Commodities Analysis Video

  The natural gas markets suddenly shot straight up during the Wednesday session, and on massive volume. The technical picture looks like it could be changing, although the trend is decidedly down. The 15 cent move broke above the $4 mark, and now we have to see if the market can make a new high, at roughly $4.18 or so. If it does, we could go much further to the upside. However, the trend overall is down, so we are waiting to see if we get a bearish signal in the meantime.

  The gold markets fell on Wednesday, but not significantly so. In fact, the fall received a bounce in the later hours of the session, and the resulting candle looks very much like a hammer for the day. The market is certainly bullish, and the problems in the United States with fears of recession, and the European debt issues – gold is a safe haven play in the uncertain environment we find ourselves in. We are still buying on dips – this strategy has worked most of the last ten years.

  Light Sweet Crude The CL contract broke directly to the recent highs on Tuesday as traders continue to buy this contract from the recent bottoms. The $90 mark still looms just above, but it looks increasingly likely that the area will give way. The lows are getting higher and higher, and this shows a market that is building pressure to the upside. There are many reasons, perhaps supply…perhaps the anticipated Federal Reserve’s new programs to be announced in September, but they all show higher prices in the future. On a daily close over $90 – we are long. Brent Unlike Light Sweet Crude, Brent has broken through the overhead resistance, and in fact even ran all the way to the next big figure at $115 on Tuesday. The market looks decidedly bullish, and we are now net buyers of it.

  Natural gas markets are starting to put up a fight just below the $4 mark, although we have certainly seen the major support area give way. The Tuesday candle formed a bit of a hammer, and it appears that the bullish traders aren’t quite ready to throw in the towel just yet. However, arguing with the trend only leads to losses, and as such – we are waiting for a bounce from which to sell at this point. Certainly selling is the only direction to consider in this market now.

  There are many people that say gold is in a bubble, but the trading action on Tuesday did little to prove that case. The recent hammer last week turned out to be another buying opportunity, and it appears that the Monday pullback was seen as just that – a pullback. The Tuesday session saw another strong showing in the market, and we like to buy pullbacks at this point. We won’t sell gold at all, as the trend is simply too strong.

  Light Sweet Crude The CL contract rose during the Monday session as traders bought into risk-related assets around the world. The oil market has made several hammers recently on the daily chart, and as such it appears that we may be trying to make some kind of bottom in this contract. The breaking of $90 would not only get us bullish, but very much so. A break below $80 is required to think of selling, and until then – we buy any and all dips. Brent The Brent market rose again on Monday as well. The $112.50 technical barrier still sits in the way, and until that level is broken, we cannot suggest buying this market. If we get a pullback, then perhaps – but until then we simply wait for a close above $112.50 to get long.

  The natural gas markets fell on Monday, and have finally broken through our lower levels and formed a new low. Because of this, we are selling this contract yet again, and expect a move down at this point. We have been waiting for this to happen, and certainly welcome this downward motion. The recent consolidation was $1 in height, and as such – technical analysis says that the breakout should be a move for just as long. We are currently thinking that the next major destination is the $3, with many stops along the way of course. We will not buy natural gas at this point.

  The gold markets fell on Monday as the trading public contemplates the recent surge in this market. The $1,800 area seems to be supportive, and certainly the $1,700 area is. Because of this, we still like buying gold, but only on pullbacks. In the present scenario, we feel that perhaps a small long position could be established at the current levels, knowing the there is about $100 below here that should serve as support. If we go up on Tuesday, then we will feel that adding to our position is the prudent thing to do. We do not sell gold at all.

  Light Sweet Crude The CL had a reasonably quiet week this past week, as traders are beginning to ask whether or not the sell off over the last several weeks was warranted. The market stopped recently by printing a hammer on the daily chart, and has been trying to rally ever since. The fall has been difficult for a bull to stomach, but it is times like these that buying can be one of the smartest things you can do. We believe as long as we are trading above the $80 mark, we should be able to buy dips in this market. Brent The Brent market has struggled over the last few days, but we see that it is trying to rally at this point. The $112.50 mark is going to be vital for an extension of the recent bullish trend in this market. We think that based upon the higher lows over the last several days – this pair goes higher. On...

  The natural gas markets sat still this past week as the trading community ponders the severity of a break below the $4 mark in this commodity. The recent price action shows that there are no serious movers to push price higher, so the breakdown of the recent consolidation appears to be genuine. In order to get short of this market, we need to see new lows, somewhere around the $3.80 level. Until then, we see a sideways market in the natural gas pits.