I think the number is fabricated but nonetheless it is market mover so prepare for tomorrow's jobs number. As of this post Crude is lower by 1% about in the middle of today's range trading lower for the seventh consecutive day. I think we see an additional $3-4 retracement before we run into serious support.
If that assumption is correct expect heating oil and RBOB to lose 10-15 cents.
Over the next few sessions we will know but we may see some gains given back in equities as minor chart damage is being done. That being said expect higher trade in Treasuries and commodities on a stock retraction. Crude continues to flirt with $100 unable to pick a direction.
Turing point…not today and probably not tomorrow but I would expect the equity market to give back its recent gains in the very near future. What that likely means is money out of stocks and into Treasuries and commodities…just an opinion.
Crude remains in no man's land as prices could go either way in my opinion.
Nothing included markets move in a straight line…stocks will not move higher in a straight line nor will natural gas move lower…all things must come to an end.
I am still in a holding pattern waiting for direction in Crude oil. We're still experiencing a tug of war in the distillates as RBOB was lower today and heating oil was higher…the reverse of previous sessions.
Over the years I've learned that when markets are quiet it is easy to fall asleep at the wheel and not abide to your plan but avoid those pitfalls to increase the likelihood for success.
Crude bounced off support and closed back above the 9 day MA above $101/barrel. As long as $100 holds prices should work higher. I have advised the sidelines to clients until we get a clearer picture.
Investors, traders alike wasted no time putting money to work as most stocks and commodities started the new year on a bang. We do not expect this pace to continue but perhaps the public is waking up to the fact that cash and debt will likely underperform select stocks and commodities in the foreseeable future.
With 2011 winding down this will be my last commodity wrap up as I am closing my office until 2012. Happy holidays to all! Crude picked up 1.7% today closing back above its 18 day MA. Traders should be buying dips that hold $95 as it looks like this leg could lift prices back near $103.
Crude finished higher for the third day running now gaining 3.45% as of this post. I expect some back and fill but dips that hold $95 in February should be bought. Hedgers should also start working back into their RBOB and heating oil hedges as bounces in Crude likely will lead to higher pricing in the distillates…trade accordingly. Natural gas is a slight winner which has been an aberration.
I expect further weakness in equities and that weakness could spill over into select commodities…trade accordingly. February Crude is having trouble making new lows. If we do not see lower trade in the next few days we will likely reverse and exit all remaining shorts and start scaling back into longs…stay tuned. A new low would drag prices back near $89/barrel…trade accordingly.
Follow the flow of money as the dollar and Treasuries should benefit and stocks and commodities should suffer. Almost a $4 trading range and Crude is higher by just shy of 2% as of this post. The key today will be if prices close above or below the 9 day MA at $99.90 in January. We will continue to fade any strength as long as last week's highs continue to cap further upside.
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