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 rose the most in more than three weeks as applications for U.S. unemployment benefits dropped more than forecast, easing concern about the labor market amid other signals the economy is slowing. Oil jumped as much as 2 percent after the Labor Department in Washington reported initial jobless claims fell for the first time in a month in the week ended Aug. 21. The Standard & Poor’s 500 Index fluctuated after yesterday’s gain and the dollar fell against the euro, boosting commodities as an alternative investment.
“The four horsemen that matter to oil are all galloping in the same direction today, with a stronger stock market, weaker dollar, better than expected jobs and lower Cushing inventories,” said Adam Sieminski, chief energy economist at Deutsche Bank AG in Washington. Crude oil for October delivery rose $1.01, or 1.4 percent, to $73.53 a barrel at 11:34 a.m. on the New York Mercantile Exchange. Futures have dropped 11 percent since Aug. 3. They have risen 2.9 percent in the past year.
Jobless claims declined by 31,000 last week to 473,000. The median estimate of 48 economists surveyed by Bloomberg News forecast the figure would drop to 490,000. The S&P 500 gained 0.72 points to 1,056.05. The Dow Jones Industrial Average fell 2.2 points to 10,057.86. The dollar traded at $1.2706 per euro, down 0.4 percent from $1.2659 yesterday. The Reuters/Jefferies CRB Index of 19 commodities advanced 0.8 percent to 263.99, the first increase in seven days. Seventeen of the commodities gained, led by copper, heating oil and gasoline.
....Read the entire article.
Smart Scan Chart Analysis continues negative longer term. Look for this market to remain weak. As always trade this strong downtrend with tight 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, USO scored -90 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 Wednesday
-20.....Last Price Below 20 Day Moving Average
-25.....New 3 Week Low, Week Ending August 28th
-30.....New 3 Month Low in May -90.....Total Score
Crude oil was higher due to short covering overnight as it consolidates some of this month's decline. Stochastics and the RSI are oversold and are turning bullish hinting that a short term low might be in or is near.
Closes above the 20 day moving average crossing at 77.53 are needed to confirm that a short term low has been posted. If October extends this month's decline, May's low crossing at 70.35 is the next downside target.
First resistance is the 10 day moving average crossing at 74.26
Second resistance is the 20 day moving average crossing at 77.53
Crude oil pivot point for Thursday morning is 72.08
First support is Wednesday's low crossing at 70.76
Second support is May's low crossing at 70.35
Understanding the key differences between both gold and silver’s risk/volatility levels plays a large part in how I choose a low risk trade setup. Those of you who follow me already know the GLD etf is my favorite trading vehicle as it provides me with low risk trading setups along with a very high win rate.
Ok, let’s jump into to comparing gold and silver as trading instruments. I get the same questions from new traders all the time and I think these two questions will help clear them up.
The questions are:
1. Why don’t you give silver (SLV) trading analysis/signals?
2. Why don’t you trade silver?
My answer to the questions are simple and the chart below displays my view.
The gold (GLD) signals I provide work with silver so you can just trade silver when I have gold long or short trade. This is the reason I don’t provide much silver analysis because it’s duplicate info.
The chart below shows how gold and silver trade together when it comes to rallies and sell offs. But notice how volatile silver is while gold had a nice slow and steady trend upwards… Gold’s low volatility trending characteristics is what I love about it. Silver on the other hand is all over the place making it easy to have protective stops triggered before the majority of the trend is over. The silver charts almost always look terrible (tough to read for a direction). I really don’t like getting shaken out of a winning trade…
The pink circles show a quick short trade we did this week catching a quick 1% drop. The short trade was for FuturesTradingSignals where we capture 1-3 day extreme market sentiment shifts.
GLD – Gold ETF Trading Chart
The chart below shows several points as to why gold/silver was screaming BUY ME on Tuesday afternoon. The two things that carry 90% of the strength in my opinion are the candlestick pattern (Bullish Engulfing) and the volume surge. Those two things when seeing on virtually any time frame are a good indication to go long for 1-3 candlesticks minimum.
Gold VS Silver – 5 Minute 3 Day Chart
This chart clearly shows the power of trading a more volatile commodity with silver being the one. This week’s buy signal in gold is dwarfed by the performance of silver. Silver has always shined more in my opinion but when it comes to trading… It tougher than it looks to trade because of the wild whipsaw action it makes on a regular basis.
Gold and Silver Trading Conclusion:
In short, gold is the safe haven when it comes to actively trading. I do trade silver here and there but the size of my position is much smaller because of the difficulty level and volatility associated with it. I will not that I do trade gold and silver futures at times but for this report I focused on ETF’s.
IF YOU WANT TO GET Chris Vermeulen's TRADING ANALYSIS AND ETF TRADING ALERTS JOIN HIS NEWSLETTER at > THE GOLD AND OIL GUY .COM
The government is expected to report Wednesday a 1.1 million barrel increase in commercial crude oil supplies for the week ended Aug. 20, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.
The Energy Information Administration releases its weekly report at 10:30 a.m. EDT.
