Crude Oil, Natural Gas and Gold Market Commentary For Thursday Morning Dec. 2nd

Crude oil was slightly lower due to profit taking overnight as it consolidates some of the rally off last week's low. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term.

If January extends the rally off last week's low, November's high crossing at 89.10 is the next upside target. Closes below the 10 day moving average crossing at 83.82 would temper the near term friendly outlook.

First resistance is the overnight high crossing at 87.10
Second resistance is November's high crossing at 89.10

Crude oil pivot point for Thursday morning is 85.78

First support is the 20 day moving average crossing at 84.95
Second support is the 10 day moving average crossing at 83.82

Natural gas was higher overnight as it consolidates some of the decline off last week's high. However, stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices are possible near term.

If January renews this week's decline, November's low crossing at 3.853 is the next downside target. Closes above the 10 day moving average crossing at 4.312 would temper the near term bearish outlook.

First resistance is the 10 day moving average crossing at 4.312
Second resistance is last week's high crossing at 4.515

Natural gas pivot point for Thursday morning is 4.252

First support is Tuesday's low crossing at 4.126
Second support is November's low crossing at 3.853


Gold was higher overnight as it continues to rebound off the mid-November low. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term.

If December extends the rebound off the mid-November low, November's high crossing at 1424.30 is the next upside target. Closes below the 10 day moving average crossing at 1370.40 would confirm that a short term top has been posted.

First resistance is Wednesday's high crossing at 1396.60
Second resistance is November's high crossing at 1424.30

Gold pivot point for Thursday morning is 1,389.90

First support is the 10 day moving average crossing at 1370.40
Second support is the 25% retracement level of this year's rally crossing at 1330.20


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Commodity Corner: Crude Oil Up 3%

Crude oil rebounded Wednesday on positive manufacturing data from China, encouraging U.S. employment data, and word that the United States may join a European bailout program. Oil for January delivery rose $2.64 to settle at $86.75 a barrel. One factor providing momentum for oil was a monthly update of the China Purchasing Managers Index (PMI).

According to the China Federation of Logistics and Purchasing, the PMI increased by 0.9 percent in November. Also benefiting oil was an ADP Employer Services report indicating that private sector employers in the U.S. added 93,000 jobs last month. The finding was above expectations.

In addition, the prospect of U.S. backing for faltering banks in European Union countries proved bullish for oil. Citing an unnamed U.S. official, Reuters reported Wednesday that the U.S. might augment a $980 billion dollar fund to bail out heavily indebted EU region banks using money from the International Monetary Fund (IMF). Other news reports, however, quoted a Treasury Department official who denied that talks were underway to contribute funds to the so called European Financial Stability Facility. January crude traded from $83.63 to $86.62.

Bullish sentiment also was evident in the natural gas futures price. January natural gas increased nine cents to settle at $4.27 per thousand cubic feet. Projections of below normal temperatures through next week in the Northeast and Midwest provided an impetus for Wednesday's increase. The natural gas futures price fluctuated from $4.16 to $4.32.

Gasoline for January delivery also ended the day higher, gaining 13 cents to settle at $2.30 a gallon. It peaked at $2.31 and bottomed out at $2.18. The December gasoline contract, which expired Tuesday, finished at $2.27.

Posted courtesy of Rigzone.Com


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Bloomberg: Crude Oil Rises on Gain in Chinese Output, Reduced European Debt Concern

Crude oil climbed on greater than forecast growth in U.S. private employment and Chinese manufacturing and on signals the European Central Bank will act to prevent the spread of the region’s debt crisis. Prices surged as much as 2.8 percent as companies in the U.S. boosted payrolls the most since November 2007, according to figures from ADP Employer Services. Chinese manufacturing grew at the fastest rate in seven months. Futures reached the day’s high after Goldman Sachs & Co. said oil will average $110 a barrel in 2012, up from a forecast $100 of a barrel next year.

