Crude Oil & Natural Gas Archives - Page 19 of 22

April 14, 2014

Crude and commodities rising

Nymex Light Crude is headed for a test of resistance at $105/barrel*. Recovery of 13-week Momentum above zero indicates a primary up-trend. Breakout above $105 would confirm, offering a target of $112*. Brent crude, however, continues to range between $104 and $112/barrel.

Brent Crude and Nymex Crude

* Target calculation: 105 + ( 105 – 98 ) = 112

The Dow Jones-UBS Commodity Index respected its new support level at 134, confirming a primary up-trend. The signal reinforces earlier recovery of 13-week Twiggs Momentum above zero. Target for the advance is 143. Reversal below 134 is now unlikely, but would warn of a bull trap.

Dow Jones UBS Commodities Index

* Target calculation: 134 + ( 134 – 125 ) = 143

March 26, 2014

Depleting Putin’s war chest

From Quartz:

The “First Law of Petropolitics,” coined by New York Times columnist Tom Friedman… states that when oil prices are high, the leaders of petro-states can become demanding and belligerent; when they are low, they are more prone to be pussycats.

Oil prices at elevated levels explain Russian belligerence. The graph below shows Brent Crude prices adjusted by the (US) consumer price index to reflect growth in real crude prices over the last decade. To bring crude prices down to pre-2005 levels will be no small feat.

Real Crude Oil Prices

February 20, 2014

Crude and commodities signal recovery

The Dow Jones-UBS Commodity Index followed through above resistance at 128, after breaking its descending trendline, completing a double bottom reversal with a target of 134*. Breakout above 134 would confirm a primary up-trend.

Dow Jones UBS Commodities Index

* Target calculation: 128 + ( 128 – 122 ) = 134

Nymex Light Crude followed, completing a large double bottom reversal, with a target of $110/barrel*. Recovery of 13-week Momentum above zero indicates a primary up-trend. Brent crude continues to range between $106 and $112/barrel.

Brent Crude and Nymex Crude

* Target calculation: 100 + ( 100 – 90 ) = 110

Rising commodity prices suggest that the global economy is recovering, but copper (widely considered a bellwether for the global economy) has yet to follow. Bullish divergence on 13-week Twiggs Momentum favors an upward breakout. Breakout above $7500/tonne (and the descending trendline) would signal a primary up-trend.

Copper

February 11, 2014

Crude double bottom

Nymex Light Crude is testing resistance at $100/barrel. Breakout would complete a double bottom reversal, offering a target of $108/barrel*. Respect of resistance, however, would suggest another test of primary support at $92. Recovery of US stocks would lift crude prices in anticipation of increased demand. Brent crude is more directionless, affected by both UK North Sea supply concerns as well as reports of increased output from Libya.

Brent Crude and Nymex Crude

* Target calculation: 100 + ( 100 – 92 ) = 108

February 5, 2014

Crude: Nymex WTI down-trend

Nymex Light Crude is headed for another test of resistance at $100/barrel. Respect of resistance is likely, given the primary down-trend, and would suggest another test of primary support at $92/barrel. Breach of primary support would offer a target of $84/barrel*. Recovery above $100 is unlikely and another 13-week Twiggs Momentum peak below zero would strengthen the bear signal. Brent crude is headed for another test of support at $104/barrel. Breach would join Nymex crude in a primary down-trend.

Brent Crude and Nymex Crude

* Target calculation: 92 – ( 100 – 92 ) = 84

January 29, 2014

Light crude finds support

Nymex Light Crude found support at $92/barrel. Penetration of the descending trendline would suggest trend weakness, while respect would signal another test of primary support at $92/barrel. Breach of primary support would offer a target of $84/barrel*. Recovery above $100 is unlikely and another 13-week Twiggs Momentum peak below zero would indicate a strong down-trend. Brent crude continues to drift sideways, reflecting global supply constraints; breach of $104 would warn of a down-trend.

