Weekly Futures Recap with Mike Seery

We’ve asked our trading partner Michael Seery to give our readers a weekly recap of the Futures market. He has been a commodity Analyst for close to 15 years and has extensive knowledge of all of the commodity and option markets. Michael frequently appears on multiple business networks including Bloomberg news, Fox Business, CNBC Worldwide, CNN Business, and Bloomberg TV. He is also a guest on First Business, which is a national and internationally syndicated business show.

Crude oil futures for the November contract are flirting with 4 month lows finishing lower by $1.10 at 101.90 this Friday afternoon in New York as global supplies are high while demand remains weak pressuring prices in recent months.

Crude oil is trading below its 20 day and right at its 100 day moving average and I’m still recommending traders to sell the futures contract and place a stop at the 10 day high which stands at 104.38 and I think there is a chance of crude oil dropping quickly possibly down to the $90 price level as the geo political news is bearish with Syria a distant memory.

I love trades that have a great risk/reward scenario and crude oil can pay you off big time if you are right on the trade while the risk at the 10 day high at the time of my recommendation earlier in the week was only $500.

The coffee market which I’ve talked about previously in many blogs continues to move sideways in a nonvolatile trading action up 200 points for the trading week trading at 116.60 a pound up 200 points in the December contract this Friday afternoon, however it is right at its 20 day but still below its 100 day moving average as the Vietnamese harvest is only a couple weeks away which could put harvest pressure on prices again with the possibility of going down to 100 in my opinion.

There is very little interest in coffee at this time and I’ve been trading for over 20 years and I can’t remember such a nonvolatile market as coffee generally is one of the most volatile markets in the world, however with huge supplies globally and excellent weather across the globe this market still looks weak hitting another 4 1/2 year low this week and a very bearish trade on Thursday when prices were up 300 points and then settled lower meaning traders are taking advantage of any higher prices to sell but keep an eye on this market I still think if you’re longer term trader buying coffee if prices reach 100 could pay you off in the long run.

Here is more of Mike's calls on commodities this week.

 

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Who Knows More: The S&P 500 Options or Financial Pundits?

By now the major media outlets have made sure to inform the public that the U.S. government is shut down, or partially shut down depending on your political perspective. Most financial pundits are looking to the recent past for clues about what to expect in the future.

While the situation appears to be similar to what we witnessed in 2011 with the debt ceiling debacle, the outcomes may be significantly different. I am a contrarian trader by nature, and as such I am constantly expecting for markets to react in the opposite way from what the majority of investors expect.

A significant number of financial pundits and writers all have a similar perspective about what is likely to occur. It seems most of the financial punditry believe that until there is a resolution in the ongoing government debacle, market participants should expect volatility to persist. Some of the talking heads are even calling for a sharp selloff if no decision on the debt ceiling is made by early next week.

The debt ceiling decision needs to be made by midnight on October 17th otherwise the first ever default on U.S. government debt could occur. Thus far, the volatility index (VIX) has moved higher as investors and money managers use the leverage in VIX options to hedge their long exposure.

As can be seen here, we are seeing the VIX trade at the second highest levels so far in 2013.....Read the entire article "Who Knows More: The S&P 500 Options or Financial Pundits?"



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COT Market Summary for Tuesday October 8th - Crude Oil, Natural Gas, SP 500, Gold and Coffee

November crude oil closed higher on Tuesday as it consolidates above the 10 day moving average crossing at 103.07. The mid range close sets the stage for a steady to higher opening when Wednesday's night session begins. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. Closes above the 20 day moving average crossing at 104.41 are needed to confirm that a low has been posted. If November renews the decline off August's high, the 50% retracement level of the April-August rally crossing at 98.71 is the next downside target. First resistance is the 20 day moving average crossing at 104.41. Second resistance is the reaction high crossing at 108.15. First support is the 38% retracement level of the April-August rally crossing at 102.43. Second support is the 50% retracement level of the April-August rally crossing at 98.71.

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November Henry natural gas closed higher on Tuesday and above the 20 day moving average crossing at 3.654 confirming that a short term low has been posted. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are turning bullish signaling that sideways to higher prices are possible near term. If November extends today's rally, September's high crossing at 3.892 is the next upside target. If November renews the decline off September's high, the 75% retracement level of the August-September rally crossing at 3.436 is the next downside target. First resistance is today's high crossing at 3.730. Second resistance is September's high crossing at 3.892. First support is the reaction low crossing at 3.450. Second support is the 75% retracement level of the August-September rally crossing at 3.436.

The December S&P 500 closed lower on Tuesday as it extended the decline off this month's high. Today's low range close sets the stage for a steady to lower opening when Wednesday's night session begins trading. Stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices are possible near term. If December extends the decline off this month's high, August's low crossing at 1621.00 is the next downside target. Closes above the 20 day moving average crossing at 1687.11 would confirm that a short term low has been posted. First resistance is the 20 day moving average crossing at 1687.11. Second resistance is August's high crossing at 1726.50. First support is today's low crossing at 1651.00. Second support is August's low crossing at 1621.00.

December gold closed lower on Tuesday and the high-range close sets the stage for a steady to lower opening when Wednesday's night session begins trading. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near term. Closes above the 20 day moving average crossing at 1324.30 are needed to confirm that a short term low has been posted. If December renews the decline off August's high, August's low crossing at 1271.80 is the next downside target. First resistance is the 20 day moving average crossing at 1324.30. Second resistance is the reaction high crossing at 1353.80. First support is the reaction low crossing at 1276.90. Second resistance is August's low crossing at 1271.80.

December coffee closed higher on Tuesday. The high-range close set the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are turning bullish signaling that a low might be in or is near. Closes above the reaction high crossing at 11.92 are needed to confirm that a low has been posted. If December extends this summer's decline, monthly support crossing at 10.21 is the next downside target.

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Weekly Commodities Recap with Mike Seery - Gold, Silver, Coffee, Sugar,

It's time for our weekly commodities market recap with our trading partner Mike Seery......

