Thursday, September 30, 2010

WTI High

Crude oil is approaching the .76 spot month retrace of the move down from the early Aug  82.97 high to 70.75, that cuts at 80.03, additionally there is a c=a point at 81 on the Nov. contract. This general area (83) has also contained the range for 49 out of 52 weeks. See WTI - Going Nowhere Fast
Given the sharp move down in the Euro this morning and potential for a top being in on the SP ( C=A at 1155) the crude will likely run into trouble again up here.

Natural Gas

Wow, that was fast. Meant to post earlier this morning but dropped off the kid at school.
click to enlarge
Natural Gas saw a clear 5 wave structure down including a gap in the 3rd wave position. Since the lows of the 27th it has had a double zig zag up, filled the gap, and retraced a fib 38% ...textbook.
From the last post,  Fri. Sept 24  Natural Gas Elliott Update ,
"expect to see the lows taken out and longer term targets 3.28 and 2.95 ( the .76 retrace and the c=a respectively) come into play.However given the history for seasonal lows at this time of year any new low under 3.69 that is looking kinda complete, should be all one is looking for."
Still true, though it's getting rather late in the window for a seasonal low.





Wednesday, September 29, 2010

EIA Inventories- down

U.S. commercial crude oil inventories (excluding those in the Strategic Petroleum
Reserve) decreased by 0.5 million barrels from the previous week. At 357.9 million
barrels, U.S. crude oil inventories are above the upper limit of the average range for this
time of year. Total motor gasoline inventories decreased by 3.5 million barrels last week
and are above the upper limit of the average range. Both finished gasoline inventories and
blending components inventories decreased last week. Distillate fuel inventories
decreased by 1.3 million barrels and are above the upper boundary of the average range
for this time of year. Propane/propylene inventories decreased by 0.3 million barrels last
week and are in the lower half of the average range. Total commercial petroleum
inventories decreased by 5.1 million barrels last week.

Tuesday, September 28, 2010

WTI - Going Nowhere Fast

Imagine for a minute if the price of crude oil ranged between $18.30 and $21.70 for over  a year. Probably think that was pretty unusual to say the least. In percent terms that is pretty much what we've had since last Sept....8.5% swings around the mean of $76.50 (excluding a few outlier weeks).

click to sharpen and enlarge
Strictly speaking the mean of the range 65.05 to 87.15 is 76.10 and the swings represent 14.4%, but if you lose a few outlier weeks the range is 70 to 83 with a mean at 76.50. PSSSST check out tonight's settle.
And if we pause to consider the events of the last 12 mo.s that might have had an effect on pricing ...like the USD swings,  the Eurozone and Dubai debt problems, refinery margins,  inventories at record levels, the BP disaster, OPEC compliance (53%), it all seems even more unusual.
The 76.50 level represents a .382 retrace of the 2008, $114 crap out labeled I or A.  The 87.15 level was 48%.

API Inventories

SAN FRANCISCO (MarketWatch) -- Crude-oil stocks fell 2.4 million barrels on the week ended Sept. 24, a report by the American Petroleum Institute showed Tuesday. The data also showed a surprise decline for distillate inventories, a 2.8 million drop. Gasoline inventories increased 3 million barrels. "The supportive crude oil and distillates numbers were offset to at least some extent" by the larger-than-expected build for gasoline stocks, Citigroup's Tim Evans said in a note to clients. More closely watched data from the Department of Energy is due 10:30 a.m. Wednesday. Analysts polled by Platts expect crude inventories to rise 2.2 million barrels, while gasoline stockpiles are seen adding 800,000 barrels and distillates gaining 400,000 barrels.

SP Outlook

Today is one of the scheduled POMO days; Fed Open Market operations buying  back previously announced cusips of Treas.'s from Primary Dealers. Much of the market anticipates this money is put to work in equities/energy immediately following 11:00, if not before.
In any case there is as yet no evidence that a top is in. In fact the move down has been choppy with overlaps, typical of a corrective move accomp. by terrible volume.

click to enlarge
Short term retesting the highs sure seems likely. Longer term the C=A up off the 1000 lows at 1155 (roughly).
And while we are on the topic of impulse waves...it was very tough work describing the move down off the 1218 highs as an impulse wave, however the low volume structure up from 998 also looks like it's best described as an abc. So overall expecting more of the same...this time another abc down ...the good news is it most likely will NOT carry below 666.

