Commodity Corner: Crude Oil Begins Week Much Higher

A weaker equities market and a stronger dollar failed to place downward pressure on crude oil Monday. Crude oil for January delivery gained $1.97 to settle at $85.75 a barrel during a trading day influenced by factors ranging from oil products demand to the release of politically sensitive information attributed to U.S. State Department officials. In the latter case, ongoing fallout from the widespread leaks has heightened perceived geopolitical risks.

Exacerbating the geopolitical situation have been escalating tensions between North and South Korea as well as continued speculation about Europe's debt crises. Although the European Union approved a EUR85 billion bailout for Ireland over the weekend, there are fears that other heavily indebted countries such as Spain and Portugal will be next in line for massive financial aid packages. In addition, tightening inventories of gasoline contributed to oil's rally Monday. December gasoline ended the day seven cents higher at $2.28 a gallon

Oil traded within a range from $83.59 to $85.54. Gasoline, meanwhile, peaked at $2.29 and bottomed out at $2.21. Despite a chillier than normal forecast for the Northeast, January natural gas fell 19 cents to settle at $4.21 per thousand cubic feet. The natural gas futures price fluctuated from $4.17 to $4.49.

Posted courtesy of Rigzone.Com


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Matt Nesto: Where is Crude Oil and Gold Headed on Tuesday?

CNBC's Matt Nesto discusses the day's activity in the commodities markets, and looks at where oil and gold are likely headed tomorrow.



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Stock Market and Commodities Commentary For Monday Evening Nov. 29th

The S&P 500 index closed higher due to short covering on Monday as it consolidated some of last Friday's decline. The mid-range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI are neutral to bullish signaling that a short term low might be in or is near. Closes above last Monday's high crossing at 1206.00 would temper the near term bearish outlook. If December renews the decline off this month's high, the 25% retracement level of the July-November rally crossing at 1169.37 is the next downside target. First resistance is last Monday's high crossing at 1206.00. Second resistance is this month's high crossing at 1224.50. First support is the reaction low crossing at 1175.20. Second support is the 25% retracement level of the July-November rally crossing at 1169.37.

Crude oil closed higher on Monday as it extends last week's rebounds off the 50% retracement level of the August-November rally crossing at 81.14. The high range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI have turned bullish signaling that sideways to higher prices are possible near term. If January extends today's rally, November's high crossing at 89.10 is the next upside target. Closes below the 10 day moving average crossing at 82.97 would temper the friendly outlook. First resistance is today's high crossing at 85.83 Second resistance is November's high crossing at 89.10. First support is the 10 day moving average crossing at 82.97. Second support is last Tuesday's low crossing at 80.28.

Natural gas closed sharply lower due to profit taking on Monday as it consolidates some of the rally off November's low. Stochastics and the RSI are overbought and turning bearish signaling that a short term top is in or is near. Closes below the 20 day moving average crossing at 4.206 are needed to confirm that a short term top has been posted. If January extends the rally off October's low, the 38% retracement level of the June-October decline crossing at 4.654 is the next upside target. First resistance is last Wednesday's high crossing at 4.515. Second resistance is the 38% retracement level of the June-October decline crossing at 4.654. First support is the 20 day moving average crossing at 4.206. Second support is November's low crossing at 3.853.

Gold closed higher due to short covering on Monday as it consolidates some of last Friday's decline. The high range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near term. If December renews the rally off November's low, the reaction high crossing at 1388.10 is the next upside target. If December renews the decline off November's high, the reaction low crossing at 1315.60 is the next downside target. First resistance is last Tuesday's high crossing at 1382.90. Second resistance is the reaction high crossing at 1388.10. First support is the reaction low crossing at 1329.00. Second support is the reaction low crossing at 1315.60.

The U.S. Dollar closed higher on Monday as it extends this month's rally. The high range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term. If December extends this month's rally, the 50% retracement level of this year's decline crossing at 82.18 is the next upside target. Closes below the 20 day moving average crossing at 78.47 would confirm that a short term top has been posted. First resistance is today's high crossing at 81.22. Second resistance is the 50% retracement level of this year's decline crossing at 82.18. First support is the 10 day moving average crossing at 79.53. Second support is the 20 day moving average crossing at 78.47.


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Crude Oil Prices Rise to Two Week High on U.S. Retail Sales, Irish Bailout

Crude oil rose to a two week high as U.S. consumers spent more over the Thanksgiving weekend than last year, a sign confidence in the economy is strengthening. Oil climbed above $85 a barrel as the average U.S. shopper increased purchases by 6.4 percent from the 2009 period, a report from the National Retail Federation showed. Crude also advanced amid speculation that colder than normal weather may boost demand for heating fuel in the eastern U.S. and Europe.

