Tuesday, March 30, 2010

WTI Roll Over

click to enlarge 
We are looking at a rounding top that is rolling over in very slow motion, interupted by repeated and sharp, but failed, attempts to make new highs ( the 2 waves of ever lesser degree).
Very tough on the shorts, but it will likely be tougher on the longs when the moment of recognition arrives...
buying into weakness will probably persist right up until that point, and it could be a ways off.
 click to sharpen



Natural Gas

Natural Gas finally seems to have found some buying after double bottoming at the Fib. .618 retrace of the spot month 2.40 to 6.11 structure. The trend line defining the very consistent move down over the last 6 weeks is crossing just overhead and new highs on the day will take that out.
click to enlarge
The  ABC structure up from 2.40 is probably complete. The 6.10 high is right on target,  seeNatty  or any of the last month's post's.  On the spot chart the C=.66 of A, a similar relationship as 2 to 3. On the Feb contract we have C=A.......
The structure down will have to be closely observed;  prob. another abc, with no new lows under 2..40, targeting some Fib retrace ie .618 at 3.82. That  spot month 2.40 low was an 85 % retrace of 15.78 and ending an ABC down that took years to complete. This little abc up is too abbreviated to correct that."

Ok, so it only took 2.5 months to get to  the .618 looked for, thanks to the unrelenting move down pictured above, and frankly I had thought it would be choppier, more abc like than what we have so far seen ( but hey).
The italics above explain why risk of a significant ( in this markets terms ) move up from here is likely, either from here or the .76 retrace at 3.30.
Expectations of the next series of ABC' up would be modest in recent historic terms but a structure equal to the first ABC up from 2.40 to 6.11  implies a 100% gain from these levels.  

Euro Resumes Slide

click to enlarge
After retracing 50% of the last leg down, the Euro is resuming it's move down.
There is a big cluster of intermediate and long term support at the 1.29/1.30 level, see 
Euro Targets , so what it does at that point will be very interesting.
Additionally if this next leg were to equal the 1.3820 to 1.3250 move, it targets 1.2988 from today's high of 1.3538.

Monday, March 29, 2010

Rates

Chart for CBOE Interest Rate 10-Year T-No (^TNX)













click to sharpen and enlarge

Note the head and shoulders pattern signaling the top in rates between 1980 and 1985. The recent low in rates is also shaping up as a head and shoulders.... a reverse head and shoulders.

Chart for CBOE Interest Rate 10-Year T-No (^TNX)

Friday, March 26, 2010

WTI

WTI Elliott Update is way overdue;

All of the corrective 2nd  waves up  have been extremely deep since making the $84 spot mo. high back in
early Jan. Nevertheless, whether you count the move up from 32.40 to $84 as a 5 wave, or a series of 3 ABC's
there is a high likely hood of a much more significant move down than we have seen thus far.
This rounding top pattern can result in a "stealth" series of lower lows and lower highs, with the "moment of recognition"  coming late.
 click to enlarge
On a more philosophical note, WTI is a good reflection of the worldwide stimulous efforts, and inflationary expectations surrounding that, vs. the continuing evidence of the developed world critically handicapped by debt.

Wednesday, March 24, 2010

Euro Targets

From Nov.26, Where Is the Euro
" Long term the Euro topped out  July08 at 1.6038 and moved down in 5 waves to 1.2329 a year ago October .  That .3709 long term move down  is retraced .78 at 1.5222.
A failure by the Euro from here projects to a minimum 1.2856 as C=.618 f A. And of course the C=A at 1.1435."
That day the Euro high was 1.5145.
Today the Euro has decisively taken out 1.34 , the .618 retrace of the the entire B wave up from 1.2323 to 1.5145.
The next  Fibonacci retrace point providing potential for a pivot is the .76 at 1.2995.
Note that is just over the 1.2856  minimum target for this C wave down.
 click to enlarge

The weekly bar has a 5 wave structure down from 1.514, and it appears we are in the 5.
The  5 =1 at 1.29 as well.
So there is a pretty significant cluster of support around 1.29/1.30.
So will that be it?

The Euro bottomed in 2000 at .8229 following its debut. It then rallied for 8 years into the 1.6038 high.
The .382 retrace of that is at 1.3030. The 50%  retrace is at 1.2138, and the .618 is at 1.12.

