Thursday, July 29, 2010

Greek Strikes...OOPS

 From this mornings Guardian;

Greek police fire tear gas at striking truckers 

Government issues emergency order as fuel shortages strand tourists and disrupt food and medical supplies

On islands, where fuel supplies have totally run out, tourists could be seen abandoning rented cars by the side of the road while yachts remained docked in harbours or drifted out at sea.....
 ...The strike has further dented tourism – widely seen as the linchpin of the country's economic recovery this summer. With one in five Greeks working in the sector, tourism accounts for almost 20% of GDP

Like yesterdays inventory numbers from the DOE , reality has a habit of eventually intruding itself.
And while I could happily drift off a Greek Island in my yacht, holders of Eurozone debt may not have such a delightful experience.  

Wednesday, July 28, 2010

Natural Gas Spike to .618

clcik to enlarge/sharpen
Note the retrace of the structure down will have retraced a Fibonacci .618 at 4.88 .

Additionally c=a @4.87.


API Inventories Increase...OOOPS

SAN FRANCISCO (MarketWatch) -- The American Petroleum Institute late Tuesday reported a surprise increase in oil inventories for the week ended July 23. Stockpiles rose 3.08 million barrels, the trade group said. Analysts polled by Platts expected a decline of 2.3 million barrels. Gasoline stocks rose 877,000, and stocks of distillates, which include diesel and heating oil, rose 407,000. The analysts surveyed had forecast a rise of 1.1 million barrels for gasoline stocks and of 1.8 million barrels for distillates. The more closely watched government report is scheduled for release Wednesday at 10:30 a.m. Eastern.



See 
Morning Yuk

Crude Oil Outlook

Running into a little trouble at the .618 retrace. Surprise.

click to enlarge/ sharpen
Looks a little different on the Sept.: contained by the 50% retrace. A good argument for selling out on the curve a little BTW. It does make for a very nice, classic, flat abc correction. We have spent the last 2 mo.'s trading within 6% of $75.

So is that "c" wave done here? Well it's no longer oversold anywhere. The trend line over the last 3 weeks has been taken out and has so far provided resistance.
click to enlarge
The hedge funds increased their length in the week ending 7/18, roughly between 75 and 78.
If it exceeds the .618 retrace at 74.60,  it will confirm the end of that "c" leg up, and the likely resumption of the longer term downtrend.
At a minimum, if it's merely corrective longer term, and C=A down from 79.80, it projects to roughly $60, also the 50% retrace of the longer term structure up from 32.40 to 87.15.

On the other hand, using the spot mo. 87.15 to 64.24 leg of 22.91 x 1.618 from 79.80  targets $42.74

Tuesday, July 27, 2010

SP Review

The difficult and capricious swings in the SP since the May 6 102 pt. collapse, are overdue for another look.
click to enlarge and sharpen
Re-exploring the range of that spasmodic selling event was to be expected: the lengthy development of the 2 wave, and it's structure as a running correction, less so.
The B wave is roughly 1.6 of the A, and the C =A (spot mo.)

Sept.
 
Note the slight negative divergence on the hourly RSI.
c=.70 of the a on the above C structure. Not significant from a Fibonacci standpoint.
However the wedge configuration, coupled with RSI and C=A on the daily charts at 
1120, raises the downside risk considerably here. Certainly there is no room for a low print under yesterdays lows at 1096.75. In fact, new lows today under 1106.75 would threaten the upside mo hugely. Check out the wedge trend line.






Morning Yuk

Oil Trades Near 11-Week High; Goldman Says Crude Too Cheap

"Oil traded at about $79 a barrel before a government report due tomorrow that may show U.S. fuel supplies increased last week. Goldman Sachs said futures prices are “significantly” below the level warranted by “fundamentals,” offering buying opportunities for this year and next."

Really? Better read your Chief Economist's paper from last week. 
Second Half Slowdown                                                               

Monday, July 26, 2010

Rbob Update

Gasoline is after all mostly why we care about WTI. etc.
click to enlarge/sharpen
The "c" is 20 cents, the "a" 30 cents, for c=.66 of a. The relationship of 2:3 is of course a primary building block of the Fibonacci sequence. There is a clear 5 wave count down for the "1", and equally clear abc structuring of the "2".  It IS possible that the "c" continues up, to say 2.1650/2.17, the 50% retrace of the 1 down, but ...
 It got pretty close. What DOES suggest a potential continuation to slightly higher highs is the choppy move down to the trendline support, crude and SP strength.