“As the global economy goes, so goes oil,” said Andre Julian, chief financial officer and senior market strategist at OpVest Wealth Management in Irvine, California. “The economic numbers in China and elsewhere today have been very strong and point to accelerating growth.” Crude oil for January delivery increased $2.16, or 2.6 percent, to $86.27 a barrel at 12:30 p.m. on the New York Mercantile Exchange. Prices climbed to $86.47, the highest level since Nov. 12.

Brent crude oil for January settlement rose $2.32, or 2.7 percent, to $88.24 a barrel on the London based ICE Futures Europe exchange. Goldman increased its forecast for U.S. gross domestic product growth next year to 2.7 percent from 2 percent. The U.S. economy will expand 3.6 percent in 2012, according to a report sent to Goldman Sachs clients today. The global economy will expand 4.6 percent next year and 4.8 percent in 2012, the bank said.

“Goldman has been banging the bull drum all year,” said Phil Flynn, a Chicago-based analyst and trader with investment adviser PFGBest.......Read the entire article.


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Is Gold Headed For a Major Correction?

David Banister of Market Trends.Com has been hitting gold spot on. And we are lucky enough to get another guest post from him. Let's see what David is thinking about the possibility that gold will head to 1480-1525 before a major correction......

Gold has been consolidating other than a spike to an intermediate wave 3 top of $1424, for about 7 weeks or so now. It’s typical to see Fibonacci periods of time as part of consolidations whether it be an individual stock or a precious metal in this case. Gold was overbought at the $1425 pivot highs a few weeks ago, and that terminated what I label a “wave 3″ pattern. This led us into a 4th wave corrective pattern which we remain in now. My worst case pivot low is expected at $1,321 and so far we have seen $1,331 an ounce and then an ensuing bounce to $1370 ranges.

In the intermediate term then, I’m looking for further consolidation likely for another week or so followed by a breakout over $1425 leading to my objectives of $1480-$1525 to complete the entire rally from the $1040 lows in February of this year. Many are starting to get bearish on Gold and Silver up here, and to me that is bullish and indicative of “4th wave mentality”. In a 4th wave, there is growing bearish sentiment, but not so much as to topple the bull structure.

To wit, last week in my ATP service I recommended a brand new Core Position in a Gold,Silver stock and it rallied as much as 40% intra-week at it’s highs. We are in a super bull market for Gold stocks as I outlined in August of 2009, and we have another four years left to go. I’m seeing alot of amazing chart patterns in the Junior space that are in relentless climbs. Owning the the explorers that are finding the Gold is how best to take advantage of the remaining four years. At ATP, we are exposed to Rare Earths, Silver, Gold, and Oil and Gas related plays in our Core Positions. Make sure you own hard assets and precious metals resources one way or another. My silver forecast in late August was basically predicated on the small investor swarming into the Silver market to buy up coins, look for that to continue and Silver to be over $30 in the not too distant future.

Below is my updated Gold forecast using a weekly chart, remember to Keep it Simple!

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Phil Flynn: A Study In Contradictions

It's no wonder that oil is on track to have one of its flattest trading years since 2003. The last minute late November sell off was another sign that the bulls and bears lack true conviction as they to make sense of some obvious and some obscure fundamentals that are driving the price in this somewhat wide swinging emotional oil market. In fact the trading swan song for November and the first of December snap back really symbolizes omneity of the entire year in the oil market. In a normal time, better than expected readings on U.S. Manufacturing and consumer confidence might inspire an oil rally. You might think that oil would celebrate the fact that business expanded at a faster pace than thought for as the Institute for Supply Management-Chicago Inc. rose to 62.5 the highest since April from 60.6 in October increasing hopes that manufacturers would hire and invest in new equipment as their business booms.