The gold market in the December contract sold off $30 dollars an ounce this week at 1,316 as the U.S dollar hit a fresh 10 month low not influencing gold prices just yet. Gold made a new 10 week low on the night session this week trading as low as 1,276 then rallied sharply as investors came rushing back into this market and I am still recommending to sick on the sidelines because of this choppy pattern where gold is down $40 dollars and the next day its up $30 but I still do think prices look weak and I think they still could re-test the summer lows around 1,200. If you are short the futures market in the December contract I would place my stop loss at 1,354 which was Mondays high minimizing your risk in case the trend changes. This market is very volatile with high risk so make sure you under trade meaning don’t lose more than 2% of your account balance on any given trade. TREND: LOWER –CHART STRUCTURE: EXCELLENT

Silver futures ended down 12 cents for the week in the December contract at 21.72 an ounce and in my opinion the panic selling on October 1st for no reason might have created a spike low on the daily charts as the U.S dollar broke 80 for the 1st time in 10 months. As I’ve stated in many previous blogs I think investors should take advantage of big down days because silver has a lot of bullish fundamentals which in the long run could push prices higher, however gold still looks weak to me as money seems to be going into the stock market which was sharply higher today and out of gold lately which is also keeping a lid on silver prices here in the short term. The silver market is very sensitive to a strong or weak dollar and if you do some homework and look at some historical charts you will see a rising silver market when the U.S dollar declines. TREND: NEUTRAL–CHART STRUCTURE: EXCELLENT

Sugar futures settled last Friday at 17.74 a pound going out today at 18.45 continuing its bullish trend hitting a 5 1/2 month high still trading above its 20 and 100 day moving average. Prices tumbled about 60 points last Friday just missing the 10 day low but then on Monday prices rallied about 60 points so if you’re still in this market I would still keep my stop below the 10 day low as prices have come alive to the upside as volatility has come back into this market. Sugar prices went up 4 straight days before profit taking took place finishing down 5 points at 18.48 and I think the next major resistance is around 19/19.50 as the U.S dollar is hitting 10 month lows which is starting to spur some commodity prices higher especially sugar. TREND: HIGHER –CHART STRUCTURE: EXCELLENT

Coffee futures this week continued their sideways trading action settling last Friday at 113.70 basically unchanged for the trading week settling at 114.15 a pound in the December contract and at this time there is very little interest in this market at this point as volatility is as low as I can ever remember historically. Coffee prices are right at 4 ½ year lows as huge crops around the world including Vietnam have put ample supplies onto the market which is why prices are so depressed at this time. If you are interested in getting long the coffee market I would look at call options at least 6 months out and buy them at the money limiting your risk to what the premium costs because premiums are historically cheap due to low volatility. The volatility in coffee at the present time is very small and I have been following coffee for 20 years and I believe volatility is going to come back into this sleeping giant and that usually means prices rise as interest comes back into the market. If you’re a longer term investor I would take advantage of coffee if prices dropped down into the 110 area remembering that coffee was trading at 300 just 3 years ago when supplies were much lower. TREND: LOWER –CHART STRUCTURE: EXCELLENT

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Citigroup Picks Winners and Losers Among U.S. Refiners

It may not be the gospel but we should pay attention as Citigroup picks winners and losers among U.S. refiners. Here is Citigroup's take on oil refiners. The firm expects to see a bottoming of earnings in Q4 for most names, but companies overweight the Midcontinent and/or Midwest could experience a difficult earnings environment through Q1 2014.

The diverging earnings performance will result in positive price appreciation for some refiners - such as Valero (VLO) and Tesoro (TSO), which earn upgrades to Buy - but underperformance for others, such as on Alon USA (ALDW), CVR Refining (CVRR), Holly Frontier (HFC) and PBF Energy (PBF), which will remain pressured by narrowing price differences between WTI and Brent crude.

TSO will benefit next year from a tighter gasoline market in California, and VLO will benefit from wider heavy light differentials in H2 2014 as increased Canadian heavy crude flows to the U.S. Gulf coast, Citi says.

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The Renminbi.....Soon to Be a Reserve Currency?

By John Mauldin

I get the question all the time: when will the Chinese renminbi (RMB) replace the US dollar as the major world reserve currency? The assumption behind such questions is almost always that the coming crisis in US entitlement programs will force the Fed to monetize even more debt, thereby killing the dollar. Or some derivative line of that thought. Contrary to the thinking of fretful dollar skeptics, my firm belief is that the US dollar is going to become even stronger and will at some point actually deserve to be the reserve currency of choice rather than merely the prettiest girl in the ugly contest – the last currency standing, so to speak.

But whether the Chinese RMB will become a reserve currency is an entirely different question. Of course it will, over time, but the question has always been when. There are some preconditions required for reserve currency status. Quietly, apart from anything that might happen to the US dollar, China is working to meet those conditions. Rather than wallowing in concerns about China's actions, we might opt for a more thoughtful and constructive response: to welcome the RMB to the reserve currency club and hope that it gets here soon. The world will be a better place when that happens. And off the radar screen, it may be happening right now. Today we look at global trade flows and international balances and try to imagine a world in which much "common wisdom" gets stood on its head. It should make for an interesting thought experiment, to say the least. (This letter will print a little longer than usual, as there are numerous charts and graphs.)

One of the prerequisites for a true reserve currency is that there must be a steady and ready supply of the currency to facilitate global trade. The United States has done its part in providing an ample supply of US dollars by running massive trade deficits with the rest of the world, primarily with oil-producing nations and with Asia (most notably China and Japan), for all manner of manufactured products. The US consumer has been the buyer of last resort for several decades (I say, somewhat tongue in cheek). Those dollars typically end up in the reserve balances of various producing nations and find their way back to the US, primarily invested in US government bonds. In an odd sense, the rest of the world has been providing vendor financing to the US, the richest nation in the world.



The US Trade Deficit Turns Positive

The US trade deficit (a key component of the current account deficit – see chart on next page) fell to an unprecedented percentage of GDP during the last decade, a development that normally heralds a significant drop in a currency. Fortunately, the "exorbitant privilege" of controlling the world's dominant currency in reserve holdings, international trade, and financial transactions has helped shield the US dollar from a hard correction; but that status quo is in danger. After flooding the world with US dollars for more than twenty years, the US has reduced its current account deficit by 58% since the 2007-2008 financial crisis began. Looking ahead, I and many other observers believe this measure can continue to improve, due two surprisingly positive factors:

1. The US energy boom in shale oil and gas. The US has caught an incredibly well-timed "lucky break" made possible by the combination of new exploration, production, and processing technologies (such as horizontal drilling and fracking) and by the serendipitous discovery of massive supplies of oil and gas, often in areas that already have significant infrastructure and/or are accessible at reasonable costs. This energy renaissance is part of the reality that has made Houston, Texas, the number one port in the United States, with even more growth coming in the near future when the Panama Canal expansion is completed in 2014. US manufacturers are turning less-expensive oil and gas into value-added fossil fuel products and exporting them to the world. This trend will become ever more important. Indeed, when the first LNG export terminal is opened in a few years, the additional exports will approach $80 billion a year, I am told. From one terminal! There are four in the process of being approved and more on the planning boards. The math is there for anyone to do. Spot prices in the US natural gas-producing areas are under $4. The Japanese are paying more than $14. Even I can do that arbitrage. Just for fun, the next graph, from the Energy Information Administration, shows the rise in spot gas prices over the last six months, from a level that had been far too low. It also shows the arbitrage potential that exists right here in the US.