BTW this DOT Traffic Volume Trends for May 2010, depicts some renewed softening for May after the improvements of March and April . 










Saturday, July 24, 2010

COT Charts

From Libanman Futures via Zero Hedge;

Weekly Commitment Of Traders Summary

Check out the managed money inverse correlation on Crude,  Heating Oil, and to a lesser extent Natty.
Of course there is a lag on the reports and the dates are a little wobbly as depicted on the charts but generally speaking these are nice.

Thursday, July 22, 2010

Natural No Longer Oversold

From the last NG post,  Natural Gas Update ,
"Looking a little oversold with minor positive divergence on the hourly RSI."
It was trading 4.30 at the time.
 
It's not looking oversold now, and after a little abc up of  .42 ,  in fact it's displaying some NEGATIVE divergence on the RSI.
As discussed in Natural Gas Update
It has already settled below 4.35 the .618 retrace of the spot mo structure up from 3.85 to 5.19. New lows under there will project to the next Fibonacci support,  .76  at 4.18. That level represents a very deep .88 retrace of the last leg up beginning on May 25th at 4.02, and really confirms that this move down is a new structure.
The next targets are 3.30 and really 2.95, see above link.
Personally , I think taking out 4.45 signals it's on it's way. That BTW is the .618 retrace of 4.29 to 4.72as well as obvious horizontal support.

Wednesday, July 21, 2010

Washington DC

I am with my family in Washington, DC. A long time friend and mentor, Howard Berrian, is being honored with internment at Arlington Cemetery. Hap was the recipient of a Silver Star for his service to this country. He was a Marine who fought at Okinawa and Guam .
Last night after arriving here with my family, we took a walk in the cool of the evening around the George Washington Monument, World War Two Memorial,  the Lincoln Memorial and the Vietnam War Memorial.
It was a humbling experience to be reminded of the great love so many generations  have had for this country, it's ideals, and for their fellow citizens.

Tuesday, July 20, 2010

Euro

Note the neg divergence on the RSI.
The c=1.61 of the a @ 1.3075
And you can see that the last leg down, very possibly a 3 down, has been retraced 62%
If the Euro has new lows ahead if it ,this is where it should reverse from. Target 1.12.

Yen Look Out

The so called risk on/ risk off trade , and highly correlated global asset markets over the last couple years has forced close attention to the USD, and particularly the Euro and Yen when considering potential WTI price objectives.
Context:
from May 28  Yen Again
from June 15 Yen Look Out
from June 29 Asia etc.
from July 9 Yen

click to enlarge
The 1995 high of  1.2478 to the 1998 low of .6787 is retraced 85% at 1.1624 (pardon me for moving the decimal around, really reflects the chart expression).
The high of Nov.2009 was at 116.21
So obviously with the 85% retrace about to be tested close observation will be in order.
Long Yen is a crowded trade. And I believe the count I have is getting rather mature, with one more high potentially completing at least a medium term objective.

Note the RSI neg divergence.
 There has been a lot of abc structuring since 1998 so I , II and III may turn out to be abc.
The III leg will equal the I or c=a , at 116.11. 





Monday, July 19, 2010

WTI

From Sept.1 2009
WTI Screams Sideways
" WTI has been a tough market for everybody except those trading short term, scaling in against a move and then willing to take profits quickly. Just the opposite of most day trading technique. After years of giant trending moves this may be what the future looks like."
Had that right.
 click to enlarge
And from Sept. 8,  2009 
"This characteristic, of reversing immediately following an overlap,  is becoming a feature in a lot of the markets lately. In the good old days an overlap was useful as a confirmation of a count ..signifying the  wave overlapped was at least completed, and possibly the entire structure of greater degree was completed. So overlaps have been used as stop points. And while some things may change, gunning for the stops probably won't.
Having said all that, the validity of the overlap from an Elliott Wave perspective remains."
 And on the spot chart the c= 50% of a @ 78.93.
Of course at this point, after a 13 months + of sideways action, the dump will be when no one is looking for it. 