My guess is that THIS ABC stucture down will carry to at LEAST the 50% (or 1.21). I don't see any reason for the ABC structure to be unusually quick or shallow. And even if you were thinking that the .82 to 1.60 move was structured in 5 waves, what would  be the 4th of lesser degree was at 1.16 : a likely target for a pullback. 
So the support at 1.30/1.29 will likely produce a decent bounce, and it needs careful watching for structural clues to it's nature...


Monday, March 22, 2010

DOT: Vehicle Miles Driven decline in January

From Calculated Risk,
Yesterday we discussed the impact of high oil prices on vehicle miles driven.

And today the Department of Transportation (DOT) reported that vehicle miles driven in January were down from January 2009:
Travel on all roads and streets changed by -1.6% (-3.7 billion vehicle miles) for January 2010 as compared with January 2009. Travel for the month is estimated to be 222.8 billion vehicle miles.
 click to sharpen

More Open Interest

Bloomberg:
Speculators’ Bets on Natural Gas Drop Reach a Record, CFTC Says
"There was “heavy, heavy managed money” buying in oil and selling in natural gas, said Peter Beutel,
...Speculators increased net-long positions for crude oil by 14,829 to 124,143 contracts in the same period, according to the commission.... Net-long positions, or bets that gasoline prices will rise, also hit a record high, according to the CFTC.

Rbob Apr. 
click to enlarge
Wonder where they bought?




Sunday, March 21, 2010

Euro, It Was Nice Knowin' Ya

From Zero Hedge,
"The most recent CFTC committment of traders report indicates that as of March 16 net speculative euro short positions got clobbered in the past week, and declined by nearly 40%, from the all time record bearish -74,551 to -46,341. Comparably for the Yen,  In the yen, of per March 16, speculative accounts had a net long of +15,197 contracts, another 40% decline from of the prior weeks's +26,288. On March 16, the euro closed $1.3769 compared to Friday's closing levels of $1.3534. In the meantime it was discovered that Europe won't be bailing out Greece after all, so all you speculators who closed out your shorts in anticipation of a squeeze: better luck next time.'

Friday, March 19, 2010

SP Trendline Alert

"Nuff said."

Euro

From Wed. Mar. 17
Euro Correction Update"In other words there is no reason to see this move up, SO FAR, as anything other than a corrective bounce of,  possibly,  ONLY a subwave of the move down. It'll have to do a lot better to indicate otherwise. Like take out the .618 upside retrace at 1.45.( hello GS).

The lows at 1.34 are at the .618 retrace of the entire B wave structure up from 1.29 to 1.5140. That is not insignificant as support and possible pivot point. So taking that out and closing below it will put a hole in the Euro bull case."

It looks like the Euro is about to do just that. It's put in 3 days of significant declines., taking out the support trend line in place since the early Mar lows, and so far has retraced 74% of the preceding abc up.
At this point, the risk of a collapse through 1.34  (the .618 retrace support of the B wave up), is high and downside targets a long way off.

  See  
Where Is the Euro       published Nov.26 2009
"A failure by the Euro from here projects to a minimum 1.2856 as C=.618 f A. And of course the C=A at 1.1435."
Any bounces should be exploited.

This time it IS different....isn't it?

It's worse.
On Zero Hedge I found this link to Rogoff and Reinhart's paper, "This Time is Different: A Panoramic View of Eight Centuries of Financial Crises. Commodity prices vs. sovereign defaults is classic.

Wednesday, March 17, 2010

Whole Lot a Drillin' Goin' On

OPEC Expands Oil Rig Drilling the Most Since 2007 (Update1)  March 15 (Bloomberg) --
OPEC is increasing oil drilling at the fastest rate in 2 1/2 years, even as production exceeds its quotas by the equivalent of a supertanker of crude a day and delegates prepare to pledge no increase in output.

The 12-nation group boosted its number of oil and gas rigs by 8.4 percent in January and February, the biggest two-month gain since June 2007, data from Baker Hughes Inc. show. OPEC members excluding Iraq pumped 26.8 million barrels a day last month, 1.9 million more than targeted, data compiled by Bloomberg show. Shipments will rise again this month, according to tanker-tracker Oil Movements."

Hmm, check out Worldwide Current and Historical International Rig Count at Baker Hughes  .

The way I read it, at the current rate, rigs will have exceeded the old high of 3557, made in Sept. 2008, by this summer.

