Commodities Analysis Video

Hello traders! Stocks are higher, USD reached new lows against the majors during Asian sessions, and it seems that this type of a price action will continue this week, especially after a sharp impulsive break on Eur/Usd yesterday out of its 6-day consolidation range. USD weakness is also seen across the board because of higher commodities. Gold and oil are looking very bullish after reversal from the lows few sessions back.

  Light Sweet Crude The CL contract rose rapidly on Wednesday as traders reacted to the relief of the stock markets as German courts ruled a bailout of Greece wasn’t illegal. This caused a massive relief rally around the world as stocks soared. Compounding that is the fact that several tropical storms are forming in the Atlantic and could threaten oil production out of the Gulf of Mexico for a while. The market stopped just at the $90 mark, an area we have been talking about for some time now. In order to go higher, we need to close above that level on the daily chart. We cannot sell this market currently as the lows are getting higher and higher, signaling strength. Brent The Brent markets rose again on Wednesday as well, and even broke above the most recent high, signaling a desire to rise yet again. The $115 level is where we currently sit, so a pullback at this level isn’t a major...

  The natural gas markets rose during the Wednesday session, but were quickly repelled by the $4 - $4.10 resistance zone as we had predicted. This area has been very resistive, and looks like it going to continue to be. The shape of the daily candle is a shooting star at the bottom of a down move, which is a very bearish signal indeed. It looks as if we are going to go lower and soon. If you didn’t short this market on the bounce like we suggested, a new low gets us selling as well.

  The gold markets fell on Wednesday as traders around the world decided to take on more risk in the various stock markets in reaction to the German high court allowing the bailout of Greece to continue. The pullback has been significant, falling as much as $60 at one point. The other thing to be aware of is the double top we formed at the $1,920 mark. Until this gets broken, we cannot suggest buying as this is starting to look more and more like a top of sorts. Granted, it isn’t the top for good – rather for just a while. The market is way overbought, and this market has a tendency to shake out the late traders which are almost always chasing performance. The area we like is the $1,700 area, and slightly higher. We feel this pullback has been a long time coming, and that it is vitally necessary for the long-term growth of gold to continue. We don’t...

  Light Sweet Crude The CL contract rose during the Tuesday session, but it should be noted that the “risk off” trade is starting to fall apart in other markets. We believe there is still a floor in the $80 area, but the chart does tell us that perhaps this isn’t the only mark to watch. The $90 mark is very important resistance as the market seems to be stuck in a range. Because of this, we like buying dips as long as we are above the $80 mark. We are also willing to take profits before $90 as this market has been choppy recently. Brent The Brent markets had a solid and positive day on Tuesday as traders continue to push the spread between the CL and Coil contracts around the world. The $110 area has held, and it appears that we are set to continue moving towards the $120 area. We are buyers on the dip at this point, and will not...

  The natural gas markets got a bit of a bid in the Tuesday session, but the lack of velocity shows what we have been saying for ages now – that any rally in this pair will be capped and weak at best. This latest action looks like the market wants to go a little higher, and we would let it. We say this because we know that the $4 level is a great spot from which to short this market. We would also sell if we can make new lows as well.

  Gold markets had a wild day on Tuesday as traders bought, sold, bought, and then sold again in the session. The $1,900 level is acting as a temporary ceiling in this market, and this struggle isn’t overly surprising. The resulting candle does look like a hammer of sorts, and the bottom of it touched the $1,850 area, and area that we identified as support. A breaking of the highs on Tuesday sends this market back up. If we get pullbacks, we are looking for support near the $1,800 level as well.

  Light Sweet Crude The CL contract fell on Monday during the shortened electronic session. With the US celebrating the Labor Day holiday, the action in the thin markets are somewhat hard to read. We did fall from a resistance area in the form of $90, so a pullback isn’t a shocker by any means. We think that the actual key turning point in this market will be if we can somehow make a new low, just under $75. We see $80 as being very supportive, so that isn’t as likely as being able to buy on a pullback to the lower 80’s, which is what we prefer at the moment. Brent The Brent markets sold off as well on Monday, but again were thinly traded as the Americans simply weren’t there to trade. The market looks vulnerable at this point, but we are at a support area in the form of $110. If this level holds, this could be a great buying opportunity....

  The natural gas markets were only open for an abbreviated electronic session on Monday as the US celebrated Labor Day. As such, there was very little movement to mention, but it did show a failure to rise during the shortened session. The $3.85 area looks to be supportive, but it seems only a matter of time before it gives way. The recent breaking of the $4 mark as support is a significant event, and the long red candle on Friday also matters. We like selling this market on new lows.

  NYMEX gold rose again on Monday, even with the shortened holiday trading hours. The $1,900 mark was reached again, and it appears that an attempt is on the way to break the all-time highs we recently set roughly two weeks ago. A new high would be another buying signal, but it should be noted that this market desperately needs a pullback. In fact, we are much more comfortable in buying gold on one. The biggest issue with that is it simply doesn’t pull back sometimes. Look for supportive action in the $1,800 area from which to buy.