Crude could correct down this coming week
Last week Dec 09 crude opened the week at $79.12 and closed the week at above $80 at $80.50. Looking at the daily chart below you will see that the Stochastics are well overbought at over 92. However you will see the %K is setting up to cross below %D. ADX at over 57 shows a very strong uptrend, but the DM+ is weakening as well as the downward position the CCI is taking. People who have been long crude may wish to tighten stops to take more off the table if this market corrects sharply.
One interesting study is the current COT shows the Commercials net short at -79,159. A better view that the CFTC announced a few weeks ago is the new COT report the takes the swap dealers out of commercial numbers and gives them their own category. Last week’s view in this new report showed the True Commercials net short -191,973 and the Swap Dealers net long 112,814. To get a report on understanding this new COT Report, email me at Gary@crbtrader.com.
Currently the CRB Winner’s Circle is long the Dec 09 Crude since 10/13 with a profit of $5,790 and Jan 10 Crude since 10/13 with a profit of $5,900. Based on this past Friday’s close. For a risk free trial to this unique service and a performance record please email me at Gary@crbtrader.com or call me at 312-506-8706.
If You Trade The E-Mini Indices Then Click Here!
Take advantage of a free trial to what floor traders, institutions, and professional traders have been using for 20-years. Plus, get you hands on the new free book CRB’s 50-Rules of Trading!
The numbers below represent the Commercial Net Traders positions taken from the weekly Commitment of Traders (COT) report released by the Commodity Futures Trading Commission each Friday. You will find a 12-month high and low with the past 2 weeks of data. To see the past 52 weeks of commercial data please visit www.pricecharts.com. Simply open Analysis under the Resource category at the top of the screen and click on the Commercial Tracker on the left side selection menu. You will find this to be a very interesting presentation of the commercial COT information.
Commercial Net Tracker instructions
This form tracks the Commitment of Traders (COT) data for the commodity futures market. This form "looks" at the most recent five weeks of COT data and provides visual indications of the data. A. If the current value is at a 12-month low, the cell will display a red/burgundy background. B. If the current value is at a 12-month high, the cell will display a green background. C. If the current value went from net negative to net positive, the cell will display a blue background (indicating a bullish condition). D. If the current value is both a 12-month high and also went from a net negative to a net positive, the background will be green. You should view the data with green backgrounds to determine if they also went from net negative to net positive.
| Commodity | 12-mo low | 12-mo hi | 23-Oct | 16-Oct |
| Cattle (feed) | -3,350 | 5,139 | 3,145 | 3,329 |
| Cattle (live) | -9,974 | 30,346 | 14,641 | 22,210 |
| Hogs | -7,399 | 35,452 | 17,814 | 21,556 |
| Corn | -113,201 | 81,644 | -26,661 | -14,274 |
| Oats | -3,360 | 2,198 | -2,461 | -1,768 |
| Soybeans | -112,075 | 16,898 | -48,147 | -34,747 |
| Soybean meal | -82,472 | -1,533 | -40,262 | -38,505 |
| Soybean oil | -41,947 | 20,995 | -20,239 | -3,979 |
| Wheat | -1,318 | 57,345 | 30,076 | 35,411 |
| Orange juice | -17,748 | 1,627 | -15,272 | -17,748 |
| Coffee | -37,049 | 12,520 | -37,049 | -28,355 |
| Cocoa | -35,497 | -187 | -35,497 | -35,314 |
| Sugar | -249,405 | -72,825 | -209,067 | -178,510 |
| Cotton | -50,523 | 16,051 | -50,523 | -42,382 |
| British pound | -1,717 | 76,698 | 52,325 | 76,698 |
| Canada dollar | -67,971 | 20,555 | -67,971 | -65,253 |
