Energy: For the first time in seven trading sessions Crude made a higher high and higher low as prices will close virtually unchanged today. Sales between $96-97 continue to get rejected. I would not rule out a sideways congestion and on a settlement back above $98 I would venture to say increase bullish exposure. For now I would be lightly scaling into longs as long as $96 holds on a closing basis in June. RBOB failed to remain above $3 closing slightly lower today. Next support is seen at $2.97…that level needs to hold in June.
Energy: On the week, Crude will finish higher by only $1 failing to make its way back to $105 in June. I had been short with some clients for several weeks and based on the action in Crude and outside markets, I advised clients to lighten up yesterday. A trade above $105 and I will likely exit shorts and reverse. Until then I remain mildly bearish. RBOB stayed in a nickel range for the entirety of the week. I’m waiting for a move and once we get out of the current range, I would expect 15-20 cents in the direction of the breakout. Heating oil will finish higher by almost a nickel but unable to take out the 100 day MA to the upside. This was the leader in the energy complex this week but without the help of Crude, heating oil will likely not appreciate much more than current … See the full story here
As stocks go so does the market. I expect the decline in equities to lead to further depreciation elsewhere…consider yourself warned. Crude makes a lower low today and I expect prices to be under $100 for the first time since early February very soon. My target remains $97.50 in May Crude. RBOB and heating oil also appear to be headed lower as another 15 cents south should be the mark if Crude hits my target…trade accordingly. Expect natural gas to be below $2 this week. I had a few clients call today looking to be a buyer…I say hold off until there is a catalyst to justify a bottom. Where do prices bottom $1.80…1.60…1.40 who knows?
May Crude traded within 80 cents of $100 and below the 100 day MA for the third session in a row. This support level is a big deal so I expected a fight. My contention is a break below that level in the coming sessions drags May to at least the 38.2% Fibonacci retracement level at $97.50. I told my clients that are short today that we’ve likely gotten 60-70% of the profit out of the trade and not to get greedy. Though $92-96 is feasible we will cut and run around $97 if given the opportunity. Another $3-5 depreciation in Crude should pressure the distillates 10-15 cents further.
August opened up with a bang to say the least, as today went down as one of the most peculiar trading days in recent memory. It was one of a just of a handful of times that the Dow Jones Industrial Average opened up over 1% only to give up those gains and fall down to -1% within the next hour. After a tumultuous day, the index finished just about flat, leaving traders frustrated as they were taken for quite the ride on a day when most expected stocks to rally. These rally hopes came after the Obama Administration announced their most recent debt deal to Congress with the possibility of the measure being voted on as early as tonight. While some are still pledging to not let the proposed legislation through, they may be forced to swallow their pride in an effort to keep our economy afloat.
Today saw yet another day of frustration in the equity market as the Dow Jones Industrial Average suffered its worst week in roughly a year. The day also saw Barack Obama issue a statement urging Congress to set aside their differences and to pass a bill in order to prevent a catastrophic default from hitting bond markets around the world. However, this plea did little to help boost investor confidence as the S&P 500 finished below 1,300 points to close Friday trading. With just days left before we reach our the final debt ceiling deadline, rumors of a U.S. downgrade have been circulating, and seem to be gaining momentum as the days go on. No matter what decision is made in Congress, it will have a significant impact on our economy, and investors can only wait in limbo until something is put into place.
Thursday started off as the first solid day of the week, but as the trading session progressed with little to no information on the U.S. debt deal, major equities gave back their gains to finish yet another day in the red. As we draw ever closer to the August 2nd deadline, many analysts have begun to worry that both sides are deadlocked, and with a Republican House and a Democratic Senate, that will make it next to impossible to pass any legislation unless one side gives way to the other. While it seems highly unlikely that the U.S. will default on its debts, it is still a possibility at this point in time, a situation that could put the already beleaguered economy into an even bigger hole.
Today saw most equities take another major hit today, as the government seems no closer to a debt deal than it was yesterday. While markets seemed to be somewhat resilient to the rather urgent situation, today saw them finally break, lead by the NASDAQ which lost a shattering 2.7% on the day. The S&P 500 lost nearly 2% and the Dow dropped just under 200 points to cap off one of the worst trading sessions in recent memory. One brand new company weathered the storm though, as Dunkin’ Donuts’ IPO shot up 40%, leaving their stock as a diamond in the rough for the day. As for commodities, today has gone in the opposite direction of yesterday’s strong gains, as numerous commodities sank amid fears and a major economic crisis and a rebound in the greenback against most major world currencies.
Today truly proved to many investors why commodities are such an important aspect of any portfolio; major equities struggled due to yet another day without a debt deal, while nearly every major commodity finished up on the day. Though the strong commodity performance was partly due to a struggling dollar, a number of other factors converged to give some futures an especially robust day as far as performance is concerned. While gold put in a positive day, oil finished relatively flat, while the UBS Bloomberg CMCI index gained a healthy 15.7 points in today’s session. Though many commodity indexes are down from their April highs, the past few weeks have slowly formed an upward trend, giving investors hope for a strong future performance.