2. The consequent renaissance in US manufacturing. With cheaper energy and new technologies like advanced robotics and 3D printing, the US is producing more than we ever have – we're just doing it with fewer people.

These two trends are bullish for the US in general. But that's another story for another letter. The point today is that the US current account deficit is collapsing. A positive trade balance is not an unthinkable prospect today. It is quite possible that the US will be more or less energy self-sufficient by the end of the decade and could have a positive trade balance not long after that. I should note that exporting value-added chemicals made from less expensive energy will contribute even more to the positive balance than simply selling the raw natural gas.

To continue reading this article from Thoughts from the Frontline – a free weekly publication by John Mauldin, renowned financial expert, best-selling author, and Chairman of Mauldin Economics – Please Click Here.

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Weekly Market Recap with Mike Seery - Gold, Silver and Coffee

Here is a weekly recap of the gold, silver and coffee markets from our trading partner Mike Seery.....  

Gold futures traded up $7 for the trading week and higher by $15 dollars an ounce this Friday afternoon at 1,340 still in a sideways to downward pattern & I am still advising traders to sit on the sidelines and wait for a real trend to develop, but I do believe that prices look weak at this level and are headed lower with the possibility of testing 1,290 once again. Gold is still trading below its 20 and 100 day moving average and it wouldn’t surprise me to see gold retest the June 28th low of 1,182 but that day prices closed at 1,225 & that’s only about $100 dollars away and I think in the long run if your bullish gold you probably want to see gold retest that level and rebound strongly confirming that the possibility of a long-term bottom would be in place. The chart structure in gold is improving which will allow you to place a closer stop loss in the futures market minimizing your risk especially if you trading the mini contract and the liquidity in the gold futures are outstanding as money flowed back into the stock market today and out of the precious metals. TREND: SIDEWAYS TO LOWER –CHART STRUCTURE: IMPROVING

The silver market was basically unchanged for the trading week and finished up 10 cents at 21.85 this Friday afternoon in New York in a real lack luster trade as volatility has slowed down in recent days but I don’t think that will last for long as silver is one of the most volatile commodities in the world on a daily basis. Silver futures are still trading below their 20 but right at their 100 day moving average with a possible retest of the recent low at 21.22 and is still looks relatively weak in my opinion but if you’re a long term investor I still believe silver prices are cheap & I do think prices will head higher eventually but they might retest the $20 level first in my opinion. Silver is extremely volatile and impossible to try & pick a top or bottom so the object is if your bullish is to try to buy near the bottom or what I still believe is to take advantage of big down days in silver. The most recent high in silver was 25.17 which was during the Syria situation so prices have dropped around $3.50 from those highs; however I think prices will chop around for a while and form a long term bottom at these levels. TREND: SIDEWAYS – CHART STRUCTURE: SOLID

The coffee market continues its bearish trend in New York this week trading as high as 119 on Wednesday in the December contract looking to possibly breakout to the upside but then prices got slammed hitting a 4 1/2 year low down another 180 points at 113.90 this Friday with the next major support between 100 – 110 & in my opinion it looks like were headed to those price levels. The coffee market has excellent chart structure allowing you to place a tight stop loss above 119 if you’re looking to get short risking around $2,000 per contract as rumors of a massive crop coming out of Vietnam possibility 29 million bags which is well above recent estimates of 27 million bags pushing prices lower and I still believe if prices get down to the 100 level & your long term investor prices look awful cheap at major yearly support. The biggest fundamental problem with coffee currently is supplies are huge with excellent growing conditions around the world which is keeping a lid on prices at this time. The one positive influence coffee has is the fact that all the bad news is already priced into the market and the fact that the U.S dollar is hitting another 8 month low today could start to support coffee and all the other commodities as well in my opinion. TREND: LOWER – CHART STRUCTURE: EXCELLENT

What do I mean when I talk about chart structure and why do I think it is so important when deciding to enter or exit a trade? I define chart structure as a slow and grinding up or down trend with low volatility and no chart gaps. Many of the great trends that develop have very good chart structure with many low percentage daily moves over a course of at least 4 weeks thus allowing you to enter a market and allowing you to place a stop loss with will be relatively close due to small moves thus reducing risk.

Charts that have violent up and down swings are not considered to have solid chart structure but markets that continue to trend like the current soybean complex allowing for you to place close stops as it continues to fall dramatically. I always like to place my stops at 10 day highs or 10 day lows and if the charts have a tight pattern that will allow the trader to minimize risk which is what trading is all about and if the chart has big swings your stop will be further away allowing the possibility of larger monetary loses.

Click here to see some more of Mike's calls on commodities to get you started for the work week.



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Will Russia Lose Its Oily Grip on Europe?

By Marin Katusa, Chief Energy Investment Strategist

Vladimir Putin is on a roll. Ever since the Russian president-turned-prime-minister-turned-president got into office 13 years ago, he's been deftly maneuvering Russia back into the ranks of global heavyweights. These days, he's averting cruise missiles from Syria before breakfast.


For a strategy to return Russia to superpower status, Putin had to look no farther than his own doctoral thesis, Mineral Natural Resources in the Development Strategy for the Russian Economy.

To say that Russia is rich in natural resources would be an understatement. In 2009, the former heart of the Soviet Union surpassed Saudi Arabia as the world's top oil producer—largely because Putin put reviving Russia's aging, neglected oil industry at the top of his priorities list.

The chart below shows proven oil reserves from the pre-Putin era to now. In just 16 years, they have risen by more than 30 billion barrels—which may still be too low, because it's not yet clear how much of the 90-odd billion barrels of undiscovered oil in the Arctic is actually recoverable. And in addition to new discoveries, the rising price of oil has made many formerly uneconomical deposits worth a second look.

As a result, about half of the more than 10 million barrels of oil per day (bopd) that Russia produces are exported… only to return as cash and, increasingly, a fistful of clout.

With Putin's monster deposits being the closest and most conveniently accessible,  many European nations rely heavily on oil and gas imports from Russia and the former Soviet states:

In a world where "he who has the energy wields the power," Russia's European customers find themselves in a very uncomfortable situation. How fragile their position is became clear in January 2009, when Putin, enraged over a price and debt dispute with Ukraine, shut off the natural-gas spigot, leaving customers in 18  European countries literally out in the cold.

Now the Russian vise grip on Europe is about to tighten even more as new energy markets are opening up to Moscow.

In January of this year, Russia's pipeline company, Transneft, completed the $25 billion, 4,700-kilometer-long East Siberia-Pacific Ocean (ESPO) pipeline, and in June, Putin signed one of the world's biggest oil deals ever.