| Euro FX | -75,540 | 32,688 | -56,403 | -66,047 |
| Japanese yen | -67,682 | 20,214 | -36,878 | -43,303 |
| Swiss franc | -37,877 | 22,561 | -37,716 | -35,061 |
| US dollar index | -21,431 | 14,351 | 12,521 | 11,824 |
| Mexican Peso | -73,827 | 21,127 | -58,131 | -10,762 |
| Australian dollar | -74,823 | 12,540 | -70,630 | -74,823 |
| S&P 500 | -100,460 | -23,326 | -53,039 | -54,791 |
| T-note -10 yr | -15,882 | 230,176 | 83,567 | 68,832 |
| T-bond -30 yr | 38,327 | 163,627 | 83,343 | 65,818 |
| Eurodollar | -971,110 | -222,700 | -645,801 | -797,476 |
| Crude oil | -79,159 | 47,478 | -79,159 | -62,792 |
| Heating oil | -56,273 | -4,419 | -56,273 | -48,237 |
| Unleaded gas | -68,615 | -26,770 | -65,114 | -42,292 |
| Natural gas | 71,144 | 134,072 | 108,146 | 107,225 |
| Copper | -3,900 | 29,085 | -3,900 | 489 |
| Gold | -297,493 | -69,496 | -297,493 | -295,926 |
| Platinum | -23,491 | -6,629 | -23,269 | -23,491 |
| Silver | -66,004 | 27,908 | -66,004 | -65,42 |
To view the entire year of commercial data please visit www.pricecharts.com.
Fundamentals:
Crude oil prices continued their medium-term bullish bias as they broke out above a five-month range and rallied to a one-year high of $82 a barrel. That one-year high is a 43% retracement of the one-1/4 year down move from July 2008’s record high of $147.27 a barrel to December’s five-1/2 year low of $32.40 a barrel. Bullish factors include (1) the drop in the dollar index to a 14-month low, (2) the larger-than-expected decline in weekly gasoline inventories (-2.21 million bbl versus expectations of -1.5 million bbl), and (3) the prediction from Goldman Sachs that the oil industry faces a worsening capacity crisis as the industry is currently working at 90% to 95% of available capacity which leaves “no buffer to any kind of supply shock” as demand recovers. Bearish factors include (1) comments from OPEC Secretary-General El-Badri that OPEC may decide to increase production at its meeting in Dec depending on prices and the elimination of floating crude storage, (2) slack U.S. gasoline demand after the DOE reported that U.S. gasoline demand fell 3.3% last week to an average of 8.95 million bpd, the biggest one-week drop since May, (3) abundant crude oil supplies as U.S. crude stockpiles are still 9.4% above their five-year average, and (4) comments from Nigeria's Petroleum Minister that crude oil at $80 a barrel is a "little higher" than fundamentals deserve.
OPEC Summary: OPEC-12 output in September fell by 50,000 bpd (-0.2%) to 28.395 mln bpd from 28.445 mln bpd in August, remaining below last July’s record of 32.775 mln bpd. OPEC-11 (ex-Iraq) output in September fell by 10,000 bpd (-0.1%) to 26.045 mln bpd.
Legend:
CC - consecutive closes
UTL - uptrend line
DTL - downtrend line
Charts provided by www.pricecharts.com
SPECIAL FREE BONUS:
Like me, I am sure you base most of your trading decisions on technical analysis, but don’t ignore fundamentals that can impact the markets. Government economic reports, news events, and weather, sometimes have a significant impact on markets, and you need to be aware of these factors. For the past 75 years professionals and institutions have relied on the CRB Futures Market Service for this vital information. With the 8-page newsletter, which is emailed each Thursday night, you also get the Futures Market Service Early Morning Update. The morning email will save you time by letting you know what happened overnight, and what to expect for the upcoming trading day. The morning email will let you know what reports to watch out for and a consensus in each report. As a Futures Magazine reader you are entitled to a FREE trial to this service. CLICK HERE to take advantage of this offer and start putting the power or Commodity Research Bureau to work for you.