And the DOE's "This Week In Petroleum", weighs in on domestic activity with :
 Oil Rig Counts Increase
Baker Hughes reported that the number of rigs drilling for oil in the United States has recovered since the low levels seen in June 2009. The rig count surpassed its previous post-1993 peak of November 2008 on February 1, 2010 (see Figure) and was 5 percent (24 rigs) higher as of March 12. Half of the overall increase in rig counts since June 2009 has been in the Permian Basin of West Texas, where rigs drill primarily conventional vertical wells. Just under one-fifth of the increase has occurred in the Williston Basin, straddling Montana and North Dakota, where horizontal drilling programs have rapidly increased production from the Bakken Shale. (These two areas also accounted for about two-thirds of the drilling during the previous peak in 2008.)

Meanwhile
 click to sharpen

Euro Correction Update

click to enlarge
The "c" is equal to .62 of the "a".
The bounce off the lows has retraced a Fibonacci. .23 of the 1.5140 to 1.3440 move at today's high 1.3818.

Of course .236 seems a shallow and briefly lived correction ...and there are a lot of shorts...but the leg down beginning at 1.5140 ( or the first leg down) may very well not be complete at 1.3440. This corrective bounce up is a .38 retrace of the 1.45 to 1.34 sub wave  
at 1.3840.
On the downside,  1.3680 is the .618 retrace of the wave labeled "c",  and this structure up probably needs to hold that to remain intact.
In other words there is no reason to see this move up, SO FAR, as anything other than a corrective bounce of,  possibly,  ONLY a subwave of the move down. It'll have to do a lot better to indicate otherwise. Like take out the .618 upside retrace at 1.45.( hello GS).

The lows at 1.34 are at the .618 retrace of the entire B wave structure up from 1.29 to 1.5140. That is not insignificant as support and possible pivot point. So taking that out and closing below it will put a hole in the Euro bull case.

Monday, March 15, 2010

Natural Gas

click to enlarge
Note that I am using the spot mo. 5.58 high for the Fib retrace points.
The .382 retrace and the 50% retrace are also the 4th of lesser degree highs. 
We came close to but did not hit the 50% retrace of 2.40 to 6.11, which is just under the low at 4.26.
This move down is probably an -a-, with further lows ahead AFTER some a choppy -b- back up, to 4.80 or 4.94 as .382  and 50% respectively.The .618 retrace is at 5.08.
looking for a -b- up followed by further a move down is predicated on the the early legs from the 6.11 high looking like an abc followed by a consolidation that took it back to 5.58. This trending move down from there does not look like an abc ...yet. 
But if for instance the -b- were to carry to 5.08, a .618 retrace of 5.58 to 4.33,  and -c- was equal to -a-, it hits at 3.83, just over the .618 retrace of 2.40 to 6.11 at 3.81.
Make a nice B wave down target.

Heating Oil Breaks Down

click to enlarge
Note the .76 long term retrace on the daily bar chart above, followed by the trend line break.
Taking out the 50% retrace of the last leg up at 2.06 ought to target the Feb lows 1.8272 (spot month) with fib retrace points as milestones on the way there.

WTI Consolidating

click to enlarge
The move down has pierced the month old support trend line, and appears to be consolidating.
There is a reasonable case that it is the beginning of a new structure down with the recent high finishing a complex move up lasting over a year.
Look to the Fib levels (82.12 above) for the tells.
On the downside, taking out the"-d-" low at 80.16 , ought to target 76.33, the 50% retrace of 69.50 to 83.16 as the next test.

Friday, March 12, 2010

WTI Update

From Wed Mar 10,  WTI Grind  
"this wedge and it's permutations are close to finished.
While -e- MAY not be complete yet and need to touch the upper trend line, the labeling -a-,-b-,-c-,-d-, -e- denotes 3 series of little abc's really, so it COULD be finished already."
 click to enlarge
It did need to touch that upper trend line and we DID get another permutation, very slightly altering the degree labeling on the last abc. 
In any event it sure looks cooked now. 
There is a question of whether  the 83.97 high on Jan 11 was the termination point for the corrective structure up from 32.40 or todays high at 83.16. In  the intermediate term it will not make much difference, WTI still has a HIGH risk of a dramatic move lower. 
The 50% retrace of 69.50 to 83.16 is at 76.33, and looking at that wedge, if we take out 76.33 testing 69.50 will not be far behind.
And really at this stage of the game expectations should be to see AT LEAST a Fib retracement of the 32.40 to 83.97 move, so a modest .382 retrace is  64.27 , 50%  is 58.20, .618 is 52.10.