“People are looking at a pretty decent retail environment, and that’s giving oil a boost,” said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. “Cold weather is more bullish earlier in the season than later. If people turn on their heaters early and they stay on, that’s good for the season.” Oil for January delivery climbed $1.97, or 2.4 percent, to $85.73 a barrel on the New York Mercantile Exchange, the highest settlement since Nov. 11. Futures have gained 13 percent in the past year.

Brent crude for January settlement rose $1.76, or 2.1 percent, to $87.34 a barrel on the ICE Futures Europe exchange in London. About 212 million shoppers went to stores and websites over the holiday weekend in the U.S., on average spending $365.34, the Washington based National Retail Federation reported. Temperatures in the eastern half of the U.S. will be below normal from Dec. 7 to Dec. 13, according to a forecast issued today by the U.S. Climate Prediction Center in Camp Springs, Maryland......Read the entire article.


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Gold's Trading Range

Jeff Friedman, senior market strategist at Lind-Waldock reveals why he thinks gold prices will reach for $1,380 an ounce.



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Phil Flynn: Bailout Bounce

There is nothing like a big bailout to get energy traders' minds off of the dangerous world we live in. Oil prices are defying a stronger dollar as the market is rallying on the news that Europe finalized a 67.5 billion Euro bailout of Ireland and created a plan that could have bondholders taking haircuts to help pay for their solvency.

Yet oil may also be getting a geo-political bounce as tension rise in the world and I am not just talking about the Korean Peninsula. A revelation from Wiki-Leaks may add to tensions in the Middle East and perhaps even threaten the delicate peaceful balance that sort of exits there. Reuters News reported that, “Saudi King Abdullah has repeatedly urged the United States to attack Iran’s nuclear programs, according to a vast cache of diplomatic cables released on Sunday in an embarrassing leak that undermines U.S. diplomacy.

The more than 250,000 documents, given to five media groups by the whistle blowing website Wiki Leaks, provide candid and at times critical views of foreign leaders as well as sensitive information on terrorism and nuclear proliferation filed by U.S. diplomats, according to The New York Times. The White House condemned the release by Wiki Leaks and said the disclosures may endanger U.S. informants abroad.” It could also create tension in the OPEC cartel as Iran may try to retaliate against Saudi Arabia in some way.

The Saudis already have their hands full fighting Al-Qaeda and other terrorist rightfully fear a nuclear armed state sponsor of terror like Iran. The Saudi King in the leaked memo said that the US should, “cut off the head of the snake”. It’s good to be back! Make sure you are signed up for Phil's daily trade levels! He can be reached at pflynn@pfgbest.com. Also make sure you catch Phil on the Fox Business Network where you can see him every day!


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Crude Oil , Gold and Natural Gas Technical Outlook For Monday Nov. 29th

Crude oil was higher overnight as it extends last week's short covering rebound off the 50% retracement level of the August-November rally crossing at 81.14. Stochastics and the RSI have turned bullish signaling that sideways to higher prices are possible near term.

Closes above the 20 day moving average crossing at 84.69 are needed to confirm that a short term low has been posted. If January renews this month's decline, the 62% retracement level of the August-November rally crossing at 79.24 is the next downside target.

First resistance is the 20 day moving average crossing at 84.69.
Second resistance is the reaction high crossing at 85.75.

Crude oil pivot point for Monday morning is 83.69

First support is last Tuesday's low crossing at 80.28.
Second support is the 62% retracement level of the August-November rally crossing at 78.56.

Gold was lower overnight as it continues to correct some of the rally off the mid-November low. Stochastics and the RSI are turned neutral signaling that sideways to lower prices are possible near term.

If December renews this month's decline, the reaction low crossing at 1315.60 is the next downside target. If December extends the rebound off the mid-November low, the reaction high crossing at 1388.10 is the next upside target.

First resistance is last Tuesday's high crossing at 1382.90.
Second resistance is this month's high crossing at 1424.30.

Gold pivot point for Monday morning is 1,362.30

First support is the 25% retracement level of this year's rally crossing at 1330.20.
Second support is the reaction low crossing at 1315.60.

Natural gas was higher overnight and is poised to extend this month's rally. Stochastics and the RSI are overbought, diverging but are turning neutral signaling that sideways to higher prices are possible near term.

If January extends the aforementioned rally, the 38% retracement level of the June-October decline crossing at 4.654 is the next upside target. Closes below the 20 day moving average crossing at 4.234 would confirm that a short term top has been posted.

