Tuesday, November 30, 2010

Gasoline Demand -.3% Y on Y

NEW YORK, Nov 30 (Reuters) - U.S. retail gasoline demand
rose 2.3 percent last week from the week before but fell
slightly year-on-year, tempered by winter weather and increased
air travel, MasterCard Advisors' SpendingPulse report showed on
Tuesday.
Average gasoline demand rose 211,000 barrels per day (bpd)
to 9.33 million bpd in the week to Nov. 26 compared with the
previous week, although that represented a drop of 0.3 percent
from the same week last year.
The reporting period includes the Thanksgiving holiday,
which MasterCard had expected to boost demand as consumers
traveled to visit their families.
Over the latest four weeks, U.S. gasoline consumption fell
0.3 percent year-on-year.
Average retail gasoline prices slid 2 cents versus the
previous week to $2.86 a gallon, MasterCard said.
MasterCard Advisors estimates retail gasoline demand based
on aggregate sales activity in the MasterCard payments system
coupled with estimates for all other payment forms including
cash and checks.

Crude and FX

In Europe this morning the bureaucrats are not having a good one. One can only imagine the scramble to get out of Euro's , from CFO's  to the individual saver.  
Gold In Euros Breaks Out, As Inedible Metal Hits All Time Highs In Europe

 And Brent priced in Euro's hits new highs for the last 7 mo.'s. as well. See Previous post. 
WTI Euro Divergence
Of course today's Eurozone jobless number rising to 10.1% doesn't exactly bode well for whatever products they might be planning on refining from that crude.
And storage isn't particularly attractive with the curve flattening out.

Back to FX - with all the noise over Euro, one can be excused for overlooking the Yen top. 
 The more recent complete 5 waves up from May this year is rather obvious, and the Fib retrace points no doubt will provide some support , at least short term. However this latest move up likely completes a long term move up beginning in '07 at 80.59. If that is true then the the Yen will overlap this years lows, with .97 being a .62 retrace of the longer term structure. 


Combined GDP of Eurozone, US and Japan '09 = 35.6 Trillion
China and India = 6.22 Trillion











Friday, November 26, 2010

Ireland NOT Unique

From Reuters ;
EURO GOVT-Bunds rise on periphery nerves; Spanish yields up
"Yet again, we've kind of shot ourselves in the foot this morning in terms of the front page of the Irish Times talking about how senior bondholders may have to burden-share in relation to the Irish banks," a trader said.
"If the story in the Irish Times is true, Spain and Portugal and Italy and everybody will be feeling the effects of it," he said.




And from the NYTimes;
 
Irish PM's Majority Down to 2 With Election Loss
Sinn Fein candidate Pearse Doherty won an overwhelming 40 percent of votes in Donegal, northwest Ireland, according to election officials. The final result from the six-candidate race is being announced later Friday.
Cowen faces a struggle to win votes on raising taxes and cutting spending after the 2011 budget is unveiled in parliament Dec. 7.

AND
 
Until now, Ireland has stressed that its financial laws give 100 percent protection to senior bondholders, just like depositors.
"The constant 'goal post moving' in terms of regulation ... does enormous damage to investor and entrepreneurial confidence," Ostwald said in a note to investors, adding that such talk will cause government bond yields to rise even in countries like the U.S, Britain, Germany and France.

Coming soon to a theatre near you.
See Dubai Not Unique

Thursday, November 25, 2010

Euro Update

click to enlarge
Pretty easy to see the 5 wave count down off the 137 high. So far the action off the lows is looking like an abc correction with c=.78 of a. With a better than average likelyhood of new lows , we will call the move down 1 of greater degree and the correction 2. So a 3 coming up.
click to enlarge
So if we can expect another move lower, it will easily take out the .618 retrace of the last leg up as well as the .76 and .78 (would be 1.2952). Even equal legs down targets 1.289 from here. So likely will confirm the above structure UP as an -A-, -B-, -C-.

What does that mean? Well if it's a corrective ABC  up, that is complete then new lows under 1.1880 could be expected.