Thursday, March 11, 2010

SP Wave Structure

click to sharpen
 
click to enlarge
These charts both exhibit similar structural characteristics, of different degree. The general shape appears to be of 5 waves, but each wanna be "impulse wave" is actually structured as an "abc", or 3 series of "abc"'s of lesser degree.. 
This has been a long and difficult count, in corrective abc structures and getting the degree right is, unfortunately, often in retrospect. 
Note that the recent leg up from 1040 is .37 of the 666 to 958 leg and .39 of the 870 to 1148 leg.  On the basis of that relationship, and the count up from 1040, this may well be the final flourish of the corrective rally.
Of course, it may turn out the latest up from 1040 is of "lesser degree" and there is another iteration after some fib pullback.In any case a .618 retrace of 1040 to 1148 puts it back down at 1081 roughly the "d" support area.

Wednesday, March 10, 2010

WTI Grind

Thus far no impulse wave down for WTI.  However this wedge and it's permutations are close to finished.
While -e- MAY not be complete yet and need to touch the upper trend line, the labeling -a-,-b-,-c-,-d-, -e- denotes 3 series of little abc's really, so it COULD be finished already.

Tuesday, March 9, 2010

WTI Again

click to enlarge
The Fib retrace points drawn above are from the 69.50 spot month low.
Note the 50% point is just under the 'a', and if you are counting this structure as 5 up you don't want that overlapped. 
Diagonal triangles or wedge type  patterns are usually seen at the completion of a larger structure of greater degree, and precede a powerful reversal of the trend. USD is a good recent example.
Is this what WTI has in place? The initial move down off the high is difficult, there is a double top at 82.41, and lots of overlaps , all making for a less confident count. 
So watching for an accelerating leg down through the first Fib retrace of .23 @ 79.37 then the fib 50% level at 76. On the upside, the high today at 81.63 needs to be taken out to target a test of 84.


Monday, March 8, 2010

WTI Count

click to enlarge
Lots of ways to count the move up , and in general it DOES have an overall appearance of 5 wave structure from 69.50. Deja Vu  right. Upon close inspection however it proves a little tougher to get 5, more like lots of little abc's.. In any case, intermediate term, the above looks like a rising wedge or perhaps a diagonal 5th, with a throw-over. It does NOT look like a buy. Back under that rising trendline and this will look like it's getting a pull back to the "d" 77/76 area.

Friday, March 5, 2010

Natural Gas

From Feb. 16,   Natural Gas Update
"the corrective choppy move up from the 5.06 lows has taken long enough that the whole thing appears to be an abc structure, correcting the fist abc down. That spot month  6.11 to 5.06 move of 1.05 will be equaled at 4.50 if todays high completed the abc structure up. That is just under the Mar contract low of 4.56, and would be consistent with a B wave of larger degree."
and Feb 19, Natural Gas Outlook   for a longer term context.

The move down from 5.58 is looking done or nearly so, with an extension in the 3rd wave including a gap. There may be one more little new low. So Is NG going to put in new highs from here?
Much more likely that this is an "a" down (or even a 3) and any rally will be a retrace to some Fibonacci point, followed by further legs down to 4.26 or 3.81, as 50% and .618 targets.
 
click to enlarge
I'm using the 5.58 spot month high for the Fib retrace points. Note how they fall into place with the 4th of lesser degree and the 3rd wave gap.

Thursday, March 4, 2010

Euro Update

 
click to enlarge
If you were hoping that the move up off the lows in this chart was the beginning of either a reversal or a correction of substance, rather than the end of a correction up as labeled, the.618 retrace needs to hold.
Yes perhaps it'll be the .76/.78 but the .618 is the biggy.
Besides the 1.3434/1.3443 support has been in place since 2/18, and taking that out ought to put the 1.34 Fib .618 retrace of the whole B wave up, under some serious pressure. Got to test that.

Downsizing (Morning Yuk)

Greece could sell islands to cut debt - German MPs

Patmos is nice.


Wednesday, March 3, 2010

RBOB

 
click to sharpen and enlarge
Note that the Rbob retrace off the lows is roughly at 50% (believe they use settles on this chart).
Additionally the move up from 1.6416 is now at 2.25 equal to 50% of the first sharp move up off the lows to 2.098.
This is still merely a correction to the initial 5 wave move down in 2008. 

