Tag: Brent crude

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Dollar breakout causes gold tremors

The Dollar Index broke through resistance at 80.00, signaling a primary advance to 85.00. Rising 63-day Twiggs Momentum indicates a strong up-trend.

Dollar Index

* Target calculation: 80 + ( 80 – 75 ) = 85

The stronger dollar caused spot gold to weaken, testing the band of support between $1550 and $1600/ounce.

Spot Gold

Gold is also testing the lower trend channel on the weekly chart. Cross of 63-day Twiggs Momentum below zero warns of a trend reversal. Failure of support at $1550 would confirm a primary down-trend.

Spot Gold Weekly

* Target calculation: 1600 – ( 1800 – 1600 ) = 1400

CRB Commodities Index is similarly testing support at 292. Breakout would offer a target of 265*.

CRB Commodities Index

* Target calculation: 295 – ( 325 – 295 ) = 265

Brent Crude is testing medium-term support at $105/barrel. Failure would indicate a test of the lower trend channel.

ICE Brent Afternoon Markers

Some readers questioned why gold and stocks are falling simultaneously — one normally rises when the other falls. A possible explanation is that expectation of quantitative easing, both from the Fed and ECB, has been supporting both markets. As prospects of QE recede, inflation forecasts will be lowered and demand for inflation-hedge assets (stocks and commodities) will fade. We should see a corresponding rise in bond prices (and falling yields) as a result.

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Safe haven demand for dollar and gold eases

The Dollar Index is testing support at 78.00. Narrow consolidation above the support level indicates weakness. Recovery above 79.00 would relieve this, while failure of support would warn of another test of primary support at 75.00.  Rising 63-day Twiggs Momentum, well above zero, however, suggests continuation of the up-trend.

Dollar Index

* Target calculation: 80 + ( 80 – 75 ) = 85

Spot gold is also weak as safe haven demand for both the yellow metal and the dollar has eased. Reversal below $1670 would signal another test of primary support at $1600. Declining 63-day Twiggs Momentum suggests further weakness but the long-term outlook remains bullish with the indicator comfortably above the zero line.

Spot Gold

* Target calculation: 1800 + ( 1800 – 1700 ) = 1900

Increased tensions with Iran are supporting the price of Brent Crude above $105/barrel. Narrow oscillation of 63-day Twiggs Momentum around the zero line indicates uncertainty. Failure of support (and respect of the descending trendline) would indicate another primary decline with a target of $85*. Breach of primary support at $99 would confirm.

ICE Brent Crude Afternoon Markers

* Target calculation: 100 – ( 115 – 100 ) = 85

The CRB Commodities Index respected its descending trendline, suggesting a primary decline to $265*. Follow-through below short-term support at $305 would strengthen the signal, while breach of primary support at $295 would confirm. The Aussie Dollar and Canada’s Loonie both closely follow commodity prices and can be expected to follow the CRB index lower.

CRB Commodities Index

* Target calculation: 295 – ( 325 – 295 ) = 265

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Crude oil

Brent Crude again found support at $105/barrel. Breakout above the trend channel and resistance at $115 would signal the end of the bear-trend and another test of $125. Recovery of 63-day Twiggs Momentum above zero would likewise suggest a primary advance. Failure would re-test primary support at $99.

ICE Brent Afternoon Markers

* Target calculation: 115 + ( 115 – 105 ) = 125

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Commodities and Crude Oil

Brent Crude is testing medium-term support at $105/barrel. Failure is likely if the dollar continues to strengthen and would mean a test of the $99/$100 primary level. Reversal of 63-day Twiggs Momentum below -5% would complete an iceberg pattern, indicating a solid primary down-trend. Breach of primary support would offer a target of $85/barrel*.

Brent Crude Afternoon Markers

* Target calculation: 100 – ( 115 – 100 ) = 85

Roughly only 10% of an iceberg is visible at sea, with most of the ice-mass hidden below the water-line. Similarly, an “iceberg” pattern on a chart describes a situation where +/- 90% of Twiggs Momentum (or a similar indicator) is below zero with only a small peak protruding above. 

CRB Commodities Index is similarly headed for a test of primary support, at 295. 63-Day Twiggs Momentum deep below zero indicates a strong primary down-trend. Failure of support would offer a target of 265*.

CRB Commodities Index

* Target calculation: 295 – ( 325 – 295 ) = 265

That would have a negative impact on the Aussie Dollar and Canadian Loonie which closely track commodity prices.