Brent Crude and Nymex Crude

* Target calculation: 92 – ( 100 – 92 ) = 84

January 22, 2014

Crude and commodities still bearish

Nymex crude continues its downward trend. Respect of the descending trendline would warn of further weakness, while breach of support at $92 would indicate a decline to $84/barrel*. Recovery above $100 is unlikely, with 13-week Twiggs Momentum declining below zero. Brent crude continues its consolidation above $105, reflecting global supply constraints. Breach of $105 would warn of a down-trend.

Brent Crude and Nymex Crude

* Target calculation: 92 – ( 100 – 92 ) = 84

Commodities also continue their primary down-trend, encouraged by a falling Shanghai Composite Index. Bullish divergence on Dow Jones-UBS Commodity Index 13-week Twiggs Momentum, however, warns that a bottom is forming. Breach of the descending trendline would strengthen the signal — as would recovery of Momentum above zero. Breakout above 128 would signal a primary up-trend: a bullish sign for resources stocks.

Dow Jones UBS Commodities Index

January 13, 2014

Gold hesitates in downward trend

The Gold Bugs Index, often a leading indicator of spot prices, is retracing to test the new resistance level at 210. Respect would confirm a decline to the 2008 low at 150. Recovery above 280 — and 13-week Twiggs Momentum crossover to above zero — would signal reversal to a primary up-trend, but that is unlikely at present.

Gold Bugs Index

Spot gold respected long-term support at $1200/ounce and follow-through above 1250 would suggest a bottom is forming. Recovery of 13-week Twiggs Momentum above zero would indicate a primary up-trend. Failure of $1200 is more likely, however, and would warn of a decline to 1000*.

Spot Gold

* Target calculation: 1200 – ( 1400 – 1200 ) = 1000

Dollar Index

Higher interest rates and a stronger dollar would increase downward pressure on gold.

The yield on ten-year Treasury Notes encountered strong resistance at 3.00 percent. Retracement is headed for a test of support at 2.75. Breach of that level would test primary support at 2.50, but reversal below 2.50 is unlikely. Breakout above 3.00 is more likely and would offer a target of 3.50 percent*.

10-Year Treasury Yields

* Target calculation: 3.00 + ( 3.00 – 2.50 ) = 3.50

The Dollar Index has twice respected resistance at 81.50 and we can expect another test of medium-term support at 79.80, but penetration of the declining trendline indicates downward momentum is fading. Respect of 79.80 would suggest another test of 81.50. Breakout above 81.50 would signal a primary advance, with recovery of 13-week Twiggs Momentum above zero strengthening the signal.

Dollar Index

* Target calculation: 81.5 + ( 81.5 – 79 ) = 84

December 4, 2013

Gold support at $1200

Gold

The long tail on this week’s candle reflects buying support for spot gold at $1200/ounce. Recovery above $1250 would suggest another rally to $1350. But the 63-day Twiggs Momentum peak below zero warns of a down-trend. And breach of primary support at $1200 would confirm.

Spot Gold

* Target calculation: 1250 – ( 1350 – 1250 ) = 1150

Often a leading indicator of spot prices, the Gold Bugs Index, representing un-hedged gold stocks, continues in a primary down-trend after breaking support at 210. Completion of a 13-week Twiggs Momentum peak below zero would strengthen the signal.

Gold Bugs Index

Dollar Index

The yield on ten-year Treasury Notes broke through medium-term resistance 2.75, suggesting a primary advance to 3.50 percent*. Breakout above 3.00 percent would confirm. Reversal below the rising trendline is unlikely, but would warn of trend weakness and another test of 2.50. Higher yields are likely to strengthen the dollar.