For the next 25 years, Rosneft, Russia's state-controlled oil company, will deliver about 300,000 barrels per day to China—raising Russian oil exports to the Chinese by 75%. Besides China, the pipeline is also conveniently located for Japan, South Korea, and even the US West Coast.

This advantageous situation allows Putin to play hardball with Europe: If its customers there don't ante up what Moscow wants in price or pound of flesh, its income from ESPO customers could enable the country to twist the EU's taps closed.

It comes as no surprise that Europe is desperately trying to find a reasonably priced replacement for Russian oil. And in the very near future, it might just get its wish.

Hidden deep below Central European soil may be one of the largest oil deposits in the world, comparable in size to the legendary Bakken formation in North America. I call it the "next Bakken."
The full extent of this oil colossus is still unknown, but the final result could be one for the record books.  And a small company with 2 million acres of land in the "next Bakken" is hard at work to prove up the reserves and make itself and its shareholders rich in the process.

This is not a stab in the dark; there's no doubt that the oil is there. In the past, 93 million barrels of oil have been produced on the land the company owns now. But thanks to the company's state-of-the-art technology, management expects to be able to unlock many more millions or billions of barrels of to date inaccessible or uneconomical oil.

In fact, all of management is invested heavily in the company, which is always a good sign—one of its directors, for example, owns more than 1.2 million shares.

(By the way, the country where this deposit is located is forced to import more than 700,000 barrels of oil per day from Russia, a balance of power that could shift dramatically with this new windfall—so chances are good that the government will enthusiastically support the new oil production.)

Since our initial recommendation, Casey Energy Report subscribers already made gains of up to 66.4% from this company—but this is not a one-hit wonder whose fame fades as fast as it started. If the deposit indeed has what we think it does in recoverable reserves, the company could generate exceptional profits for years on end.

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COT Market Summary for Thursday Sept.26th - Crude Oil, Natural Gas, Gold and U.S. Dollar

The U.S. stock indexes closed firmer today. U.S. economic data for released Thursday was a mixed bag. The weekly jobless claims report came in better than expected, while the third quarter gross domestic product report came in a bit weaker than expected. The weekly jobless claims data was deemed fresher news than the GDP data and that helped to lift the stock indexes. In more “Fed speak” this week, Richmond Federal Reserve Bank president Jeffrey Lacker said Thursday he supported a faster tapering of the Fed's monthly bond buying program and said he is surprised the process has not already begun.

Fed governor Jeremy Stein also said Thursday the FOMC's decision not to taper last week was “a close call.” Notions are growing the Fed could indeed begin to “taper” yet this year. Meantime, the European Central Bank's executive board member said Thursday the ECB needs to continue its expansive monetary policies. The U.S. budget and debt ceiling issues have moved to the front burner of the market place. The U.S. government will have to at least partially shut down early next week if Congress does not pass a budget by that time.

Also, in mid October the U.S. will hit its borrowing limit. This matter could be significantly bearish for most markets in the near term, as there is talk some of the U.S. government will shut down for a short time next week.

November Nymex crude oil closed up $0.28 at $102.95 today. Prices closed nearer the session high today in quieter trading. Crude oil bulls still have the slight overall near term technical advantage but are fading.

November natural gas closed up 3.5 cents at $3.581 today. Prices closed near the session high on short covering after hitting a fresh five week low early on today. The natural gas bears have the overall near term technical advantage.

The December U.S. dollar index closed up 0.212 at 80.655 today. Prices closed nearer the session high on short covering. The bears still have the near term technical advantage.

December gold futures closed down $11.80 an ounce at $1,324.40. Prices closed nearer the session low today. A firmer U.S. dollar index today helped to pressure gold. A four week old downtrend is in place on the daily bar chart. The gold market bears have the overall near term technical advantage.

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COT Market Summary for Tuesday Sept. 24th - Crude Oil, Natural Gas, SP 500, Gold and Coffee

November crude oil closed lower on Tuesday extending this month's decline. A short covering rebound tempered early session losses and the high range close sets the stage for a steady to higher opening when Wednesday's night session begins. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term. If November extends the decline off August's high, the 38% retracement level of the April-August rally crossing at 102.43 is the next downside target. Multiple closes above the 20 day moving average crossing at 106.86 are needed to confirm that a low has been posted. First resistance is the 20 day moving average crossing at 106.86. Second resistance is the reaction high crossing at 110.70. First support is the 38% retracement level of the April-August rally crossing at 102.43. Second support is the 50% retracement level of the April-August rally crossing at 98.71.

October Henry natural gas closed sharply lower on Tuesday as it extends the decline off this month's high. 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 October extends this week's decline, the reaction low crossing at 3.418 is the next downside target. Closes above the 10 day moving average crossing at 3.659 would confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 3.659. Second resistance is the 50% retracement level of the May-August decline crossing at 3.841. First support is the reaction low crossing at 3.418. Second support is April's low crossing at 3.154.

The December S&P 500 closed higher on Tuesday. Today's rally ended a three day decline following comments by President Obama that eased concerns over Middle East tensions. The high range close sets the stage for a steady to higher opening when Wednesday's night session begins trading. Stochastics and the RSI have turned bearish signaling that a short term top might be in or is near. Closes below the 20 day moving average crossing at 1668.47 would confirm that a short term top has been posted. If December renews the rally off August's low into uncharted territory, upside targets will be hard to project. First resistance is last Thursday's high crossing at 1726.50. Second resistance is unknown now that December is trading into uncharted territory. First support is gap support crossing at 1702.80. Second support is the 20-day moving average crossing at 1668.47.

October gold closed lower on Tuesday and the mid range close sets the stage for a steady opening when Wednesday's night session begins trading. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near term. Closes above the 20 day moving average crossing at 1362.30 are needed to confirm that a short term low has been posted. If October renews the decline off August's high, August's low crossing at 1272.10 is the next downside target. First resistance is the 20 day moving average crossing at 1362.30. Second resistance is August's high crossing at 1432.90. First support is last Wednesday's low crossing at 1281.80. Second resistance is August's low crossing at 1272.10.

And we haven't given up yet....December coffee closed higher due to short covering on Tuesday. The high range close set the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are turning bullish signaling that sideways to higher prices are possible near term. Closes above the reaction high crossing at 12.10 would confirm that a low has been posted. If December extends this summer's decline, monthly support crossing at 10.21 is the next downside target.

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National Oilwell Varco Announces Plan to Pursue Spin-Off of Distribution Business into Separate Publicly Traded Company

National Oilwell Varco (NYSE: NOV) announced today that its Board of Directors has authorized Company management to move forward with exploration of a plan to spin off NOV’s distribution business from the remainder of the Company, creating two stand-alone, publicly traded corporations. The Company believes that the separation of the distribution business can be accomplished via a tax-efficient spin off to NOV shareholders.

