Showing posts from September, 2011

Crude Oil Short Covering and the Wave Count

Last Fridays (expected) short covering has continued well beyond the minimal, having exceeded 84.01 AND the 50% retrace of the entire move down from 90.61 at 83.87. The .618 retrace of that move down awaits overhead at 85.46  Additionally the c= .764 of a @ 85.49.  Hourly  click to enlarge This extended short covering in both time and price is characteristic of this market ( equities as well), and it has been seen in all the Elliott degrees; the B wave up off the 32.40 low, and all the legs since the May 3 high. Active Mo. Daily  click to enlarge Again note the cluster of resistance around 85.45, including the .382 retrace of the last leg down at 85.24....could this be a c wave in the consolidation beginning Aug.9? This very difficult to count Elliott pattern is reflecting global central bank and government efforts to stimulate the economy and support markets worldwide, naturally. Nevertheless the overall action as seen above over the last 5 mo.s is lower. Labeling the waves is di

Speaking of Open Interest

from Zero Hedge,   Bullish Dollar Sentiment Surges By Most In Years, As CFTC-Based Rumors Of Euro Demise Are Not Exaggerated   "the euro is now massively oversold explaining why even the smallest of rumors initiates a furious short covering squeeze. And yes, the next bubble is now not in silver, not in gold, but in the dollar. The first sign of moderation of European stress, or a Hilsenrath piece on the next round of QE by the Chairsatan, and watch the DXY and the various USD pair collapse (and gold surge). " No doubt. But. A little context PLEASE. click to enlarge The above chart is from June 21 but still illustrates the increasing size of the open interest swings. Very possible that spec longs in the USD increase to some new extreme of 40,000++. We ARE in an extreme global sovereign event. But while we are here ....Friday night's WTI spec. O. I.  and context, Do you think it overshoots on the short side too?

Friday Short Covering

On the run today, but the end of week short covering showed up nice and early this morning. After all it's been a very generous week. My guess is there will be further to go on this move down. Yet to see an extension anywhere since the May 4 highs, so one is overdue. If there is enough retrace by the close, say .382 / 50% , probably a good opp. at the respective Fibonacci levels to position prior to the week end . Active Mo. Hourly click to enlarge Either way it's going to make for a pretty negative look on the weekly charts - this will be the low settle for this move down and for a year.

Big Surprise

NOT. Not by the Fed. If only. There were rumors of course, setting the stage for the disappointment, and as it turns out, it was a perfect sell the news announcement. The Big Surprise seems to be handed to the oil specs... last Fri.s COT report shows specs added to net longs to 229,695  vs. 50, 148 short. Too bad.  Doesn't look that bad?  Put it in context..  This is a couple mo.s old but look at the explosion in spec longs mid 2010.....lots of liquidation to go. If you are a regular reader you know that this move down is no big surprise in fact it's exactly what was expected driven by the USD .

Crude Oil Big Picture

Since May 3rd post  Crude Trend Line  Crudewire has seen the likely price direction of WTI as moving significantly lower in an Elliott  C wave of at least Super Cycle degree.  Active Mo. Weekly click to enlarge  The evidence so far bears that out .  The move up off 32.40 to 114.87, has a distinct abc corrective look, and the labeling and Fibonacci relationships can be found at WTI Update from May 4. The move down from 114.87 has, at it's lows of 75.71, retraced 89% of the last "c" wave of B. That is too deep a retrace not to confirm that THAT structure is complete and there is an extreme likely hood of 70.76 eventually being overlapped as the C wave down continues. Note that there is a cluster of support around that 70.76 area: the C= .382 of A @ 70.88 ... A "C" wave that is .382 of the A wave would be very truncated and frankly unlikely. So it is likely that the support in the 7077 area will be taken out. As new lows are made under 70.76 attention will tur

In Case You Were Wondering

In today's Washington Post, an Op Ed by Bernie Sanders, Senator from Vermont;   What Wall Street doesn’t want us to know about oil prices Sanders objects to Wall Street holding the vast majority of the positions during the 2008 spike to 140 for WTI crude.  And the pertinent data refered to in the piece; Percentage of US oil market by type - NYMEX and OTC long and short positions combined (not net) Investment banks 54 pct Commodity trading houses 15 pct Hedge funds or investment houses 09 pct Producers 07 pct Oil major trading arms

Natural Gas- Seasonal Low ?

Could Natty finally be showing signs of life? Is there a hint of overcoming the relentless sideways action defining this market? I mean 79 of the last 81 weeks the front mo. has traded between 3.80 and 4.80..... There might be...first of all the recent low of 3.78 occurred on Aug. 30 ...right in line with the historic 20 yr. average seasonal low, of Aug.15. The avg. gain of the rally into the early winter seasonal high is 115%. Natural Gas pricing is highly weather sensitive, and is insulated from geopolitical and currency risk. So first of all the weather; NOAA Climate Prediction  Nov. Dec. Jan (made mid Aug.)  click to enlarge  Looks like a toss up. Gas in storage going into Winter is not overwhelming, and not causing panic as in years past when storage capacity was actually an issue. Compare current levels with 2 yrs ago. From Sept.9 EIA  click to enlarge From Baker Hughs Sept. 9 Rig Count;  Given the historic tendency to rally from Aug. 30 to Nov. 20, 115% (bas