10-Year Treasury Yields

* Target calculation: 3.00 + ( 3.00 – 2.50 ) = 3.50

The Dollar Index shows evidence of strong support at 80.50, consolidating in a narrow band between 80.50 and 81.00 over the last 2 weeks. Upward breakout would suggest a primary advance; confirmed if resistance at 81.50 is broken. Breach of support at 80.50 remains as likely and would warn of another test of primary support at 79.

Dollar Index

* Target calculation: 81.5 + ( 81.5 – 79 ) = 84

Higher interest rates and a stronger dollar would increase downward pressure on gold.

Crude Oil

Nymex crude penetrated its downward trendline but this first bear rally may not be the last. Expect resistance between $98 and $100/barrel. Respect remains likely and would indicate another test of support at $92. Brent crude reflects global supply constraints and is likely to find strong support at $100/barrel.

Brent Crude and Nymex Crude

Commodity Prices

A rising Shanghai Composite Index is supporting commodity prices. Recovery of the Dow Jones-UBS Commodity Index above 126 would indicate a bear trap. Breakout above 130 would suggest reversal to a primary up-trend; and cross-over of 13-week Twiggs Momentum above zero would strengthen the signal. Respect of resistance at 126 and a primary decline now appear unlikely.

Dow Jones UBS Commodities Index

November 27, 2013

Gold: $1200 next?

Spot gold consolidating in a narrow band below support at $1250/ounce suggests a test of $1200. The 63-day Twiggs Momentum peak below zero strengthens the signal. Breakout below the June low ($1200) would confirm a primary down-trend. Recovery above $1260 is unlikely, but would indicate a rally to $1350.

Spot Gold

* Target calculation: 1250 – ( 1350 – 1250 ) = 1150

Silver broke through support at $20.50/ounce and is headed for a test of primary support at $18/ounce. Completion of a 13-week Twiggs Momentum peak below zero warns of a primary down-trend. Breach of primary support would confirm.

Spot Silver

Often a leading indicator of spot prices, the Gold Bugs Index, representing un-hedged gold stocks, broke primary support at 210 to signal a primary down-trend. Completion of a 13-week Twiggs Momentum peak below zero would strengthen the signal.

Gold Bugs Index

Dollar Index

The yield on ten-year Treasury Notes retreated below 2.75. Breakout would signal a fresh primary advance, with a target of 3.50 percent* (breakout above 3.00 percent would confirm). Reversal below the rising trendline is less likely, but would warn of trend weakness and another test of 2.50. Higher yields would help strengthen the dollar.

10-Year Treasury Yields

* Target calculation: 3.00 + ( 3.00 – 2.50 ) = 3.50

The Dollar Index retraced to test the new support level at 80.50. Completion of a 13-week Twiggs Momentum peak below zero would warn of a primary down-trend. Breach of primary support at 79 would confirm. Breakout above 81.50 remains as likely, however, and would indicate an advance to 84*.

Dollar Index

* Target calculation: 81.5 + ( 81.5 – 79 ) = 84

Higher interest rates and a stronger dollar would increase downward pressure on gold.

Crude Oil

Nymex crude is undergoing a strong correction and is likely to test primary support at $85/$86 per barrel. Reversal of 13-Week Twiggs Momentum below zero warns of a primary down-trend. Brent crude is rising despite an easing of tensions with Iran. The primary reason for the divergence is supply. Iain Armstrong, oil analyst at Brewin Dolphin, earlier in the year explained that Brent is effectively a global brand — affected by global issues of supply/demand — while Nymex is a “local” brand and benefits from plentiful shale oil in the US.

Brent Crude and Nymex Crude

Commodity Prices

A resurgent Shanghai Composite Index is supporting commodity prices. Recovery of the Dow Jones-UBS Commodity Index above 126 would indicate a bear trap. A peak below zero on 13-week Twiggs Momentum, however, warns of a continuing down-trend. Respect of the resistance level, as indicated by follow-through below 122, would signal a decline to 114*.

Dow Jones UBS Commodities Index

* Target calculation: 124 – ( 134 – 124 ) = 114