Hedge Funds Increase Bets on Oil Gains by Most Since 2007: Energy Markets

“Just like last week, when they were short when prices were up, now they were long when prices were down,” said Hamza Khan, an analyst with Schork Group Inc., a consulting company in Villanova, Pennsylvania.


 





Wednesday, July 14, 2010

Natural Gas Update

To put all this in context please take a sec to check out the last 3 posts;
from June 15 Natty Update
from June 22 Natural Gas .618 retrace
from June 30 Natty
 click to sharpen/enlarge
Natural Gas will settle below the .618 retrace of the entire structure up from 3.82 to 5.25. The next Fibonacci support, .76 will show up at 4.17. That level represents a very deep .88 retrace of the last leg up beginning on May 25th at 4.02, and really confirms that this move down is a new structure. As such it will most likely be related to the move down from  6.11 to 3.82, as either c=a @2.94, or c=.618 of a @ 3.84. Given that the .618 retrace of 2.40 to 611 hits at 3.82 as well taking that out will certainly look weak but also be expected of a new  c wave within the zig zag move down from 6.11.
The .76 retrace of 2.40 to 6.11 is at 3.30, the .85 retrace of same is at 2.95, so a  cluster of support at 2.95
BTW another ABC up from that kind of low (2.95) is to be expected and could well be a Fib multiple of the 2.40 to 6.11 move.
Shorter term:


Looking a little oversold with minor positive divergence on the hourly RSI.








Catch Up

On the road yesterday and so.....
First thing to catch my eye is the Euro will achieve C=A up off the spot lows of 1.1870 around 1.2770, also the 50% retrace point of the last leg down, which I've got labeled 3. A nice classic zig zag corrective 4th wave.
Secondly the Yen appears to be holding the 50% retrace point of it's last leg up, which I've got labeled -3-. Taking out Yest.'s high  113.69 should signal a resumption of it's rally and a test of the 117 level , see
Yen
Thirdly, the SP has retraced .76 of IT"S last leg down.

click to enlarge
(The labeling on this chart is likely going to be changed up a little by the end of the week, but the overall picture is of a significant move lower, the speed with which it occurs is the issue...)

 So all in all could be a little tough for the WTI to make much serious headway here beyond IT'S  .76 retrace.
click to enlarge
 (Again the labeling could change esp if the .76 fails, the -2- may end up becoming a "c" of 2)

One thing that strikes me is the continued lack of an accelerating leg , the -3- of 3 etc showing up yet. This collapse of credit and assets beginning around 2007 has always been a "slow moving train wreck", so slow that for many it's imperceptible.  Whether that reflects the manipulation of central gov.s or not will not make any difference in the long run. It is not every day we see turns in the market of Grand Super Cycle degree or even Primary degree.
 




Monday, July 12, 2010

WTI

The spot month  settled at $74.95, unchanged for the last 13 months or so. That must have been the least likely forecast of a year ago. While I'm sure that this represents the ideal for some, it's safe to say the probability of it continuing unchanged for another year is likely low.

Hey , how 'bout that Fibonacci .618 ?
and a little more recently;

and even MORE recently;
 While the move down today may turn out to be only a "b" wave structure , a .618 retrace to 73.15 would not be an unreasonable expectation.

Friday, July 9, 2010

Yen

click to sharpen etc
A test of the resistance line is likely, and a minor throw over common and should be expected before any serious reversal.
Note the MACD crosing up, and the  amount of time the Yen rallied after previous cross overs. 
There also appears to be a seasonal tendency to rally from early summer to end of year / mid winter.
The 4th wave described above looks to be over or nearly so, if the .382 holds. Otherwise it may retrace a little further to the 50% point. In any case obviously a series of 5's will carry it to new highs to test the longer term resist. around 117.

Thursday, July 8, 2010

Really?

I suppose the HFT bots may have completely taken over, but sharp short covering jam jobs have always been a feature of bear markets, esp one day wonders. The big question in my mind is, whether this close to Aug and the usual low volume ( can it get lower?) associated with that month, there isn't a longish DELAY in the anticipated -3- of 3 of III down as the algo's rule? Sept. IS the seasonally worst month for equities.