European Yields Hit Highs on Turkey Day

Ireland :
click to enlarge
Nov. 25

Spain;

Wednesday, November 24, 2010

WTI Update

Turns out the move down  was a "b" wave, down and under on the Jan contract , conventional on the spot mo.
Additionally the consolidation has taken quite a bit of time so relabeling the Elliott count is called for;

click to enlarge
 A "2" wave of course CAN carry quite deeply into the body of the "1" , however given the down and under "b" this will more likely end up as a flat with resistance very nearby at the .382 retrace, if it hasn't reached it here.
Of course the USD and geopolitical risk has me leaning toward the interpretation as a flat.
The longer term implication of the "3" wave being about to begin, actually increases downside risk here significantly. Even modest Fib multiples of the "1" put the measured target for "3" well under the 75 level. If we are looking at an ABC down off the highs and C=A from here that puts WTI at roughly 75.
 



Tuesday, November 23, 2010

Monday, November 22, 2010

WTI- is consolidation done?

click to enlarge
If the above label of 4 is correct we have started a "5" down with targets as described in prior
TI Again post. If the 5th extends and is 1.382 x the 3rd wave it will target 75.68 or lower.
Of course if the lows today are a "b" wave, then we revisit the mornings highs.

Greece II

Now it's the Greeks turn again. Check out the new highs in the bond yield.

Natural Gas Update

If you are interested in the backstory here is
Natural Gas Review  from June 8, and 
Natural Gas /Seasonal Lows from Aug 29

click to enlarge
The rally off the seasonal low has been rather difficult to count, with sharp reversals and abc's so far being the pattern. This can be indicative of merely corrective moves, however for reasons stated in above links, the rally likely has further to run even though it is structured in abc's.
If the next series of abc's were to equal the first "a" it will target roughly 4.80. Additionally the move up is 50% of the 2.40 to 6.11 move at 5.07. Please note the horizontal resistance at the 5.00 level.
So 5.00 +/- .10 will be closely watched.

click to enlarge
Shorter term the 50% pullback of the -3- wave ought to contain the -4-, and an overlap of the 1, at about the same level, would raise red flags on the bullish count above.

Week End Fundamental News

The CFTC Commitment of Traders report reveals specs liquidating last week; oil long and natural gas short open interest both coming down.  Bloomberg has a nice summary and groovy charts for both the crude net longs and gas net longs.
Given the still sizable NYMEX NG managed money short open interest at  201,274 contracts, I'd guess there's still a ways to go.
NG Net Longs

Of note also is last weeks Baker Hughes Rig Count, finally starting to decline; the 19 rig decline is all NG.

Thursday, November 18, 2010

Euro and the SP

For the first time in a long time the SP and the Euro are not working in tandem. The Euro DID have a big night up but has been coming off since the NY open, as has the Yen, yet SP's have been of course on a tear. TY GM , Ben B et al. How long does this key correlation of the risk trade continue to diverge? This occurred during the period  just  preceding the SP high as well.
 SP Dec Hourly
click to enlarge

Euro Dec Hourly
click to enlarge
Note the SP's have reached the 50% retrace of the move down.

TI Again

Ti DID get lower lows, though not 3 dollars worth. In fact the 3 wave count looks complete at 1.23 x the 1.
Jan
 So  far this is only 3 waves down, it needs a 5th to qualify as an impulse wave and the beginning of something much deeper. It could be that the 3 waves are an abc down into the 4th of lesser degree, but crude would have to overlap 85.76 to confirm that (though retracing more than .618 or 83.81 would be a good indication of that happening). Still believe the longer term structure and factors dicussed in yest.s post favors the impulse wave down and a much bigger move to come. The 50% retrace on the above really should contain the bounce.
Jan


The 3 did not (at least yet) extend, and at 1.23x 1, was rather minimal. Subsequently the 5th, if it shows up should get an extension. If it were to be .618 of 1 thru 3 it will be 4.94, very similar to the preceding waves, if it extends, say 1.382 x the 3rd =7.19 and so on.

Wednesday, November 17, 2010

Euro

Yesterday the Euro of course was the big story. At the lows of 134.44 it had retraced 50% of the entire leg up that began in late August, and bounced. A little.
click to enlarge
A 50% retrace can often  mark a reversal (see crude oil) but it all depends on context. How's the overnight bounce look?
Dec 15 min
click to enlarge
Doesn't look exactly like an impulse wave up.In fact it is clearly corrective with overlaps and a rather modest .382 retrace of the last leg down yesterday morning.
So at the moment lower lows look pretty likely. 
How much lower? Under the next milestone would be the .618 retrace at 132.30.
It seems like just yesterday the whole world was complaining about the devaluation of the USD and hyperinflation. Although yesterday no doubt saw a lot of liquidation, I'm guessing there are still a few Euro longs/ USD shorts out there.