First resistance is last week's high crossing at 4.515
Second resistance is the 38% retracement level of the June-October decline crossing at 4.654

Natural gas pivot point for Monday morning is 4.411

First support is the 10 day moving average crossing at 4.318
Second support is the 20 day moving average crossing at 4.234




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Gold/Silver – Controlling Your Trades, Money & Emotions

Last week we had typical pre-holiday light volume trading going into US Thanksgiving. The previous week I warned every one to trade with extreme caution because of the light volume and the fact that the market is on the verge of a sizable drop for both stocks and commodities. Any price action could not be taken seriously because of the light volume. We will not know until later this coming week what the big money wants to do… Buy or Sell, also what the manipulators will do… Seems like there are a lot of wild cards out there with Europe issues and both unemployment and payroll numbers out on Friday morning.

Below are a few charts showing my intermediate term outlook for gold and silver.

Gold & Silver Futures – Daily Chart
You can see both metal are showing a possible reversal head and shoulders pattern. While they have yet to confirm and close below the neck line we must be aware of this pattern and the risk/potential it provides us with. Both metals are still in an uptrend but showing signs of weakness.

US Dollar Index – Weekly Chart
This chart is not really that helpful for trading stocks, commodities or options right now but I wanted to post it because it allows me to show you how I analyze the market and my trades.

As you can see, the past 3 weeks have been in a strong uptrend reaching the first resistance level. The point of this chart is to show you that if you step out to the next longer time frame you can get a solid feeling of where an investment will find major support and resistance levels. Any investment not matter if it’s a stock, commodity or currency, if the price is trading in the middle of a large range like this chart you should not be taking large positions because it almost becomes a 50/50 bet on the market which is not a good winning strategy unless you are very experienced at managing your trades and money.

If you are going to trade then you want to focus on the underlying trend and you do that by looking at the next larger time frame. For example: if you focus on trading the daily chart, then you must step back each week and review the weekly chart to be sure you are trading with the underlying trend which is up for the dollar right now.

Weekend Trading Ideas:
Tuesday morning we saw the SP500 gap lower and continue to sell off. Traders started panicking out of their long positions and we could see it using the intraday market internals charts, which I cover each morning in the pre-market trading videos. Me being a contrarian (buying into market fear, selling into market strength) I used that high level of fear in the market along with the expected light volume holiday week ahead as an excuse to book profits near the lows on SP500 using the SDS bear fund allowing us to profit from the falling market. I feel we are going to have some crazy moves on the markets going into year end and it should be a lot of fun if done correctly.

Trading in general is a very difficult task especially if you are doing it for a living and planning on using your monthly income to pay bills, salaries etc… We all know the stress which comes with trading and if do not have a solid trading strategy, rules and cannot properly manage yourself (emotions) then you are most likely running into problems like over trading, getting shaken out of trades easily, and taking bigger risks than your account can handle. Each of these cause more traders to blow up their accounts and big up on trading.

I am giving away my book on how you can control your trades, money and emotions. This short and to the point guide is full of my trading techniques, tips and thoughts which will help you get a handle of your emotions turning the market noise into music.

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Reuters: Crude Oil Approaches Two Week High on Ireland Rescue

Crude oil rose past $84 on Monday after the European Union approved a rescue for Ireland and outlined a permanent system to resolve the euro zone's debt crisis, providing some confidence that energy demand growth will remain resilient next year. U.S. crude for January rose as much 0.8 percent to $84.46 a barrel, nearing Friday's peak of $84.53, the highest intraday price since November 16, and was up 52 cents at $84.28 by 9:09 p.m. EST. Prices reached a two year high of $88.63 on November 11.

ICE Brent for January rose 57 cents to $86.15, returning to positive territory as the dollar pared gains. Finance ministers from the 16 nation euro zone, anxious to prevent market contagion engulfing Portugal and Spain, unanimously endorsed an emergency loan package of 85 billion euros ($115 billion) to help Dublin cover bad bank debts and bridge a huge budget deficit.

"The southern European sovereign debt crisis would have to take a severe turn for the worse to derail positive commodity price trends that are finding strong support from improving fundamentals and positive market sentiment toward growth assets" following the second wave of U.S. expansionary monetary policy, Barclays Capital analysts, including Kevin Norrish, said in a report on Monday.

Still, some market participants were wary that the package for Ireland would fail to end Europe's credit problems, citing the Greek crisis as a precedent of how markets intially reacted positively to a bailout and then slumped. "It is just a relief rally, but there are still so many structural problems that people are already targeting other dominoes like Portugal and Spain," said Michelle Kwek, an analyst at Informa Global Markets in Singapore.

Currency and bond traders doubted the deal was enough to prevent fiscally pressured Portugal and Spain from being next in line to suffer a debt crisis. "Markets are not believing measures will be enough to contain the crisis, and that also combines with the tensions in Korea. You wouldn't want to be punting on anything," Kwek said.......Read the entire article.


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