Or perhaps the market might take heart from the fact that consumer confidence soared to a reading of 54.1, the highest level since June in the heart of the Christmas shopping season. Yet with the dark clouds emanating out of Europe and commodity funds getting frustrated with their $100 barrel oil bets, prices drove lower as funds wanted to take what profit incentive fees they could before they go flat for the holiday and start shopping for that GI Joe with the Kung-Fu grip for their kids. That was the case even as the dollar rallied, capping off a month where the dollar rallied off its QE2 lows hitting the highest levels since the Fed hinted that they would print more money as investors seek shelter from economic storm clouds in Europe. The oil bulls lost their moxie as risk in the......Read the entire article.

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Crude Oil, Natural Gas and Gold Market Commentary For Wednesday Morning Dec. 1st

Crude oil was higher overnight and is poised to extend the rally off last week's low. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term.

If January extends the rally off last week's low, November's high crossing at 89.10 is the next upside target. Closes below the 10 day moving average crossing at 83.12 would temper the near term friendly outlook.

First resistance is Tuesday's high crossing at 85.90
Second resistance is November's high crossing at 89.10

Crude oil pivot point for Wednesday morning is 84.52

First support is the 10 day moving average crossing at 83.12
Second support is last Tuesday's low crossing at 80.28

Gold was higher overnight as it continues to rebound off the mid-November low. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term.

If December extends the rebound off the mid-November low, November's high crossing at 1424.30 is the next upside target. If December renews the decline off last month's low, the reaction low crossing at 1315.60 is the next downside target.

First resistance is the overnight high crossing at 1396.60
Second resistance is November's high crossing at 1424.30

Gold pivot point for Wednesday morning is 1,380.40

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 as it consolidates some of the decline off last week's high. However, stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term.

If January extends this week's decline, November's low crossing at 3.853 is the next downside target. Closes above the 10 day moving average crossing at 4.295 would temper the near term bearish outlook.

First resistance is the 10 day moving average crossing at 4.295
Second resistance is last week's high crossing at 4.515

Natural gas pivot point for Wednesday morning is 4.187

First support is Tuesday's low crossing at 4.126
Second support is November's low crossing at 3.853


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Debt Contagion Spreads to Italy, Belgium. Global Markets Tumble

Financial markets remained under pressure with Wall Street tumbling and the dollar soaring to a 2 1/2 month high against the euro. Debt contagion accelerated further in the European periphery. In bond markets, US Treasuries and German bunds strengthened while Spanish and Italian yield spreads widened to record highs. In the commodity sector, oil prices plummeted as bourses weakened. Moreover, industry report showed that oil inventories rose last week. The front month contract for WTI crude oil slipped to as low as 83.55 before closing at 84.11, down -1.89%. Precious metals rose across the board with the benchmark gold contract surging +1.47% to settle at 1386.1. Benchmark contracts for silver, platinum and palladium also gained +3.91%, 1.33% and 1.17% respectively.

Sovereign concerns about debt-ridden European countries remained elevated even though a bailout program of 85B euro for Ireland has been approved. The rescue program's impacts on easing worries were short-lived and the market soon began speculating Portugal as the next country following Ireland to seek help from EU/IMF. Look at bond markets, yield spreads between peripheral European bonds and German bunds continued to widen. While Greek and Irish spreads were the widest, Spanish and Italian spreads accelerated and reached record highs. A similar picture was seen in CDS spreads and we find it particularly interesting that Italian and Belgium spreads were widening fast.

In Asia, China reported the Purchasing Managers' Index (PMI) expanded to 55.2 in November from 54.7 a month ago. This is the strongest reading in 7 months and signaled the country's manufacturing activities have been growing robustly despite the government measures. Asian shares fluctuated after the report. While investors were encouraged by the strong growth, it also fueled tightening concerns as the government may accelerate measures to control inflation.

Gauges for manufacturing activities will also be released in Europe and the US later. In the US, ISM manufacturing index probably eased to 56.5 in November from 56.9 a month ago. We will also get some employment data in the NY session. ADP will probably report +65K addition of payrolls last month while Challenger's estimates for job cuts may have been lowered from 31.8% in October.