SP Fibonacci .78 Retrace

 
click to enlarge
This count looks like a 5 count up , but also counts as a series of abc's, 3 in fact, corresponding to the abcde labeling. The important thing is the .78 retrace of the entire move down from 1148 to 1040.
So there is good probability of either a serious pullback as a 2 if your a bull, or possibly b down of a longer lasting 2 up of larger degree, or even a completion of 2 at today's highs. In other words looking ripe.
Taking out any of the previous lows would look increasingly bearish of course. 

One of the characteristics of a 2 wave is that it feels like the resumption of the old trend, with the very late buyers deperate to get on board before the next big trend. 
Well, I was feeling it yesterday, listening to all the Bloomberg interviews with the mining industry bulls down in Fla.

Heating Oil Inventory Draw

API reported Distillate stocks down 4 mm bbl.s......
I wonder if they count these?

 Vitol Group Owns 25% of Oil Products Stored on Ships, EIG Says

March 3 (Bloomberg) -- Vitol Group, a closely held commodities trader, owns almost 25 percent of the refined products stored on ships, Energy Intelligence Group Inc. reported, citing a survey by a tanker broker.
Geneva-based Vitol stored almost 20 million barrels of oil products of a total of 79 million barrels identifiable on ships in the third week of February, EIG said, citing data from ACM Shipping Group Plc.
Trafigura Beheer BV had almost 11 million barrels of refined products on tankers and Royal Dutch Shell Plc owned 10 million barrels, EIG reported. Jet fuel accounted for 13 million barrels of the fuel in storage with most of the rest being diesel and heating oil, EIG said.
Of the 102 vessels used for storing oil products, 11 were very large crude carriers that are likely holding 1.9 million barrels of diesel and heating oil, according to the report.

Here's a little something to go with the above. Go to the DOT
Are they plowing yet?

Tuesday, March 2, 2010

SP and Fibinacci Retrace

 
The Fib .76 retrace is of the whole move down off the highs of 1148.
Should prove interesting.

WTI Update


  
 click to enlarge
So far the move up off yesterdays lows looks corrective, labeling reflects that, but it could easily turn out other wise, with any number of possible resolutions including it being a "b" of a 2 down.

Euro Short Term Update

The Euro may be in a ' c" up of a 4th wave following the overnight lows. That idea is negated if there is an overlap of the 1 down at 1.3594. The "b" of the 4th is irregular , down and under, at 1.25 x the "a" wave.
 
click to sharpen 
The "c" currently is 1.15 x the "a" wave. If that count is correct, certainly a test of 1.34 is in store, and given the winding up over that level it may well have a shot  at taking it out. Of course the huge short open interest is problematic, so beware a quick retest of the breakdown point if it gets it. On the other hand,  I have an unconventional count of a series of 1,2's down possible, and a seriously damaging move through 1.34 then  accelerating would be consistent with that. 
  
click to sharpen
Longer term a rally back above 1.40 would call for a lot of re examining of the count.
 

Monday, March 1, 2010

NG

 
click to enlarge
So far holding the low and looks corrective off that, as it should. Theew isd a high probability of lower lows to come. But the current corrective move has been shallow and has only been in place a short while. 
Note the RSI divergence and 3 weeks going down.
Probably have to retrace a little higher or sit here longer.

WTI

 
click to enlarge
Note the "d' retraced 50% of the "c" suggesting a relationship to that wave rather than the preceding  abc structure up. The "d" is .618 of the "a", at 80.88, so any new highs really are at risk of a reversal for "b" of larger degree. Watch for RSI divergence on the hourly. 
It may be that the count ends up with different labeling, and the "d" is a "b" of larger degree, implying ultimately some higher move for another abc up or something, testing the highs 84 or close. My primary interpretation is no doubt biased by the fundamentals , and USD potential, general deflation outlook.
 

Euro


 
click to enlarge
Another abc up on the euro, with c=a (pretty much). Taking out this mornings low, a .76 retrace of the c, will strengthen the case for fresh lows. 
There is serious long term retrace support  at 1.34  as .618 of the B wave up from 1.23 to 1.5140.
It IS possible to interpret the move off that 1.51 high as being a series of 1.2's of ever decreasing degree.
So what this thing does at 1.34 will be really critical,  as the potential for an unfolding  series of  3 waves on a move through the 1.34 is certainly present. That would be characteristic of the "'moment of recognition" often associated with a 3.