Tuesday, November 16, 2010

WTI Update

Where is the next 5 bucks most likely coming from:

click to enlarge and sharpen
Note the MACD crossover, a similar set up occurred in early Aug. The RSI is not yet oversold.
And how bout those last four candlesticks...ouch. Still haven't even reached the .382 retrace.

click to enlarge
As yet no positive divergence on the hourly RSI. All together this looks like the next 3 bucks anyway is coming out of the downside. WTI would have to bounce a long way to indicate a possible reversal.
The wave labeled 1 is 4.20, 3 will =1.618 of 1 at 78.96




Friday, November 12, 2010

WTI

The pre-open high yesterday of 88.61was a 49% retrace of the 147 to 32.40 collapse. That collapse was a clear 5 waves down from an all time high.  The leg up from the lows has been anything but a clear 5 waves up. It is a very difficult structure to count, with many possible alternative interpretations; typical B wave.
There will be another major leg down ( at least) of either 5 or 3 sub waves. If that major leg down were to equal the 1st leg in percent terms from 88.61 , then 19.50 becomes the target. If it were to be equal to .618 of the 1st leg in nominal terms then 17.92 becomes the target. So the long term downside risk from wherever the B wave terminates is obviously huge.
Shorter term the technical damage done last night signals the completion of the move up that began in late August.



As seen above the move down off the current highs has found short term support at the .382 retrace and 4th of lesser degree, on the subwave -5- of the last leg up.
But the hourly bar chart reveals a 5 down off the highs...so more to come ...
Look to the 4th wave on the daily chart and 50% pullback of the 71 to 88.61 move around 79.75 for nearby support...still a long way off.
I think if it were to take out the .618 retrace of that leg at 77.60 it would confirm the top was in.

Thursday, November 11, 2010

Natty

The natty ran into resistance at the 50% retrace of the last leg down, 5.23 to 3.27 on the spot chart.
And has so far found support at the 50% retrace of the last leg up on the hourly chart.

 On the upside, if the current structure down were to reverse and overlap 4.126, it would confirm an abc down, and raise the probability of higher highs.

In Case You Were Wondering

From Calculated Risk

European Debt Update

Don't miss the interactive charts links Ireland today; 8.92%

 

 



 

Tuesday, November 9, 2010

Gold Tops

At the risk of offending the gold bugs:

click to enlarge
The 5=.618 of 1 thru 3 @ 1450. Note the negative divergance on the weekly RSI.

 Daily

Agian note the negative RSI divergence. In this chart the (5) = (1).
Looks like 1386.5 is the next milestone.

I don't really have a count on the very long term chart but the downside risk here is considerable.




Natural Gas: Spike Ahead?

It's been quite awhile since my last NG post. I am having technical difficulties with my charting package but expect that to be resolved shortly. In the meantime..The spot month low of 3.21 in the Nov contract was an exact .78 Fib. retrace of 2.40 to 6.11, slightly exceeding the 3.28 long term target mentioned here many times. This likely completes an abc down from 6.11.
This  has long term importance as a probable B pullback, making the current move up,  C with significant  upside risk.
click to enlarge
If the current structure up is equal to the first series of abc's,   it targets 6.92. If the move up equals 1.62x the first structure, it targets 9.22  Sound a little unlikely? It always does. 
Note the history of sharp spiking action on the monthly chart.
It is also important to note the clear ABC down from 15.70 in 2005 to 2.40, 4 years later. Within that context NG has only just started the next structure up. Here a 50% retrace targets 9.09.



Daily
The move up off the recent lows CAN be seen as either a series of 1,2's or more likely abc's.  AND abc's , while more difficult to count, are commonly found in almost ALL Natural Gas moves.
Please note the Fib numbers are plotted from the spot mo. points.
Taking out the .618 retrace above, at 4.47  should get things moving on the upside.
30 min
 Shorter term NG DID make a new high this morning, and after mucho overlaps, maybe it's time to run a little.
Holding the nearby Fib. retrace's .38 or 50% would be very encouraging for the bullish case. Considering the lack of spec long participation, that may start to be a feature.

