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Crude oil fluctuated after sales at U.S. retailers rose less than forecast in July and the cost of living climbed for the first time in four months. Oil traded at its lowest level in four weeks as a lack of jobs prompted Americans to hold back on spending, according to figures from the Commerce Department. The increase in the consumer price index points to a stabilization that may ease concern that a slowdown in growth will spur deflation.
“The economic picture is unsettled,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “The fundamentals are weak, with high inventories and weak demand, so the market has a hard time holding above $80.” Oil for September delivery fell 7 cents to $75.67 a barrel at 10:24 a.m. on the New York Mercantile Exchange. Earlier, it touched $75.32, the lowest price since July 16. Futures have fallen 6.2 percent this week, the most since the week ended July 2.
Retail sales increased 0.4 percent last month, following a revised 0.3 percent drop in June. Economists projected a 0.5 percent gain, according to the median estimate in a Bloomberg News survey. “The retail sales numbers were a little disappointing, which moved the market lower for a bit, but we’re holding on here,” said Tom Bentz, a broker with BNP Paribas Commodity Futures Inc. in New York.
The consumer price index increased 0.3 percent, the most in a year and exceeding the 0.2 percent gain projected by the median forecast of economists surveyed by Bloomberg News, figures from the Labor Department showed today in Washington.....Read the entire article.
The current price in natural gas has a lot of traders taking positions. So is it time to buy natural gas? Let's take a look at our Smart Scan Chart Analysis. It confirms that a strong downtrend is in place and that the market remains negative longer term. Strong Downtrend with money management stops. A triangle indicates the presence of a very strong trend that is being driven by strong forces and insiders. Based on a pre-defined weighted trend formula for chart analysis, UNG scored -100 on a scale from -100 (strong downtrend) to +100 (strong uptrend).
-10......Last Hour Close Below 5 hour Moving Average
-15......New 3 Day Low on Thursday
-20......Last Price Below 20 Day Moving Average
-25......New 3 Week Low, Week Ending August 14th
-30......New 3 Month Low in May -100.....Total Score
Crude oil was slightly higher due to short covering overnight and is consolidates some of the decline off last week's high. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term.
If September extends the aforementioned decline, the reaction low crossing at 74.70 is the next downside target. Closes above the 10 day moving average crossing at 80.04 would confirm that a short term low has been posted.
First resistance is the 20 day moving average crossing at 79.02
Second resistance is the 10 day moving average crossing at 80.04
Crude oil's pivot point for Friday morning is 76.41
First support is Thursday's low crossing at 75.52
Second support is the reaction low crossing at 74.70
Gold was lower due to profit taking overnight as it consolidates some of Thursday's rally. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term.
If October extends the rally off July's low, the reaction high crossing at 1220.80 is the next upside target. Closes below the 20 day moving average crossing at 1190.40 would temper the friendly outlook.
First resistance is the overnight high crossing at 1218.60
Second resistance is the reaction high crossing at 1220.80
Gold pivot point for Friday morning is1211.0
First support is the 10 day moving average crossing at 1199.20
Second support is the 20 day moving average crossing at 1190.40
Natural gas was slightly higher overnight as it extends this week's trading range. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term.
If September renews last week's decline, May's low crossing at 4.140 is the next downside target. Closes above the 20 day moving average crossing at 4.557 confirm that a short term low has been posted.
First resistance is the 10 day moving average crossing at 4.467
Second resistance is the 20 day moving average crossing at 4.557
Natural gas pivot point for Friday morning is 4.308
First support is Wednesday's low crossing at 4.257
Second support is May's low crossing at 4.140
Dan Dicker, senior TSC contributor, doesn't like the stock market right now but reveals the two stocks he's watching as indices correct. Follow Dan on Twitter @Dan_Dicker.
Crude oil closed lower on Thursday as it extends yesterday's breakout below the 20 day moving average crossing at 79.05. Renewed concerns over both the domestic and world economy and the negative ramifications of potential lower world demand continues to weigh on the energy complex.
The low range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term. If September extends this week's decline, the reaction low crossing at 74.70 is the next downside target. Closes above the 10 day moving average crossing at 80.36 would confirm that a short term low has been posted.
First resistance is the 20 day moving average crossing at 79.05
Second resistance is the 10 day moving average crossing at 80.36
First support is today's low crossing at 75.52
Second support is the reaction low crossing at 74.70
Did you close out any long positions today? Well if not then you are one of a few!
