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Crude oil declined for a third day after U.S. jobless claims increased, bolstering concern that economic growth will slow and fuel demand will drop. Oil decreased as much as 2.5 percent as initial jobless claims rose by 2,000 to 484,000 last week, the highest level since February. Yesterday, a government report showed that U.S. gasoline supplies climbed for a seventh week and stockpiles of distillate fuel, a category that includes heating oil and diesel, advanced to the highest level since January 1983.
“The weekly jobless numbers were disastrous and sent the market lower,” said Phil Flynn, vice president of research at PFGBest in Chicago. “The oil market is facing the reality, which is that supplies exceed demand. The only thing that was supporting prices was a false sense of economic security.” Crude oil for September delivery dropped $1.46, or 1.9 percent, to $76.56 a barrel at 10:03 a.m. on the New York Mercantile Exchange. Futures touched $76.05, the lowest level since July 28.
Brent crude oil for September settlement fell $1.52, or 2 percent, to $76.12 a barrel on the London based ICE Futures Europe Exchange. Economists forecast claims would fall to 465,000, according to the median of 42 projections in a Bloomberg News survey. The government revised the prior week’s claims figure up to 482,000 from a previously reported 479,000. The Federal Reserve on Aug. 10 held its benchmark interest rate at a record low and announced it will reinvest principal payments on mortgage holdings into long-term Treasury securities, an effort to bolster economic growth.....Read the entire article.
It's déjà vu all over again". Is one of Yogi Berra's famous original quotes and the same can be said for the DOW right now.
The weekly chart on the DOW is flashing the same Japanese candlestick signal that it had earlier in April of this year. Back then the DOW dropped from 11,200 to 9,700 in the space of just 10 weeks!
If nothing else watch this video as this could be one of the most important weeks for the DOW and its future. The video runs three minutes. You will find it both interesting and educational from both a Fibonacci and Japanese candlestick point of view.
As always our videos are free to watch and there are no registration requirements needed. Please feel free to leave a comment and let us know what you think of the video and the future of the Dow and the markets in general.
Crude oil was lower overnight and is extends the decline off last week's high. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term.
If September extends the aforementioned decline, the reaction low crossing at 75.90 is the next downside target. Closes above the 10 day moving average crossing at 80.50 would confirm that a short term low has been posted.
First resistance is the 20 day moving average crossing at 79.13
Second resistance is the 10 day moving average crossing at 80.50
Thursday's pivot point for crude oil is 78.57
First support is the overnight low crossing at 76.92
Second support is the reaction low crossing at 75.90
a href="http://tinyurl.com/y9o4shu">The "Super Cycle" in Gold and How It Will Affect Your Pocketbook in 2010
Crude oil closed sharply lower on Wednesday and below the 20 day moving average crossing at 79.10 confirming that a short term top has been posted. The low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are bearish signaling that sideways to lower are possible near term. If September extends today's decline, the reaction low crossing at 75.90 is the next downside target. Closes above the 10 day moving average crossing at 80.59 would temper the near term bearish outlook. First resistance is the 10 day moving average crossing at 80.59. Second resistance is last Wednesday's high crossing at 82.97. First support is today's low crossing at 77.69. Second support is the reaction low crossing at 75.90.
Natural gas closed slightly higher on Wednesday as it consolidates above support marked by July's low crossing at 4.290. 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 September extends the decline off last week's high, May's low crossing at 4.140 is the next downside target. Closes above the 20 day moving average crossing at 4.582 would confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 4.582. Second resistance is the reaction high crossing at 4.825. First support is today's low crossing at 4.257. Second support is May's low crossing at 4.140.