And if the next abc equals the first structure down it measures to 937 from 1155.

Friday, September 24, 2010

Natural Gas Elliott Update

Natural Gas Update presented a pretty good description of where we WERE and the potential outcomes:
"The big Q here is whether this is another X wave down, finding support at the .76 retrace,  to be followed by a Z structure up, or did it  finish up at the 4.144 level, and is now headed for new lows?
Turns out it was an X.
 click to enlarge
The Y structure was 1.74 of the  W, and the Z structure was .74 of the Y.
Assuming that that IS the Z and NOT some b wave within the X , expect to see the lows taken out and longer term targets 3.28 and 2.95 ( the .76 retrace and the c=a respectively) come into play.
However given the history for seasonal lows at this time of year any new low under 3.69 that is looking kinda complete should be all one is looking for. The last 35 cents let the other guy have.


Thursday, September 23, 2010

WTI ...Necklines

My last post on WTI was over a week ago on Sept.13, when it topped out at 78.04;
"WTI approaches the .618 retrace of the last leg down , which is still labeled 1,  in a choppy abc type structure, all typical of a 2 wave.
On the spot chart the .618 comes in at 78.30. Note the 200 day moving avg., see if it settles above it."
Of course it didn't.
At the moment it appears to be penetrating the neckline of what appears to be a Head and Shoulders.
Nov. Hourly
click to enlarge
That measuring rule would target 69.60 ( that number again).
But of course that would take out another neckline that would have a measured target significantly lower...ie. 59 ish.





Wednesday, September 22, 2010

Crude Inventories etc

DOE/EIA Sept.21

I always like the pictures;
And then this:

Hmm , wonder how long this goes on for?

Wed. Morn

Lots of news out there this morning ;

The Euro makes new highs at 1.3392 versus the August 6 peak.

The CAC and DAX are down 1.00%, the FTSE .40 The Eurozone Industrial Orders fell 2.4% in July vs. exp of 1.6%. And the spread on five-year Irish sovereign CDS widened by 33 basis points to 467 basis points, a new record. 

WTI is struggling to regain some of the territory given up yesterday, as it continues the 2 week long divergence from it's inverse correlation to the USD. (WOW)

API inventories rose vs expectations of a draw last night.

SP's eroded below the last months rising trendline (on the wedge).

And Larry Summer's gone on a much deserved vacation after announcing his resignation.

 Bye Lar.

And finally, this mornings Yuk:
NEW YORK—Spanish Prime Minister José Luis Rodríguez Zapatero declared that the European debt crisis is over but said that the governments have to work better together and with markets to stave off such events.
[ZAPATERO]

"I believe that the debt crisis affecting Spain, and the euro zone in general, has passed," Mr. Zapatero said in an interview with The Wall Street Journal on Tuesday.
One lesson learned from the market turbulence that hit the euro zone in recent monthsis that a single monetary policy isn't enough for the European Union, Mr. Zapatero said. "We require further convergence to boost competitiveness, and stronger principles to implement balanced economic and fiscal policies."
Mr. Zapatero, who said he expects no contractions in gross domestic product in coming quarters, offered a robust defense of Spain's economy and the austerity package he has pushed through Parliament.

Would you buy a used car from this man?











Tuesday, September 21, 2010

API's ...

By Claudia Assis
SAN FRANCISCO (MarketWatch) -- Crude-oil inventories rose 2.2 million barrels for the week ended Sept. 17, the American Petroleum Institute said late Tuesday. Gasoline reserves rose 2.4 million barrels, while stocks of distillates rose 2.5 million barrels. Analysts polled by Platts expected a decline of 1.5 million barrels for crude oil stocks, and flat gasoline stocks. Reserves of distillates, which include diesel and heating oil, were seen increasing 100,000 barrels. Crude-oil inventories declined last week for the first time in 14 weeks. More closely watched from the Department of Energy is scheduled for Wednesday at 10:30 a.m. Eastern.

Well tomorrow ought to prove interesting.

SP Update...

Post FOMC statement this afternoon, SP's got the usual double fade with a high tick of 1144. On the spot chart that is C=91% of the A, and a 65% retrace of the move down from 1218 to 1002. It is also roughly where it started to really accelerate down from on May 6.

click to enlarge
 Note the really terrible volume on the upside this month, lower than during the B wave down during Aug.! That's unusual, and can only serve to underline the corrective nature of the structure up from the July lows.