We will also get EIA's weekly oil inventory report. The market forecasts crude and distillate inventories fell while gasoline stockpiles gained in the week ended November 26. The industry-sponsored API estimated crude inventory drew -1.4 mmb while both gasoline and distillate recorded stock builds.

Let's Look at The Charts....5 Year Sovereign CDS Spread and 10 Year Yield Spreads

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Commodity Corner: Crude Oil Tumbles on Lingering Debt Concerns

Light, sweet crude futures fell Tuesday as concern over the European debt crisis resurfaced after the euro plummeted to its lowest level in 10 weeks. Led by declines in heating oil and gasoline futures [which expired at close] and crude oil tumbled more than a dollar a barrel in the last half hour of Tuesday's trading session. Oil prices for January delivery settled at $84.11 a barrel, 1.9 percent lower than Monday.

Fear lingers as investors worry that other countries, such as Spain, Portugal, or Italy, might also need financial assistance after Ireland’s massive bailout package earlier this week. The euro lost 0.9 percent Tuesday, hitting a two month low against the dollar. The greenback rose 0.5 percent on the U.S. dollar index, which gauges the dollar to an array of six other currencies. As the dollar strengthens, crude becomes more expensive for foreign buyers and dollar denominated commodities lose their appeal.

The intraday range for crude futures was $83.55 to $85.90 Tuesday. Front month December gasoline settled nearly two cents lower at $2.26 a gallon on the New York Mercantile Exchange. The December contract for gasoline expired at Tuesday's settlement. In spite of the global economic crisis, gasoline gained 6.3 percent this month the largest since September. Gasoline fluctuated between $2.23 and $2.28 Tuesday.

Natural gas futures also tumbled Tuesday, as stockpiles exceeded expectations of an increase in heating demand due to the forecasted colder than normal temperatures. Although natural gas prices typically correlate with heating demand in the winter, analysts predict that the surplus in supplies has limited rallies; however, they remain uncertain about long term predictions. January Natural gas traded lower for the second consecutive session at $4.18 per thousand cubic feet. It peaked at $4.25 and bottomed out at $4.13 Tuesday.

Posted courtesy of Rigzone.Com

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Sharon Epperson: Where is Crude Oil and Gold Headed on Wednesday?

CNBC's Sharon Epperson discusses the day's activity in the commodities markets, and looks ahead to where oil and gold are likely headed Friday.



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Stock Market and Commodities Commentary For Tuesday Evening Nov. 30th

The S&P 500 index closed lower on Tuesday and the low range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term. 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. Closes above last Monday's high crossing at 1206.00 would temper the near term bearish outlook. 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 lower due to profit taking on Tuesday as it consolidates some of last week's rally. The low range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. If January extends the aforementioned rally, November's high crossing at 89.10 is the next upside target. Closes below the 10 day moving average crossing at 82.88 would temper the friendly outlook. First resistance is today's high crossing at 85.90 Second resistance is November's high crossing at 89.10. First support is the 10 day moving average crossing at 82.88. Second support is last Tuesday's low crossing at 80.28.

Natural gas closed lower on Tuesday as it consolidates some of the rally off November's low. Stochastics and the RSI are turning bearish signaling that sideways to lower prices are possible near term. Multiple closes below the 20 day moving average crossing at 4.211 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 today's low crossing at 4.126. Second support is November's low crossing at 3.853.

Gold closed higher on Tuesday as it extends the rally off November's low. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near term. If December extends the rally off November's low, November's high crossing at 1424.30 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 today's high crossing at 1390.10. Second resistance is November's high crossing at 1424.30. 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 Tuesday as it extends this month's rally. The high range close sets the stage for a steady to higher 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 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 78.69 would confirm that a short term top has been posted. First resistance is today's high crossing at 81.53. 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 79.73. Second support is the 20 day moving average crossing at 78.69.


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