Pete Miller, Chairman and CEO of National Oilwell Varco, remarked, “Through the hard work and dedicated efforts of its employees, and with last year’s acquisitions of Wilson Supply and C.E. Franklin, we believe the Company’s distribution business now has the market size and scale to operate as a standalone, world class, distribution company. As a separate company, the distribution group would have over 415 locations and operations in 26 countries, representing approximately 85% of the revenue of NOV’s Distribution and Transmission Segment for the six months ending June 30, 2013. This distribution company will be a leading, pure play, provider of maintenance, repair and operating supplies to the global energy and industrial markets, and poised for continued profitable growth.

We believe that the contemplated spin-off is very consistent with NOV’s strategy and commitment to continue to grow the Company and create significant shareholder value. This is the right business move for both companies. As separate companies, the distribution business and the remainder of NOV will each be better positioned and have the enhanced operational flexibility to focus on their specific products, services and customers.”

The spin-off is expected to be completed in the first half of 2014 and is subject to market conditions, customary regulatory approvals, the execution of separation and intercompany agreements and final board approval. The separation of the distribution business from the rest of NOV does not require shareholder approval.

Credit Suisse Securities (USA) LLC is serving as the financial advisor to the Company and Locke Lord LLP is serving as its legal advisor.

National Oilwell Varco is a worldwide leader in the design, manufacture and sale of equipment and components used in oil and gas drilling and production operations, the provision of oilfield services, and supply chain integration services to the upstream oil and gas industry.

Statements made in this press release that are forward looking in nature are intended to be "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934 and may involve risks and uncertainties. These statements may differ materially from actual future events or results. Readers are referred to documents filed by National Oilwell Varco with the Securities and Exchange Commission, including the Annual Report on Form 10-K, which identify significant risk factors which could cause actual results to differ from those contained in the forward-looking statements.

Source: National Oilwell Varco, Inc.

National Oilwell Varco, Inc.
Jeremy Thigpen, (713) 346-7301

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  *   Historical Equity Curve: 2007-2013

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COT Market Summary for Monday Sept. 23rd

October crude oil closed lower on Monday extending this month's decline. October decline as the United Nations Security Council worked toward a resolution based on the Geneva accord between the U.S. and Russia. The Syria premium has basically been taken out of the market. The low range close sets the stage for a steady to lower opening when Tuesday's night session begins. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near term. If October extends the decline off August's high, the 38% retracement level of the April-August rally crossing at 102.43 is the next downside target. Multiple closes above the 20 day moving average crossing at 105.56 are needed to confirm that a low has been posted. First resistance is the reaction high crossing at 110.70. Second resistance is August's high crossing at 112.24. First support is the reaction low crossing at 104.21. Second support is the 38% retracement level of the April-August rally crossing at 102.43.

October Henry natural gas closed lower on Monday and below the 20 day moving average crossing at 3.631 confirming that a short term top has been posted while opening the door for additional weakness near term. The low range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI have turned bearish signaling that sideways to lower prices are possible near term. If October extends today's decline, the reaction low crossing at 3.517 is the next downside target. If October renews the rally off August's low, the 50% retracement level of the May-August decline crossing at 3.842 is the next upside target. First resistance is the 50% retracement level of the May-August decline crossing at 3.841. Second resistance is the 62% retracement level of the May-August decline crossing at 4.003. First support is the reaction low crossing at 3.517. Second support is the reaction low crossing at 3.418.

The December S&P 500 closed lower for the third day in a row on Monday. The December Standard & Poor's 500 Index posted its largest setback in a month as financial shares slumped while investors watched speeches from Federal Reserve officials for clues on monetary policies. The low range close sets the stage for a steady to lower opening when Tuesday's night session begins trading. Stochastics and the RSI are overbought and are turning neutral to bearish signaling that a short term top might be in or is near. Closes below the 20 day moving average crossing at 1666.23 would confirm that a short term top has been posted. If December renews the rally off August's low into uncharted territory, upside targets will be hard to project. First resistance is last Thursday's high crossing at 1726.50. Second resistance is unknown now that December is trading into uncharted territory. First support is the 10 day moving average crossing at 1694.10. Second support is the 20 day moving average crossing at 1666.23.

October gold closed lower on Monday as the U.S. economy continues to improve. The Federal Reserve's surprise decision to hold stimulus for now will help prices only in the short term. However, gold could drop below $1,250 an ounce before the end of the year as economic data strengthens and investors expect the Fed to start reducing its asset purchases. Today's high range close sets the stage for a steady to higher opening when Tuesday's night session begins trading. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. Closes above the 20 day moving average crossing at 1365.80 are needed to confirm that a short term low has been posted. If October renews the decline off August's high, August's low crossing at 1272.10 is the next downside target. First resistance is the 20 day moving average crossing at 1365.80. Second resistance is August's high crossing at 1432.90. First support is last Wednesday's low crossing at 1281.80. Second resistance is August's low crossing at 1272.10.

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Thoughts from the Frontline: Rich City, Poor City

By John Mauldin

"The future is already here," intoned William Gibson, one of my favorite cyberpunk science fiction authors, "it's just not very evenly distributed." Paraphrasing Gibson, the pension crisis is already here; it's just not very evenly distributed. For the past two weeks we've been exploring the problems of state pension funds. This week we will conclude our look at pension plans for the nonce with a 30,000-foot overview of the states and then take a deeper dive into one city: mine. This will give you at least one version of how to do your own homework about your own hometown. But fair warning, depending on your locale, you may need medical help or significant quantities of an adult beverage after you finish your research. Then again you may be pleasantly surprised and congratulate yourself on choosing a particularly adept hometown. And be on notice that, no matter what your personal conclusion and how well-grounded your analysis is, there will be people who live in your neighborhood who think you are utterly full of, well, let's just say "nonsensical matter" and leave it at that. This is a family letter.

Into the Transformational Future

First, a quick announcement. I am constantly asked where the future jobs will be, and I think hard about the answer to that very personal question (it's crucial to those of us who have young kids). Will we see Gibson’s dystopian world or Ian Banks' world of abundance? The answer is, of course, that secular growth in employment will come from the new, transformational technologies that are already being created all around us, truly new industries that will change everything and create opportunities for work that we can't even imagine yet, in the same way the automobile or telecommunications or the McCormick reaper both took some jobs away and created even greater opportunities. The transition is the thing, though. It will be filled with opportunities for some and forced change for others, while we wait for the future to become more evenly distributed. In the next few weeks, you are going to get a letter from me that will tell you about the newest addition to Mauldin Economics, the Transformational Technologies Alert, written by my longtime friend Pat Cox, who is no stranger to readers of this letter. Pat and I have long wanted to work together, exploring the future and especially biotech. He is the best, and you will want to join us from the very beginning. We invite you to charge ahead into the future with us, exploring opportunities that will begin to change your own life right now. And now back to pensions…

Through the courtesy of one of your fellow readers I've been given a treasure trove of data on 702 city pension plans. I won't say that I got lost in the data, but the search and rescue teams sent to find me had to go back for extra supplies. There were some very dark alleys that it took a while to find my way back out of. Not to mention some twists and turns that were totally surprising.