The hourly bar chart reveals a wedge pattern with a last gasp throw over, followed by a NEAR reversal in  late afternoon.
click to enlarge
Note the RSI neg divergence.
Now it is plenty early in this game and there have as yet been no confirming indicators, but I would think the nearby .382 retrace and overlap of the initial leg up in the C wave structure would be a good tell. This market is now all about appearances and after all the effort to jam it up any slipping will be met with panic.




Natural Gas Update

The last 3 weeks of the Oct NG contract trading has been choppy and tough...not least of all due to the potential seasonal low issue. For a little context and the Crudewire take pls see Natural Gas /Seasonal Lows  Aug 29, Natty Update from Aug 31, Natural Gas  from Sept.8, and Natural Gas- Seasonal Low or No? from Sept.16 .
 click to enlarge
 So far no impulse waves to the upside.That argues for this as a corrective move sideways rather than some basing action with the seasonal low behind it.
The big Q here is whether this is another X wave down, finding support at the .76 retrace,  to be followed by aZ structure up, or did it  finish up at the 4.124 level, and is now headed for new lows?
Sometimes the pit trading hours only chart is useful to clean up the look of the wave structure:

 This is near to looking like an impulse wave down from 4.14. new lows. Under the 3.81 level (and the .76 retrace point) ought to do it.

Friday, September 17, 2010

FX Overnight

No Yen reversal and Euro hits .76 retrace . Oh and then there's this;

Sobering report by Barclays warns Ireland may yet need IMF

The bank said a credit line from the IMF could "provide a suitable funding vehicle should this be required by the Irish Government''.
The bank said the cost of bank restructurings (which could come to 31pc of GDP) and poor economic prospects were "unsettling the Irish bond market''

 I don't think that this is new info, but Barclays is after all Barclays and likes to paint an optimistic picture.
Doesn't seem to be bothering the Euro too much yet.
Dec Euro


 Dec Yen

Thursday, September 16, 2010

Natural Gas- Seasonal Low or No?

Wow nice nooner: note the .618 tag and RSI divergence (so far). Must be the JPY/Euro forcing liquidation across classes.

So is the seasonal low in? Or is this a corrective rally with further downside? See
Natural Gas /Seasonal Lows  
 and
Natural Gas
for a discussion of the longer term implications.
 Believe it or not there is still a chance for additional lows, though it better get going on it. Back under 3.92, the .76 retrace of this latest sharp rise would signal a reversal I think, above 4.22 and it's going to look better as it overlaps the first leg down from 5.01





Heroics

The extraordinary interventions in ALL markets by the central banks and gov.'s of All the major economies finally may be having an effect. Most markets are stable.  Nice work.
 The mid range point has been achieved once again..
click to enlarge
Note the volume for the month of Sept.,  worse than August! See Stocks Surge To Celebrate Unprecedented 19th Sequential Equity Outflow, $10 Billion In September Redemption

Check out the weekly bar chart .


click to enlarge
This mornings high of 1228 is the 50% retrace of the entire move down from 1578 to 666, as well as the middle of the range for the last 12 months.

Most of the "forced" price movement from all the intervention over the last year has produced very difficult markets to trade , (unless you are an algorithm), for both bulls and bears. Lots of overlaps and false breaks.
We have seen very very few structures that look like classic impulse waves (excepting the Q1).

My guess is that while a very impressive job has been done preventing the worlds stock markets from utter collapse, "All the kings horses" aren't going to be able to manufacture a bull market either.
B wave down anyone?







Tuesday, September 14, 2010

Euro .618 Retrace

click to enlarge
I'm guessing that the high put in today is part of , if not the completion of, a correction within a correction within a correction.And if it is complete, the next leg down will equal the "a" at 1.2291,  and the .618 retrace of "A" comes in at 1.2428

Monday, September 13, 2010

WTI

 click to enlarge
WTI approaches the .618 retrace of the last leg down , which is still labeled 1,  in a choppy abc type structure, all typical of a 2 wave.
On the spot chart the .618 comes in at 78.30. Note the 200 day moving avg., see if it settles above it.