 WTI
The high of 147 for WTI was achieved on July 7 2008 of course, and the rest of that month was kinda tough ( down $37),  but August 2008 was relatively stable. There is a seasonal high that hits in late August.
 click to enlarge
The countervailing argument IS that, as we know, July can see big downside, and these charts just don't look anything but bad -an overlong, choppy corrective rally following a major primary 5 waves down, clearly rolling over with a Head and Shoulders set up, MACD crossing over, and not even being close to being oversold.

 Here's the SP:



Wednesday, July 7, 2010

WTI Update

From yest. July 6 "Given the pregnant condition of the market (advanced at that) vigorous activity to the upside should be rather muted and contained by either the 4th of lesser degree, in other words right about here, or the .382 retrace area. "

click to enlarge

This bounce seems about right for "c", and the -2- should be complete or nearly. Another downside advance from here should quickly begin to gain momentum. For one thing, under yesterdays lows and it would pretty tough to find any longs with profits from any time over the last year.
Aug WTI


 
And the Weekly has definitely got that roll over, Head and Shoulders thang goin' on.

P.S. Don't forget the Yen.



Tuesday, July 6, 2010

WTI

WTI may have (5) down to complete the -1- at 71.09. That new low exceeded the 50% spot retrace by .80 or 5%. In the meantime, it looks like there is an "a" up into the previous (4) th of lesser degree.

Given the pregnant condition of the market (advanced at that) vigorous activity to the upside should be rather muted and contained by either the 4th of lesser degree, in other words right about here, or the .382 retrace area.
Once again I am traveling today so updates will likely be infrequent.

Friday, July 2, 2010

End of 1st Half Look Back

Published on Dec 21.2009;
Crudewire.com Named Most Accurate Forecaster for 2...
I'll stand by that.

and this too

Equities and the "Risk" Trade

Euro Update

Taking another look at the Euro count this morning as it approaches resistance.
June 29th , the last post on Euro, I emphasized the 50% pullback and was leaning toward caution re the short side possibilities.
" It is possible that it will trace out a diagonal ending 5th wave (like the USD did at IT'S bottom) , or more likely  the recent Euro strength will turn out to  be "a" of a 4th wave, and this move down "b", with eventual targets at 1.14 or even parity. But I reiterate the bulk of the Euro move is behind it."
Since then it's popped almost 5 cents.
 I believe that it HAS been a 4th wave up,  and it is currently at .382 retrace and 4th of lesser degree. Informing that opinion is the 3=1.61 x 1 relationship in above chart, a common relationship.




The Euro will have to overlap the 1.2145 low , the 'b" , to confirm a reversal but an early tell will be weakness under the 50% retrace of "c". The bulls would be looking for an accelerating 3rd wave up not a deep retracement.
So a series of 2 lower lows, for 5 and V,  would complete the C down. 5=1 around the 1.15, and C=A at 1.14

WTI

Yesterdays lows represent an interesting retrace point; roughly 50% of the 64.24 to 79.38 spot mo. rally from May 25 to June 28. On the following spot chart, which rolls a little differently, it's a .618 retrace.


Obviously new lows will advance the bear cause by taking out those potential support points.
And the action off the lows is anything but an impulse wave up.

It may turn out that this mornings low is an little "b" or "x" wave but if there is a return to the top of the range it will likely be offering a dead cat opportunity prior to an acceleration down.

Thursday, July 1, 2010

BP Swaps

If you haven't seen this yet over at ZH, here it is.
And please if you have anything to add to the discussion I encourage any and all ( anonymous) comments below. Anybody have any thoughts on the notional value of BP's outstanding petroleum swaps?
 BP Article                                                              

Fabled (3) of -3- of 3 of III ?

click to enlarge/sharpen 


The count calls for the SP to accelerate down from here immediately , or quite soon, without overlapping 1042. Alternatively, if there is a complete -5- down from the 2 high of 1130,  it will accelerate down after another dead cat bounce. If the latter turns out to be the case, the  .382 retrace should hold it at the middle of the  presumed -3-. 

Taking out the important neckline on the 29th , back testing it, and failing to print above it, is extremely bearish. Yesterday, by overlapping the previous low,  there is another "moment of recognition", and a successful back test of that, followed by new lows, would be exactly the kind of pattern associated with the BEGINNING of an extended wave down; the (3) of -3- of 3 of III.