less than spectacular data the oil market anyway backed off the easing talk and tried to focus on weak demand.....Read the entire article.
Natural gas was higher due to short covering overnight as it consolidates some of this week's decline. 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 4.576 would confirm that a short term top has been posted. If September renews the rally off July's low, June's high crossing at 5.282 is the next upside target.
First resistance is Monday's high crossing at 5.007
Second resistance is June's high crossing at 5.282
Wednesday's pivot point for natural gas is 4.696
First support is Tuesday's low crossing at 4.625
Second support is the 20 day moving average crossing at 4.576
Crude oil was lower due to profit taking overnight as it consolidates some of the rally off July's low. Stochastics and the RSI are overbought but remain bullish signaling that sideways to higher prices are possible near term.
If September extends the aforementioned rally, the reaction high crossing at 84.50 is the next upside target. Closes below the 20 day moving average crossing at 78.12 would confirm that a short term top has been posted.
First resistance is Tuesday's high crossing at 82.64
Second resistance is the reaction high crossing at 84.50
Crude oil's pivot point for Wednesday morning is 82.10
First support is the 10 day moving average crossing at 79.49
Second support is the 20 day moving average crossing at 78.12
In today's video we share with you how to use one of the many features in MarketClub, our Smart Scan technology. Using Smart Scan, you can easily spot winning stocks, futures, precious metals, and currencies that meet one of 24 preset scanning criteria, including uptrends or downtrends.
As traders we have 3 potential positions we can take at all times: (1) We can be long the market (2) We can be short the market (3) We can be on the sidelines and out of the market (options allow you to do other things but I want to keep it simple today).
Using our Smart Scan technology and filtering out the noise can help find some of the real nuggets that are out there.
As always our videos are free to watch and there are no registration requirements. If you'd like to comment on this video please do so.
Crude oil closed higher on Tuesday as it extends the rally off May's low. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. If September extends the rally off May's low, the reaction high crossing at 84.50 is the next upside target. Closes below the 20 day moving average crossing at 77.75 would temper the near term friendly outlook. First resistance is today's high crossing at 82.64. Second resistance is the reaction high crossing at 84.50. First support is the 10 day moving average crossing at 78.94. Second support is the 20 day moving average crossing at 77.75.
Natural gas closed lower on Tuesday and below the 10 day moving average crossing at 46.76 signaling that a short term top might be in or is near. The low range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are overbought and are turning bearish signaling that sideways to lower prices are possible near term. Closes below the 20 day moving average crossing at 4.573 would confirm that a short term top has been posted. If September renews the rally off July's low, June's high crossing at 5.282 is the next upside target. First resistance is Monday's high crossing at 5.007. Second resistance is June's high crossing at 5.282. First support is today's low crossing at 4.625. Second support is the 20-day moving average crossing at 4.573.
The U.S. Dollar closed lower on Tuesday as it extends the decline off June's high. The low range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are oversold but remain bearish signaling that additional weakness is possible near term. If September extends the decline off June's high, the 62% retracement level of the November-June rally crossing at 80.47 is the next downside target. Closes above the 20 day moving average crossing at 82.81 are needed to confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 82.10. Second resistance is the 20 day moving average crossing at 82.81. First support is today's low crossing at 80.56. Second support is the 62% retracement level of the November-June rally crossing at 80.47.
Gold closed higher on Tuesday as it continues to rebound off the 50% retracement level of this year's rally crossing at 1158.30. Stochastics and the RSI have turned bullish hinting that a short term low might be in or is near. Closes above the 20 day moving average crossing at 1189.50 are needed to confirm that a short term low has been posted. If August renews the decline off June's high, the 62% retracement level of the aforementioned decline crossing at 1132.70 is the next downside target. First resistance is the 20 day moving average crossing at 1189.50. Second resistance is Monday's high crossing at 1191.80. First support is last Wednesday's low crossing at 1155.60. Second support is the 62% retracement level of the aforementioned decline crossing at 1132.70.
