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.
You know every once in a while someone defines what you have been trying to say and does it a way that is clear and concise and in terms so clear that you have to say yes, that is exactly what I have been trying to say. For months I have been telling you that despite the fact that I am long term bearish on oil I felt the better way to play this market was not to be married to either a dogmatically bull or bear position but to take advantage of the ranges. I said don’t be a hero, oil is making wide swings.
I pointed out that if you sold oil earlier in the year you are making money now but you would have been down as well and given those profits back many times. If you were long you are losing money. Unlike past years when I advocated being long and hanging on or selling and hanging on this year you are better off not being a bull or bear you are better off being a wolf. Yes Wolf! That’s it! That’s what I have been trying to say! Yes I am bearish and I think oil will eventually breakout on the downside but that moment is being delayed mainly by global economic stimulus.....Read the entire article.
Crude oil was lower overnight as it extends this month's decline. Stochastics and the RSI are oversold but are neutral to bearish signaling that additional weakness is possible near term.
If October extends the aforementioned decline, May's low crossing at 70.35 is the next downside target. Closes above the 20 day moving average crossing at 78.07 would confirm that a short term low has been posted.
First resistance is the 10 day moving average crossing at 75.18
Second resistance is the 20 day moving average crossing at 78.07
Crude oil pivot point for Tuesday morning is 73.44
First support is the overnight low crossing at 72.02
Second support is May's low crossing at 70.35
Oil declined for a fifth day after analysts estimated that U.S. inventories of crude rose last week and as the dollar gained against the euro because of concern the global economy is slowing. Oil dropped to the lowest in almost seven weeks yesterday as investors sought the relative safety of the U.S. currency before economic reports that may show the recovery is faltering. U.S. crude inventories probably increased last week, according to a Bloomberg News survey.
“The price of oil dropped again, showing investor uncertainty over the future of the global economy, mainly that of the U.S.,” said Mike Sander, an investment adviser at Sander Capital Advisors in Seattle. “There just isn’t much positive in the news.” Crude for October delivery dropped as much as 56 cents, or 0.8 percent, to $72.54 a barrel in electronic trading on the New York Mercantile Exchange. It was at $72.79 at 1:02 p.m. Singapore time. Yesterday, the contract lost 72 cents, or 1 percent, to $73.10, the lowest settlement price since July 6. Futures have fallen 8.3 percent since the start of the year.
The dollar rose to $1.2642 per euro at 1:03 p.m. in Singapore, from $1.2657 yesterday, after reaching $1.2621, the highest since July 13. A stronger U.S. currency reduces investor appetite for commodities as a hedge against inflation. Forecasts show sales of existing U.S. homes dropped 13.4 percent in July and gross domestic product growth slowed to a 1.4 percent annual pace in the second quarter, down from 2.4 percent last month.....Read the entire article.
GOLD ALERT: We are moving our gold stops up to $1,222.10 today basis spot gold. Spot gold is currently trading at $1,224.60. This will lock in a $12 profit on the earlier alert we showed you on this blog.
I guess before we start to talk about all news that might drive energy trading, let’s talk about the factors that many of you thought might drive the market this week but did not. I heard from some that they thought that this weekend Israel would bomb Iran’s nuclear sites. Did not happen. Others were worried that the market would be impacted by what is now tropical storm Danielle. Well it looks like Danielle will miss the Gulf of Mexico and go up the East Coast. Of course oil bulls have been hoping for some event to help them out as the shoulder season approaches us with supplies near multi decade highs and gasoline futures near 6 month lows.
As more questions arise about the strength of the economy, the weight upon the market is getting larger. It is getting harder to justify long positions especially as the economic recovery is locked in a quagmire. Weak jobs data and manifesting data and a sense that the economy is going nowhere really is making the market look heavier and heavier with each passing day. In fact even in China crude inventories are rising. Dow Jones reported that China's commercial crude oil stockpiles.....Read the entire article.
Crude oil rebounded from its lowest level in more than six weeks as equity markets advanced, spurring confidence that the economy is improving and fuel demand will recover. Oil rose for the first time in four days as U.S. stocks gained amid speculation takeovers will accelerate, boosting the Standard & Poor’s 500 Index after two weeks of losses. Tropical Storm Danielle may become the Atlantic season’s second hurricane within a day, the National Hurricane Center forecast.
“We’re tracking the equities,” said Gene McGillian, an analyst and broker at Tradition Energy, a procurement adviser in Stamford, Connecticut. “We track the perceptions of how the economy is playing out through the equities and the dollar,” Crude oil for October delivery gained 51 cents, or 0.7 percent, to $74.33 a barrel at 9:54 a.m. on the New York Mercantile Exchange. The price has fallen 6.3 percent this year. The September contract expired at $73.46 on Aug. 20, the lowest closing level since July 6.
The S&P 500 rose 0.9 percent to 1,080.89 after falling to a four-week low last week. The Dow Jones Industrial Average increased 84.54 points, or 0.8 percent, to 10,298.16. “The correlation is still strong with equities and it’s likely to remain so,” said Roland Stenzel, a crude and carbon trader at E&T Energie Handelsgesellschaft mbH in Vienna. “The market continues to fluctuate”.....Read the entire article.
Crude oil was higher due to short covering overnight as it consolidates some of this month's decline. Stochastics and the RSI are oversold but are neutral to bearish signaling that additional weakness is possible near term.
If September extends the aforementioned decline, the 75% retracement level of the May-August rally crossing at 72.96 is the next downside target. Closes above the 20 day moving average crossing at 78.25 would confirm that a short term low has been posted.
First resistance is the 10 day moving average crossing at 76.52
Second resistance is the 20 day moving average crossing at 78.25
Crude oil pivot point for Monday morning is 74.08
First support is last Friday's low crossing at 73.19
Second support is the 75% retracement level of the May-August rally crossing at 72.96
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Prices continue to churn as traders and investors try to figure if they want their hard earned dollar in cash or investments. The market is very jittery simply because no one wants to get caught on the wrong side of the market if it makes another 30-40% move, which is why we are seeing money rotate in and out each with very little commitment and follow through. Until a major trend looks to be in place most investors will not me holding many positions over night or through the weekend.
Here are a couple charts on what I think is most likely to happen in gold and the sp500.
GLD – Gold ETF Daily Chart
Last week we saw gold move higher by 1% but I cannot help but think a sharp sell off is only days away from being triggered. Either we get a another pop into resistance which would eventually trigger a wave of sellers and cause a sharp drop or the price of gold will drift lower to eventually break a key support level and trigger stop orders. Once the stops start to get triggered I would expect follow through selling for a couple days which will pull the price of GLD back down to the $113-116 area.
Also there is a possible head and shoulders pattern forming on this chart which is not picture perfect one but, it’s important to be aware as a neckline break could trigger massive selling and pull GLD down to the $100 area. But that would not unfold for several weeks if not months.
SPY – SP500 ETF
SP500 broke down from the support trendline two week ago and has since been trying to bounce. Last week we did see a two day pop but was given back Thursday. As you can see there is a possible mini head & shoulders pattern forming and the current price is testing the neckline. A breakdown below this should trigger a move to the $102 level.
Weekend Trading Conclusion:
In short, the market is trading at a key support level and this week should be exciting. Looking at several large cap stocks I am seeing bear flags on a large percentage of charts. Seeing these forming makes me think lower prices are just around the corner.
It looks like low risk trading setups are about to start popping up across the board and if we get a powerful trend going into the year end there will be some good money made for those on the proper side.