The U.S. Dollar closed higher on Wednesday and above the 20 day moving average crossing at 81.93 confirming that a short term bottom has been posted. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are turning bullish signaling that sideways to higher prices are possible near-term. If September extends today's rally, the reaction high crossing at 83.64 is the next upside target. If September renews this summer's decline, the 75% retracement level of the November-June rally crossing at 78.60 is the next downside target. First resistance is today's high crossing at 82.55. Second resistance is the reaction high crossing at 83.64. First support is last Friday's low crossing at 80.17. Second support is the 75% retracement level of the November-June rally crossing at 78.60.
Gold closed higher on Wednesday as it consolidates above the 20 day moving average. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term. If August extends last week's rally, the reaction high crossing at 1220.80 is the next upside target. Closes below the 20 day moving average crossing at 1189.00 would temper the friendly outlook. First resistance is last Friday's high crossing at 1212.10. Second resistance is the reaction high crossing at 1220.80. First support is the 10 day moving average crossing at 1191.60. Second support is the 20 day moving average crossing at 1189.00.
Tell me over and over and over again my friend! You don’t belive we are on the eve of demand destruction! The last time I honored the 1965 Barry Maguire classic “Eve of Destruction”, oil was hurling towards $147 a barrel and I said that there is no way that this rapid rise would not cause demand destruction and damage to the economy. What followed was the biggest drop in demand in the history of the global oil markets. Now with concerns of another slowdown in the economy, is it possible that demand could crash again?
Ok it is not only the Fed worried about a slowdown in the economy, it seems that the International Energy Agency is as well. The Fed helped bail out oil bulls to a certain extent when they said they would reinvest principal payments on mortgage assets the central bank holds into U.S. treasuries in an effort to keep historically low borrowing rates historically low. I know it sounds ironic. The Fed is concerned that growth has slowed in recent months and fears that "the pace of economic recovery is likely to be more modest in the near term than had been anticipated.....Read the entire article.
Crude oil fell for a second day on signals that economic growth in the U.S. and China, the world’s biggest energy consuming countries, is slowing. Oil slipped as much as 2.9 percent after China’s industrial output grew by the least in 11 months and the Federal Reserve said the U.S. recovery is decelerating. Futures extended declines after the U.S. Energy Department reported that fuel supplies climbed last week.
“The Chinese economy is showing signs of weakness and the picture here is worsening,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “The economic picture isn’t rosy. The question now is where we will find support as we move south.” Crude oil for September delivery fell $2.10, or 2.6 percent, to $78.15 a barrel at 11:39 a.m. on the New York Mercantile Exchange. Futures touched $77.90, the lowest level since July 30. Brent crude oil for September settlement slipped $1.93, or 2.4 percent, to $77.67 a barrel on the London based ICE Futures Europe Exchange.
China’s year-on-year industrial production growth slowed to 13.4 percent in July, the statistics bureau said in Beijing today. In June, the increase was 13.7 percent. July’s gain was the smallest since August last year after excluding distortions caused by holidays at the start of each year. “The markets are once again responding to negative economic news from China,” said Tom Bentz, a broker at BNP Paribas Commodity Futures Inc. in New York. “Chinese industrial output isn’t growing as fast and the retail sales numbers were disappointing”.....Read the entire article.
Crude oil prices are trading lower early again today. Bulls still have the overall near term technical advantage, but are now fading a bit.
In September crude, look for buy stops to reside just above resistance at 80.00 and then at the overnight high of $80.44. Look for sell stops just below technical support at $79.00 and then at $78.50. Crude oil's pivot point for Wednesday morning is 80.36.
The U.S. dollar index is solidly higher in early trading, on short covering and safe haven buying interest. Bulls have quickly gained fresh upside near term technical momentum. Slow stochastics for the dollar index are bullish early today. The dollar index finds shorter term technical resistance at 82.00 and then at 82.25. Shorter term support is seen at 81.50 and then at 81.23.
Crude oil closed lower on Tuesday and below the 10 day moving average crossing at 80.51 signaling that a short term top has been posted. The mid range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI have turned bearish signaling that sideways to lower are possible near term. Closes below the 20 day moving average crossing at 79.08 are needed to confirm that a short term top has been posted. If September renews the rally off May'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. First support is today's low crossing at 79.20. Second support is the 20 day moving average crossing at 79.08.