Monday, November 8, 2010

SP Overview.

The last year, by anyone's measure (except Ben and Tim maybe) has been challenging.  particularly of late, Elliott has at times appeared irrelevant at best. Keeping the big picture in mind is useful in confusing short term action.
 First and most importantly, the .618 retrace of the entire collapse is still resistance, in fact it was hit square on the nose at the highs last week.. Second, the most recent series of abc's is .382 of the first series (of course that is also a result of the .382 support on the pullback and the virtual double top). Within the second series of abc's, the "c"= 1.59 of "a".
BTW  the first structure up of the corrective rally has "c"=.61 of "a",  while the " b" is so full of overlaps and multiple interpretations it HAS to be a "b", hence the unusual labeling.
Despite the many central gov. interventions in free market activity it would seem that Fibonacci ratios are at least still a measure of extremes of market behavior and related legs.

Friday, November 5, 2010

NOW WTI Tops

Just a quick take, as I am on the road today;


Of course there is always the possibility of another series of abc's up, but given the last weeks hurrah, the likely hood of a blow off hitting this week amidst all the  buulish hyteria is high at least intermedite term.

More later.

Wednesday, November 3, 2010

WTI Tops


click to enlarge
This chart  action can only be described as a series of abc's with repeated overlaps of previous highs and lows.This is NOT characteristic of an impulse wave and thus is by definition corrective.
The amount of time spent chopping up from the May lows and the extent of the retrace, 89%,  probably argues for the move up to be labeled a "B" wave.
Still, a "C" wave can easily carry to 1.62x the "A", putting the WTI down at 53 from todays highs.
Is this choppy move up done?
Most of the dynamic driving the rally's has been of course the USD, NOT demand as evidenced by the inventories and refinery activity. And the USD is primarily a function of the Euro/USD. With the PIIGS credit spreads blowing out,  QE 2 is obviously the  much (overly) anticipated factor. If ever there was a sell the news situation this is it. The only equivalent in memory might be the actual bombing of Baghdad during the 1st Gulf War.
 Looking at the above , 79.81 jumps out as important support , and taking it out would  signal a likely end of the protracted upside choppy abc structure. Take a look at the termination of "a" on the top chart, at 79.70.

 click to enlarge
Shorter term ovelapping the 84.00 level  and 50% retrace will trigger that test of 79.70















Monday, November 1, 2010

Euro Update

click to enlarge
Note the negative RSI divergence and how that has been an effective method over the last month for identifying turns.

So far this is moving down in abc's, a characteristic of corrections, however, the entire move off the lows of 1.1880 is so far an abc with c =110% of a. It is possible to see a move to retest the lows struictured in abc's.
In any event  even a modest retrace of  the last c up of .382 targets 1.3562



Rig Count Increases...Again

From Baker Hughes
click to sharpen

Lots of oil drilling going on ... in fact a record.

 Natural Gas a still catching up...
 But check out the super productive horizontal drilling numbers.

Hedge Funds Increase Bullish Bets on Oil to Six-Month High

(Bloomberg)
"Hedge funds raised bullish bets on oil to the highest level in more than six months as supplies of gasoline fell, French refinery strikes ended and plants in the U.S. and Europe returned to service.
The funds and other large speculators increased wagers on rising crude prices by 9.3 percent in the seven days ended Oct. 26, according to the Commodity Futures Trading Commission’s weekly Commitments of Traders report. It was the highest level since April 16.

Net-long positions in oil held by what the CFTC categorizes as managed money, including hedge funds, commodity pools and commodity-trading advisers, rose by 15,183 futures and options combined to 178,824, according to the CFTC report.
Bullish, or long, bets on gasoline prices declined 10 percent to 51,732, the first drop in eight weeks, the data showed. Net-long bets on heating oil fell for a third week, retreating by 1,609, or 4.1 percent, to 37,284.
Net-long positions in futures and options combined in four natural-gas contracts decreased by 2,133 futures equivalents to 21,381 in the week ended Oct. 26, the CFTC data showed."

There has been a lot of accumulation over the last month by specs, all over $80.