Platts said analysts predicted gasoline stockpiles will shrink by 875,000 barrels, distillate stocks, including diesel and heating oil, will increase by 950,000 barrels and refinery utilization will dip by 0.5 percentage point to 89.5 percent.
A reading above or below estimates can influence market trading.
For the week that ended Aug. 13, the department said crude supplies shrank by 800,000 barrels to 354.2 million barrels; gasoline inventories were nearly unchanged at 223.3 million barrels and inventories of distillate fuel rose by 1.1 million barrels to 174.2 million barrels.
The S&P 500 closed higher due to short covering on Wednesday as it consolidates some of this month's decline. 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 this month's decline, July's low crossing at 1003.10 is the next downside target. Closes above the 20 day moving average crossing at 1092.61 are needed to confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 1071.89. Second resistance is the 20 day moving average crossing at 1092.61. First support is today's low crossing at 1037.50. Second support is July's low crossing at 1003.10.
Crude oil closed higher due to short covering on Wednesday as it consolidated some of this month's decline. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are oversold but remains neutral to bearish signaling that sideways to lower prices are possible near term. If October extends this month's decline, May's low crossing at 70.35 is the next downside target. Closes above the 20 day moving average crossing at 77.80 are needed to confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 74.54. Second resistance is the 20 day moving average crossing at 77.80. First support is today's low crossing at 70.76. Second support is May's low crossing at 70.35.
Gold closed higher on Wednesday and tested the 75% retracement level of the June-July decline crossing at 1239.60 as it extends the rally off July's low. Stochastics and the RSI are overbought, diverging but are turning neutral to bullish signaling that sideways to higher prices are possible near term. If August extends the rally off July's low, the 87% retracement level of the June-July decline crossing at 1253.30 is the next upside target. Closes below the 20 day moving average crossing at 1209.40 would temper the friendly outlook. First resistance is today's high crossing at 1242.00. Second resistance is the 87% retracement level of the June-July decline crossing at 1253.30. First support is Tuesday's low crossing at 1210.90. Second support is the 20 day moving average crossing at 1209.40.
The U.S. Dollar closed higher on Wednesday as it extends this month's rally. The mid range close sets the stage for a steady opening on Thursday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term. If September extends this month's rally, the reaction high crossing at 84.73 is the next upside target. Closes below the 20 day moving average crossing at 82.01 would temper the near term friendly outlook. First resistance is Tuesday's high crossing at 83.64. Second resistance is the reaction high crossing at 84.73. First support is the 10 day moving average crossing at 82.85. Second support is the 20 day moving average crossing at 82.01.
Crude oil fell to its lowest price in seven weeks before a report forecast to show that U.S. inventories of crude increased as summer driving demand ebbs. The U.S. Energy Department will probably report today that crude stockpiles gained 300,000 barrels last week after three weeks of declines, a Bloomberg survey showed. Oil extended losses after the U.S. Commerce Department reported a smaller increase in durable goods orders than analysts had predicted.
“U.S. consumption is still very low; product inventories are sky-high,” said Tobias Merath, Zurich based head of commodity research at Credit Suisse Group AG. “In every market we’ve seen fears of a double dip recession and oil has been particularly affected.” Crude for October delivery declined as much as 53 cents, or 0.7 percent, to $71.10 a barrel, in electronic trading on the New York Mercantile Exchange, its lowest since July 6. It traded for $71.36 as of 1:38 p.m. London time. Brent crude for October delivery dropped 20 cents to $72.18 a barrel on the London based ICE Futures Europe Exchange.
Figures from the Commerce Department showed that bookings increased 0.3 percent, compared with the 3 percent median estimate of 75 economists surveyed by Bloomberg News. Excluding transportation equipment, demand unexpectedly fell. The Energy Department will issue its weekly report at 10:30 a.m. local time in Washington D.C. today. U.S. gasoline stockpiles probably declined 450,000 barrels in the week ended Aug. 20, based on the median estimate from 18 analysts surveyed.....Read the entire article.
Crude oil was slightly higher due to short covering overnight as it consolidates some of this month's decline. Stochastics and the RSI are oversold but remain 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 77.75 would confirm that a short term low has been posted.
First resistance is the 10 day moving average crossing at 74.44
Second resistance is the 20 day moving average crossing at 77.75
Crude oil pivot point for Wednesday morning is 72.00
First support is the overnight low crossing at 71.32
Second support is May's low crossing at 70.35
OPEC's oil revenue is surging, again, and is set to continue growing through 2011 according to the U.S. Energy Information Administration. 2010 oil revenue is likely to be a cool $181 billion higher than that seen in 2009, which makes for a pretty nice rebound.
Rigzone:
Last year, OPEC revenue plummeted to its lowest since 2005, when total revenue exceeded $500B for the first time. EIA forecasts that OPEC members could earn $752B of net oil export revenues in 2010, and with expectations of a slightly higher average in 2011 oil prices, to earn $821B in 2011.
It might take a few years for OPEC to beat 2008's peak oil revenue, but future revenue forecasts could change dramatically should oil prices end up far higher than currently forecast.
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.