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Here’s The Real Reason The Price Of Crude Oil Is So Strong

This month’s decoupling of oil from other risk assets, could be foretelling skittishness over recent events in Iran and Syria (where a growing chorus is calling for action against Assad’s brutality), and even over today’s report from the AFP that thousands of Kuwaitis stormed parliament after demanding the prime minister’s resignation.

Additionally, borderline hostile rhetoric towards Iran after a recent explosion at a missile base is putting more focus on their tensions with Israel…..

via Here’s The Real Reason The Price Of Crude Oil Is So Strong.

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Commodities and crude

The CRB Commodities Index remains in a primary down-trend. Respect of the descending trendline, with reversal below 315, would warn of another decline. Breakout above the descending trendline is less likely, but would indicate that the down-trend is weakening. 63-Day Twiggs Momentum penetrated its descending trendline but remains below zero, suggesting that the down-trend has slowed but not reversed.

CRB Commodities Index

* Target calculation: 295 – ( 325 – 295 ) = 265

Copper rallied to test its descending trendline at $8000/tonne. 63-Day Twiggs Momentum deep below zero indicates a strong primary down-trend. Breakout above $8000 would indicate that the down-trend is weakening, while respect of the descending trendline would warn of a decline to 6000*.

Copper Grade A

* Target calculation: 7000 – ( 8000 – 7000 ) = 6000

Brent Crude broke out above its trend channel, indicating that it is forming a base above $100/barrel. 63-Day Twiggs Momentum recovered above zero to confirm the breakout. Expect retracement to test primary support at $100, but respect is now likely and would suggest a primary up-trend.

Brent Crude Afternoon Markers

* Target calculation: 5600 – ( 6600 – 5600 ) = 5100

Nymex WTI crude is rising sharply, closing the divergence from Brent crude. News of the Seaway pipeline reversal that will relieve congestion at the Cushing, Oklahoma hub sent crude futures soaring. Expect a short retracement followed by an advance to $115.

Nymex WTI Crude

Conclusion: Commodities remain in a primary down-trend caused by the strengthening dollar. Brent crude is forming a bottom, but rising crude prices are likely to dash hopes of an early economic recovery. Falling commodity prices should cause sympathetic weakening of the Australian Dollar and Canadian Loonie.

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Crude surge

Brent Crude broke through its upper trend channel despite the strengthening dollar (one would normally expect prices to fall). The down-trend is losing momentum and (Brent) crude is likely to form a base above  $100/barrel.

Brent Crude Afternoon Markers

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Commodities and crude oil

CRB Commodities Index is testing the descending trendline at 320. Breakout would suggest that the down-trend has weakened and the index is forming a bottom; respect would indicate another test of primary support at 295. Breach of the long term rising trendline would warn of another test of 2009 lows at 200.

CRB Commodities Index

Brent crude is also testing its descending trendline, at $110/barrel. Respect would signal another test of primary support at $99, while breakout would suggest that the down-trend has ended. In the long-term, breach of the rising trendline would warn of a decline to around $70/barrel.

IPE Brent Afternoon Markers

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Dollar declines, gold and commodities rise

The Dollar Index retraced to test the new support level at 76.00. Respect would confirm the primary up-trend, while failure would signal trend weakness. A trough above zero on 63-day Twiggs Momentum would strengthen the bull signal.

Dollar Index

* Target calculation: 80 + ( 80 – 76 ) = 84

Gold broke through $1700/ounce in response to dollar weakness. Expect retracement to test the new support level. Respect would signal a primary advance to 1800*. The long-term (primary) trend remains upward.

Spot Gold

* Target calculation: 1700 + ( 1700 – 1600 ) = 1800

The Amex Gold Bugs Index is testing medium-term resistance at 560. Breakout would test the upper border of broadening wedge pattern — around 650 — and support a similar advance for the spot metal.

Amex Gold Bugs Index

Brent crude is also stronger, testing its upper trend channel at $110/barrel. Respect would indicate another test of the lower channel — and the ascending long-term trendline — while breakout would signal an advance to $120*.

IPE Brent Afternoon Markers

* Target calculation: 110 + ( 110 – 100 ) = 120

The broader CRB Commodities Index is also headed for its upper trend channel. The ascending primary trendline remains intact but 63-day Twiggs Momentum respect of the zero line (from below) warns of a strong down-trend.

CRB Commodities Index

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