So first I need to say a big thank you to Gregg L. Bienstock and Justin Coombs of Lumesis for giving me access to their data. Gregg is a cofounder of Lumesis, and their signature software is called (appropriately enough, given the oceans of data they plumb) DIVER. They've compiled data on 54,000 issuers of municipal and state bonds from over 100 sources. They sent me an Excel file on the major pension plans of every state and the pension plans of cities with populations over 100,000. And Justin was kind enough to create multiple spreadsheets and graphs upon request and patiently explain their data. The bulk of the data in this letter is from http://www.lumesis.com. The opinions are my own and should not be attributed to Lumesis. From time to time we will also look at another fascinating study from the Pew Charitable Trusts on pensions and retiree healthcare in 61 cities.

As we have seen the last two weeks (here and here), the assumptions that states make about their future investment returns are fairly unrealistic and generally nothing like what they've achieved for the last 10 years. This makes their balance sheets look far better than they really are, and for some states the discrepancy is pretty stark. Witness Illinois, where unfunded pension liabilities run north of $280 billion, give or take. That is more than $20,000 for every man, woman, and child in the state. And the bill keeps rising every month as the state plows ever deeper in debt to its own future.

Keeping in mind the caveat that the percentages may actually be worse than reported, let's look at a few graphs on a state-by-state basis. This first graph shows the funded ratio of state pension plans through 2012. (Note: on all the graphs the large "island" below Louisiana is a representation of Puerto Rico. To its left is Alaska, and both are obviously not to scale.)




The next graph shows actuarial required contributions (ARC). The ARC is simply the amount of money required to fund the pension plan given the return assumptions of the plan. The important thing to note here is the amount of blue in the graph. If you ask your local politicians how their pension plan is doing, they can probably tell you with a straight face (and because they don't know any better) that their state's pension is fully funded. I note with some alarm that "conservative" Texas doesn't fare very well. While Texas claims funding above 80%, a more reasonable assumption on returns suggests it is no better than 43%. Can Rick Perry run for president as a conservative on that number? Then again, can New Jersey Republican governor uber-star Chris Christie run on his state's funding level of 33%? Just asking.




To continue reading this article from Thoughts from the Frontline – a free weekly publication by John Mauldin, renowned financial expert, best-selling author, and Chairman of Mauldin Economics – Please Click Here.

© 2013 Mauldin Economics. All Rights Reserved.

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Excellent Crop Conditions Give Coffee Bulls Little Hope

Is it our love for the "black stuff" that has us drawn to this coffee market? We continue to have hope of a bottom in this trade and so far....no such luck.

Our trading partner Mike Seery has some thoughts for us this week....

The coffee market continues to go absolutely nowhere but slightly lower on the weekly charts as prices hit a new 4 year low trading below their 20 and 100 day moving average with extremely low volatility closing this Friday in the March contract at 117.75 and I had been recommending to be buying coffee last week with a very tight stop and that trade did not work, however it was a relatively small loss. Volatility in coffee in my opinion is almost at all time lows as prices really are very quiet for such a volatile commodity.

The problem in coffee is the fact that global supplies are huge with excellent crop conditions around the world with the possibility of prices getting down to the 100 – 110 level and I do think if you’re lucky enough to get those prices & you’re a long term investor I would be buying at major yearly support. When prices hit this low people stop growing and that’s what causes higher prices and when higher prices come in farmers grow more and that’s what causes lower prices but sometimes it pays to be patient. Trend lower, chart structure excellent.

Click here to get the rest of Mike's commodity calls this week.

 

The Next Bakken?

Just a few days ago, a hastily assembled team including Chief Energy Investment Strategist Marin Katusa and Casey Research Managing Director David Galland were preparing to fly to a secret location. A location where a small oil company is about to drill the first oil well into what appears to be a massive new oil bonanza.

But at the last minute, the oil company's lawyers canceled the trip and imposed a total communication blackout. They did so out of concern that regulators would think having the Casey Research team on site gave Casey Energy Report subscribers an unfair advantage.

While disappointed that the site visit was canceled, the Casey energy team has already extensively researched the company and are now free to tell their subscribers about it.

And that's why I'm writing to you today: the Casey energy analysts believe this company may have as much or even more potential than those companies that made billions in the now legendary Bakken formation.

To put that assertion into perspective, let me tell you a little bit about the Bakken. In case you're unfamiliar with it, it's a monster oil and gas deposit covering almost 15,000 square miles across North Dakota, Montana, and Alberta, Canada.

The latest US Geological Survey estimates that the Bakken contains upwards of 7.4 billion barrels of recoverable oil - and that is considered on the low end of the range. An executive of a company deeply involved in the Bakken recently estimated that the basin will ultimately yield 20 billion barrels.

And those who discovered the Bakken's tremendous potential ahead of the crowd are now very well off indeed....When It Rains, It Pours... Cash

Until 2005, the Bakken had been largely written off as uneconomic. Then leapfrogging advances in horizontal drilling technologies changed everything, triggering a land rush that made multimillionaires out of landowners and explorers.

Take Harold Hamm, for example. The founder and CEO of Continental Resources (CRL), Hamm, as Forbes magazine puts it, "is responsible for cracking the code of the Bakken."

In 2007, the same year that Continental was listed on the NYSE, the company was the first to complete lateral, multi-stage drilling over 1,280 acres in North Dakota.

One year later, Hamm was the first to demonstrate that the Three Forks formation, which was initially believed to be part of the Bakken, was a separate reservoir and might hold more oil than the Bakken itself.

The rest, as they say, is history. Hamm is now worth $11.3 billion, which makes him the 90th richest person on the planet.

But it's not just the wildcatters themselves that rake in the big money: Early bird investors in Continental Resources made gains of up to 459% within 14 months after the company's NYSE listing. And those who held on were looking at gains of 549% when CRL's stock peaked in February 2012.

In other words, had you trusted in Hamm's genius when he started out drilling in the Bakken, an investment of just $10,000 would have turned into $64,900 for you.