Today (Wednesday) the market gapped down 1.5% at the opening bell which set a very negative tone for the session. Volume was screaming as protective stops triggered and traders close out positions before prices fell much further. This gap seemed to have caught several traders off guard but those of you who follow my newsletter knew something big was brewing and to keep positions very small.
Just before the close on Tuesday I had a buy signal for the SP500 which was generated from the extreme readings on the market internals. After watching the market chop around and get squeezed into the apex of the rising wedge the past 3 weeks I knew something big was about to happen and I did not want to get everyone involved because I felt a large gap was about to happen and the odds were 50/50. Instead we passed on the technical buy signal and waited to see what would happen Wednesday.
Below are a few charts showing one of my extreme reading indicators I use which helps me to identify possible short term bottoms.
SP500 – SPY Exchange Traded Fund
This daily chart of the SPY etf clearly shows that when we see panic selling in the NYSE which I consider 15+ sell orders to each buy order to be PANIC SELLING. This is shown using the purple indicator at the bottom of the chart. Today there was an average of 37 sell orders to every buy order which tells me the majority of traders are closing out all their long positions.
In an uptrend this indicator works very well and can help time a bottom within 1-4 days. As you can see on the chart below we just had a huge sell off and everyone seemed to be exiting their positions. This panic selling tends to carry over for a couple sessions until the majority of traders around the globe are finished selling.
The problem with this indicator is that in a down trend we tend to get these panic selling spikes regularly which means this time it may not work out because of the trendline break today which I think has officially changed the trend from up to down. Because of this possible down trend starting I feel its best to wait and see if it’s a dead cat bounce or if there are real buyers behind it, then we will take action to go long or short the market.
Market Internals – Put/Call Ratio & NYSE Advance/Decline Line – 60 Min Charts
Here are two charts which are currently at extreme levels. This typically means we a bounce should occur the following day or a gap higher. If you did not know there was a strong trendline breakdown today you most likely would have taking a small long position into the close.
The Put/Call ratio when above 1.00 means more people are buying put options, meaning they are leveraging themselves to make money if the market drops. As a contrarian indicator, if everyone is buying leverage to the down side then they should have sold their long positions already. That would mean most of the selling has already taken place in the market thus it should have some upward bias in the near term.
On the other side you can see the NYSE A/D line which shows how many stocks on the NYSE are advancing and how many have moved lower. When this indicator is below -1750 then we know the market is oversold on a short term basis and there should be some upward bias in the near future.
Now Lets Take A Look At Gold
Gold was left on the side of the road today as traders and investors focused on the equities market. I was actually a little surprised that it didn’t make a big move today because the US Dollar rocketed higher for the entire session. Anyone who has been watching gold closely already knows that gold is doing its own thing now… Some days it moves with the dollar, other days it does not… its become much more random than it used to be.
Anyways it looks to be forming two patterns… first one is a bull flag. If a breakout to the upside occurs that would send gold to the $1230-40 level.
The second pattern is a mini head and shoulders pattern which would send gold down to the $1180 area if the neck line is violated. It is a very tough call for gold.
Mid-Week Technical Traders Update:
In short, it’s going to take a day or two before we get a feel for the SP500 as we wait to see if it bounces with volume behind it. I personally would like a bounce so we can short it. It is unfortunate how the market broke down today. We were so close to getting a really good setup in either direction but the FOMC meeting shook things up and caused the large gap which in turn made a large group of traders miss that beautiful drop… It’s frustrating when you wait for something only to have a piece of news mess things up. That’s just part of trading though.
As for gold, I feel it’s a 50/50 trade and could go either way so I am not going to take a position right now. I’m just going to wait for the market to tip its hand a little more before I jump.
The Chinese central bank worried about a sharp slowdown as the country took steps to reignite their softening export market. The Peoples Bank of China, according to the Wall Street Journal, set the dollar/yuan central parity rate at a seven week high following the U.S. dollar's broad strength against most major currencies overnight amid concerns about a weakening global economic recovery. The move had the yuan drop sharply against other major currencies and may draw attention from China’s critics that the move will give China a continued unfair trade advantage.
This is especially true after the US trade deficit jumped by a whopping 18.8 percent hitting to $49.9 billion dollars, highest level since 2008. Yet at the same time, China, the great hope for commodity bulls, has some major economic problems on their own. China's growth was at 11.9% and has fallen abruptly to 10.2% in the second quarter. Recent data on Chinese Industrial output reports it fell to 13.4%. China’s real estate bubble is alarming. China has raised interest rates to try to reign in property speculation.....Read the entire article.
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.
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.