Thursday, September 9, 2010

Walter Zimmermann on CNBC

My esteemed former colleague, who first introduced me to Wave Theory ( back when it was considered pure voodoo) tells it like it is on CNBC;

Talking Numbers: Charting the Future - CNBC.com

Can't say I disagree, though I'm afraid we will be very lucky to get a few more weeks of stability.

Just in Case You Were Wondering

Nine States Did Not File Initial Claims Data Due To Labor Day, Hundreds Of Thousands Of Estimates In Data "Beat"

The BLS has announced that as a result of the Labor Day weekend, 9 states (among which the biggest one California) did not report initial claims data to the bean counters, so instead the government had to "estimate" what the data would have been: yep, estimate, what the data was in these nine states. From Bloomberg: "For the latest reporting week, nine states didn’t file claims data to the Labor Department in Washington because of the Labor Day holiday earlier this week, a department official told reporters. California and Virginia estimated their figures and the U.S. government estimated the other seven." Official data is now made up on the fly. This US economic data reporting has just entered the twilight zone. Also, when the data is officially made up, it is not that difficult to get data that is "better than expected."

Wednesday, September 8, 2010

WTI

More abc's , and so far it has not exceeded the Aug 27 Fri. night close of 75.57. True I was a little premature declaring that the correction was done at that point, but the .382 retrace of the 5 wave 's down from 83.40 appears to be holding it. BTW 3 series of abc's is supposed to be all you get.

Natural Gas

Natural Gas is giving every indication of having been in a "flat" corrective structure over the last 10 days.
It has been chopping sideways in "abc" structures with lots of overlaps.
It cannot be described as being in an impulse wave up. YET.  And while the  likelihood of seasonal lows are to be anticipated here, it sure looks like they are still ahead of us. See
Natural Gas /Seasonal Lows


Natty typically DOES structure itself in abc's and I have seen deceptive basing action in the past, but compare the current chart above with the Oct. of 2009 chart below.


 In the first 3 days of it's reversal off 2.40  it appreciates 25%.
The 3.28/3.35 targets remain. Pls see post from Aug.25th
Natural Retesting .618 Retrace
or any of the preceding NG posts really.

Tuesday, September 7, 2010

Rbob Gift

From last Wed.'s EIA inventories.

And ...

Today. Call it abc for 2.

FX

The Euro gained momentum this afternoon, in it's resumption of the downtrend.

click to enlarge
In fact it may be oversold very short term. Note the RSI.
However even if this leg is just a "c to complete a corrective move down from 1.3333, if it equals the "a" it targets 1.2158. Thats also a .78 retrace of the bounce off the June lows of 1.18.
 Meanwhile the Yen is looking mighty feisty as it makes new highs. All in all a tough day for the carry trade folks. And so once again  risk appears to be OFF, at least for equities.

Friday, September 3, 2010

WTI Update

From LAST Friday's WTI Elliott Count  , "Post close ; correction done". Not quite, but it never exceeded Friday's high.
So a series of 1,2,'s are what we are looking at. When do the fireworks start?

Thursday, September 2, 2010

SP Deja Vu

Starting to feel like it's deja vu all over again?  You know.the ..."I've seen this somewhere before"   through the roof ramp at the last minute preventing a breakdown and acceleration to the downside screw job on the shorts...kinda thing?


And the expanding triangle pattern, as the 2 wave corrective structure?

And while the following is not strictly an expanding triangle...it's close.
 Is this the correct count? It isn't easy and sure doesn't look like an impulse wave yet.
What might an alternative that really IS an alternative look like?

If it gets above 1100 probably have to give the alternative ( or something like it ) the yellow jersey.

Wednesday, September 1, 2010

DOE/ EIA Inventory Charts

This is starting to remind me of a great summer schlock action movie, where the aging macho star ,  performs one completely impossible feat after another ...this is known in the movie biz as "suspension of disbelief".
And it is late summer. Very late.

As  will no doubt be seen at some point , the bloodshed the above foretells will be all too real for some.

Labor Day Holiday Fun and Games

Yes , it's time to pull out all the stops, with everyone away the mice will play. One of the things I have picked up over the years is the danger of trading during the latter part of August. On my way to the beach until Sept.7
So posts will be slightly more intermittent even than usual.

Must mention the truly impressive currency gyrations ....Was the anemic announcement by the Japanese a set-up?
After all in the global risk on/risk off trade a weaker USD is what everyone needs (without actually admitting it).
In any case the bigger picture is so far unaffected.