There's no question about it: The use of new technologies to unlock the Bakken, the Eagle Ford Shale, and other huge oil deposits previously considered uneconomic has been a game changer for North American energy supplies.

And you could be the beneficiary of the next Bakken-type windfall....The Next Bakken - But Even Better?

As I said before, the Casey energy analysts believe that the small company they've uncovered could be the next Continental Resources, sitting on unimaginable riches.

Over the last year this little company has quietly assembled a 2-million-acre concession in a region whose geological conditions for the production of oil and gas are actually far more promising than those in the Bakken.

And about one week from now, these resources could finally be proven to be in place. You can imagine what that could do to the company's share price.

The company's top executives appear to have a similar vision: Many of them have personally invested millions of dollars to fund the company and its current drill program.

In July, one director of the company, who is also the CEO of a major Canadian oil player, bought 200,000 shares at the market – bringing his holdings of the company's stock to a total of 1,235,237 shares.

I think his optimism is well placed, considering that the company's management includes seasoned Bakken veterans who not only recognize the potential of the "new Bakken," but also have the skills to get the oil out of the ground.

If the initial well now being drilled meets management's expectations, this small-cap company will be on the fast track for explosive shareholder returns, potentially for years on end. Be There When the Truth Is Unveiled - for a Chance at Staggering Returns

Best of all, so far only a handful of research firms have been paying attention to this virtually unknown company. Therefore, we are uniquely positioned to take advantage of the news released once the well data have been compiled.

In fact, within minutes of the company breaking the silence imposed by its lawyers, Casey’s analysts will be standing by to share their on the spot analysis with subscribers to the Casey Energy Report....even if it's the middle of the night.

To be fair, though, I have to remind you that this is a speculation, not a slam dunk investment. Drilling is always a risky business, so we have to keep our enthusiasm in check until the first well is completed and the initial flow data are logged.

If, however, the initial well test confirms that the company is sitting on the "next Bakken," the investment returns from its 2 million acre concession should be nothing less than spectacular. And the odds for that happening are excellent. Be Ready: Initial Drilling Results Are Expected on or Around Monday, September 16

Until the company has completed its flow tests and made a public announcement, Casey can't share any details about the company, or even the country where the next potential Bakken is located.

But once the company issues its own press release, everyone who is an active subscriber to the Casey Energy Report will receive our alert with an up-to-the-minute analysis and specific recommendation on how to invest.

In addition, to ensure that Energy Report readers get the full picture of this exciting new play, the Casey Energy team is now preparing a comprehensive report about the "next Bakken" and the small-cap company already supremely positioned to profit from it.

While no one can say exactly when the drill will reach the pay zone and the subsequent well flow test will be completed, the last estimate provided by the company before the lawyers instituted the communications blackout was mid September.

Based on Casey’s own analysis of the processes involved, they anticipate the company will be ready to release news on or about Monday, September 16. Of course, due to the nature of any drill program, this is only an estimate.

Regardless, once the testing is completed and the company issues its public press release, Casey Energy Report subscribers will immediately receive an Alert with our analysis - and their special report on the next Bakken.

Of course, it would be massively unfair (and poor business ethics) to release this information to non paying subscribers.

Not to worry, though. If you subscribe today, you can still participate in the earliest phase of what could become a flood of investment into the "next Bakken." Make a Bundle or Pay Nothing for Your Subscription

How much does it cost to get in on what could be the next Bakken? Thousands of subscribers to the Casey Energy Report pay $248 per quarter, an amount that may seem high to some.

However, that they were prepared to send an executive team to the secret well site - involving international flights and almost 11 hours in a car - should make it clear just how much potential we believe this investment has for our subscribers. If they're right, the potential returns will make the cost of your subscription pale by comparison.

But what if they're wrong, and the first well is a bust? What then?

It's simple: thanks to Casey’s 3-month, no-questions-asked, 100% money-back guarantee, if you don't make a bundle off this exciting new play within the first three months of your subscription, simply drop them an email and they'll promptly return every penny you paid.

It's a completely straightforward proposition that works entirely in your favor.

Of course, they're pretty confident you won't cancel your subscription.

Because they believe that they are about to make a lot of money on this stock, and that it will continue to provide exceptional returns for years (or until it is taken over by a larger company hungry for the 2-million-acre concession it has assembled on the next Bakken – and if that happens, it'll be just as good for us).

In a May 2010 interview broadcast on Business News Network, Chief Investment Strategist Marin Katusa spoke about Africa Oil, another early Casey energy pick. In that interview, he said, "This stock has a realistic potential to give you 10 to 15, even 20, times your money."

He was right: Africa Oil handed early investors a profit of over 1,200%.

In a recent email, Marin wrote, "Since that interview on Africa Oil, I have never made a similar forecast about a company, but I have no reservations saying that this new company easily has as much or more potential."

You do not want to miss out on this opportunity.

Getting in on the ground floor is as simple and easy as clicking here to sign up for the Casey Energy Report now.

Remember, Casey’s ironclad 100% money back guarantee means you've got nothing to lose to give the Casey Energy Report a try. With the drill turning and their energy team hard at work preparing its comprehensive report on the "next Bakken," now is definitely the time to act.

Sincerely,

Ray @ The Crude Oil Trader

P.S. It's important to highlight that members of the Casey Research team own shares in investment funds that have invested capital in this firm back from the time it was just an idea. That the company appears to have made good use of its capital to build its position on this potentially huge new oil play is all to the good and the only reason we are bringing this stock to the attention of our readers. To avoid a conflict of interest, Casey’s corporate policies (correctly) require them to provide advance notice to subscribers before they sell, which we don't see happening until the company has unlocked its full potential and its shares are trading at many multiples of where they are now.

If you, too, want to join in on this early stage play, be sure to sign up today - or at the latest before Monday, September 16. And don't forget: you either make a bundle or you simply cancel within 3 months for your money back. Even after three months, you can still cancel anytime and receive a prorated refund.

Don't miss this rare opportunity to get in on the ground floor.

Here again is the secure link to join Casey Energy Report.

Getting Shocked by Utility Stocks

By Dennis Miller

Retirees' portfolios need to be defensive, meaning they minimize risk but still have the potential for growth and income. Historically, this meant including a few widow-and-orphan stocks in your retirement portfolio....public utilities with nice dividends.


Utilities experience little volatility, their dividends are solid, and the demand for their product is constant, regardless of how well the economy is doing. Government regulation also gives them a leg up, since utilities face little competition. They set their rates, consumers pay up with little fuss because they have few alternatives, and the utilities turn a profit.

So, we at Miller's Money Forever wondered, is it time to add one or two utilities to our own portfolio? As I talked through the idea with our chief analyst, I could hear him clicking away on his keyboard in the background. A little research on a couple of utilities quickly put things in perspective. Had we bought in to Exelon (EXC) in early May at the wrong time, we almost would have been stopped out by a 20% trailing stop, since the stock fell as far as 19%. We were both shocked.