Natural gas closed slightly lower on Tuesday but remains above support marked by July's low crossing at 4.290. The mid range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term. If September extends the decline off last week's high, May's low crossing at 4.140 is the next downside target. Closes above the 10 day moving average crossing at 4.622 would confirm that a short term low has been posted. First resistance is the 20 day moving average crossing at 4.583. Second resistance is the 10 day moving average crossing at 4.622. First support is Monday's low crossing at 4.313. Second support is May's low crossing at 4.140.
The S&P 500 index closed lower due to profit taking on Tuesday while extending last week's trading range. The mid range close sets the stage for a steady 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 September extends the rally off July's low, June's high crossing at 1129.20 is the next upside target. Closes below the 20 day moving average crossing at 1100.59 would confirm that a short term top has been posted. First resistance is last Thursday's high crossing at 1127.50. Second resistance is June's high crossing at 1129.20. First support is the 20 day moving average crossing at 1100.59. Second support is the reaction low crossing at 1083.60.
The U.S. Dollar closed higher due to short covering on Tuesday as it consolidated some of last Friday's decline. A late day sell off tempered early gains and the low range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are turning neutral to bullish hinting that a short term low might be in or is near. Closes above the 20 day moving average crossing at 81.99 are needed to confirm that a short term low has been posted. If September extends the decline off June's high, the 75% retracement level of the November-June rally crossing at 78.60 is the next downside target. First resistance is today's high crossing at 81.65. Second resistance is the 20 day moving average crossing at 81.99. First support is last Friday's low crossing at 80.17. Second support is the 75% retracement level of the November-June rally crossing at 78.60.
The U.S. Dollar closed higher due to short covering on Tuesday as it consolidated some of last Friday's decline. A late day sell off tempered early gains and the low range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are turning neutral to bullish hinting that a short term low might be in or is near. Closes above the 20 day moving average crossing at 81.99 are needed to confirm that a short term low has been posted. If September extends the decline off June's high, the 75% retracement level of the November-June rally crossing at 78.60 is the next downside target. First resistance is today's high crossing at 81.65. Second resistance is the 20 day moving average crossing at 81.99. First support is last Friday's low crossing at 80.17. Second support is the 75% retracement level of the November-June rally crossing at 78.60.
If at first you don't succeed, try, try again! It’s Fed Day and the global energy markets are waiting to find out whether or not the Fed is going to boost the markets with another shot of quantitative easing. Speculation is swirling that the Fed, desperate to knock the malaise out of the economy, will double down on its policy and flood the economy with even more printed money. This is a far cry from expectations just a few weeks ago when the Fed was widely expected to reduce their balance sheet as they were set to collect 100 to 180 billion dollars in profit from its Mortgage Backed Securities (MBS) it took over in the heat of the financial crisis.
Instead of putting that money back in their coffers and reducing the money supply, the fearful Fed may just pump that cash back out there and buy more MBS or bonds to try to inspire some economic activity and maybe even some job creation. In fact data out of China overnight might even put more pressure on the Fed to act. Chinese imports came in much weaker than expected in July causing a big selloff in the Shanghai composite index. The index dropped 2.9% which was its worst percentage.....Read the entire article.
Today we are going to take a look at MarketClub's World Cup Portfolio that has been tracking six markets for the past three years. We think it is fair to say that the last 36 months have presented one of the most challenging trading environments in recent memory.
So how did we do?
We put together this very short video which is only 1 minute 45 seconds long and gives you all the information that you need to decide whether or not this approach is one that could work for you. Bear in mind that the World Cup Portfolio is a leveraged portfolio unlike our "Perfect Portfolio" which is not leveraged. We think you will find this video very informative and educational.
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.
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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.