But that's only one utility. What about the sector as a whole? With a few more clicks, we learned that the Utilities Select Sector SPDR (XLU), a $5.4-billion exchange-traded fund of utilities, had fallen as far as 11% since the beginning of May. That's an enormous move in such a short period of time for what many consider a staple sector for retirement portfolios.

Wait a minute here! Utility stocks are supposed be the ultimate safe investment. They didn't earn the nickname "widow and orphan stocks" for being volatile, so what the heck happened?

History Does Not Guarantee Future Performance

 

We ran an in-depth analysis and came up with a bit of a history lesson for me to pass along. Let's start with where defensive stocks stood prior to the rapid rate increase in Treasuries. With yields near record lows, investors piled in to dividend stocks in search of income. But they didn't pick just any type of stock—they specifically chose defensive stocks with a beta of less than one. For a quick review, a beta of one means a 10% move in the stock market should theoretically move the stock 10%. A beta of 0.5 means a 10% move in the market should move the stock only 5%.

In addition to retail investors, more sophisticated analysts suggested moving in to these stocks as well. One of the most common Wall Street valuation models examines three primary factors: dividends, beta, and the US Treasury rate. When the beta and Treasury rates are low and the dividend is high, a stock is shown to be more valuable. Based on this model, a stock's value is more dependent on Treasury rates and the dividend than what often drives value: cash flows and growth.

In a nutshell, because there are no safe, decent interest-bearing investments available, many billions of dollars went into utility stocks. In some sense, utilities began to act like bonds. And when interest rates rise, bond prices fall. As a result, what was once considered the definitive stable investment is now interest-rate sensitive, just like long term bonds.

In order to get a better visual of what's been happening, we tracked XLU's performance since May 1—a period of rapidly rising rates—and compared it to a theoretical beta-based utility performance as well as the S&P 500. With a beta of 0.63, XLU should move 6.3% whenever the market moves 10%. In many situations beta works well, but unfortunately, it doesn't capture every risk, including interest-rate risk.

The blue line traces the return on the S&P 500. The green line depicts how XLU theoretically should have moved based on its beta. The red line shows how it actually performed. Note the enormous difference, bottoming out as far as 11.2% down.

Although beta is typically used as a back-of-the-envelope measure of risk, it's not doing a particularly good job for utilities in a rising-rate environment. And while the S&P 500 has recovered from June's turbulence, utilities are still down for this period.

After I saw the data, I asked what we should expect in the future. While I suppose it makes little difference if a retiree is holding utility stocks for the dividends, utilities will likely lose value as interest rates rise. That could be a bit unnerving.

This could be a real problem for retirees, as it's common practice for investment advisors at major brokerage firms to put their more conservative investors in utilities. A seasoned veteran once told me that no broker ever got sued for putting clients' money into utilities. I wonder how many brokers and investment advisors have noticed the shift happening in utilities with higher rates.

In light of rising interest rates, we have refined our criteria for selecting solid and safe investments for the Money Forever portfolio. Unfortunately, not everyone was has caught on. Take a look at your portfolio to see whether you need to trim down your utilities exposure. Should the market crash, I'd rather be holding a utility than General Motors, but at the same time, if interest rates keep going up utilities will feel the pain.
I discussed this issue—as well as others facing retirees—in a very recent and timely online event called America's Broken Promise: Strategies for a Retirement Worth Living. This free event’s all-star cast explains the unique challenges retirees face today—challenges far different from what we were raised to expect.

The presentation is hosted by my colleague, David Galland of Casey Research, and features John Stossel, formerly on ABC's 20/20 and now with Fox Business Network, David Walker, former Comptroller General of the United States, Jeff White, President of American Financial Group, and me of course.

This is the one event you must see to ensure you retire on your own terms. Use this link to find out more and to sign-up.

COT Market Summary for Tuesday Sept. 17th - Crude Oil, Natural Gas, SP 500 and Gold

October crude oil closed lower on Tuesday. The low range close sets the stage for a steady to lower opening when Wednesday's night session begins. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term. Today's closes below last Tuesday's low crossing at 106.39 confirms that a short term top has been posted while opening the door for additional weakness near term. Closes above the 10 day moving average crossing at 107.93 would temper the near term bearish outlook. First resistance is the 10 day moving average crossing at 107.93. Second resistance is the reaction high crossing at 110.70. First support is the reaction low crossing at 104.21. Second support is the 38% retracement level of the April-August rally crossing at 102.43.

October Henry natural gas closed slightly lower due to light profit taking on Tuesday. The low range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI are diverging but remain bullish signaling that sideways to higher prices are possible near term. If October extends the rally off August's low, the 50% retracement level of the May-August decline crossing at 3.842 is the next upside target. Closes below the 20 day moving average crossing at 3.598 would confirm that a short term top has been posted while opening the door for additional weakness near term. First resistance is the 50% retracement level of the May-August decline crossing at 3.841. Second resistance is the 62% retracement level of the May-August decline crossing at 4.003. First support is the 20 day moving average crossing at 3.598. Second support is the reaction low crossing at 3.483.

The December S&P 500 closed higher on Tuesday and the high range close sets the stage for a steady to higher opening when Wednesday's night session begins trading. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term. If December extends the rally off August's low, weekly resistance crossing at 1705.00 is the next upside target. Closes below the 20 day moving average crossing at 1653.39 would confirm that a short term top has been posted. First resistance is Monday's high crossing at 1702.80. Second resistance is weekly resistance crossing at 1705.00. First support is the 10 day moving average crossing at 1670.96. Second support is the 20 day moving average crossing at 1653.39.

October gold closed lower on Tuesday and the low range close sets the stage for a steady to lower opening when Wednesday's night session begins trading. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term. If October extends this month's decline, August's low crossing at 1272.10 is the next downside target. Closes above the 20 day moving average crossing at 1374.40 would temper the near term bearish outlook. First resistance is the 20 day moving average crossing at 1374.40. Second resistance is August's high crossing at 1432.90. First support is Monday's low crossing at 1302.90. Second resistance is August's low crossing at 1272.10.

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Watch "The 30-Minute E-Mini Breakout Strategy"

100% fully disclosed. Nothing held back. Watch Todd trade using this strategy LIVE. Don't worry, there are no sneaky tricks, risky gimmicks, expensive software, or fancy indicators. After watching Todd's demostration please feel free to leave us a comment and let our readers know what you think about Todd's trading strategy.

See you in the markets tomorrow as you put this to work in your own trading.

Ray @ The Crude Oil Trader


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