Updating Crude

The crude oil chart has my attention this morning. You may recall that I wrote this last Wednesday:

"Now let's look at crude. I had hoped for a quick bounceback to above $96 but I don't think we're going to get it. Monday's rally appears now to be just a snap back from oversold conditions. Watch the $93 level very closely today and tomorrow as a downward breach of that level would confirm that a test of the lows of last Friday are in the offing. At this point, I'm expecting new lows near or just below $90. Then, another rally back up toward $93. A retest of the $91.50 level would then give us a reverse H&S bottom from which crude might finally mount a successful rally back above $96 and toward $100. This whole process could easily take the entire month of July to play out so don't get impatient and move too soon."

OK, now take a look at this 2-hour chart:

paper_6-29amoil.jpg

Again, don't get impatient and act prematurely. Let this play out. IF crude can form a reverse H&S and IF it then moves back through $96, THEN it will be time to get interested.

I'm also getting a lot of questions about the S&P. If you believe as I do that The Fed takes an active interest in suppressing the prices of gold and silver, then you must also believe that The Fed takes and even more active interest in levitating the equity markets. Remember, it's all about the management of perceptions now as they desperately try to coax some growth and some time out of the system. I learned my lesson trying to short the S&P last year. Of course the fundamentals are terrible! Who cares?? As long as the Primary Dealers are in the arena buying up ES contracts for the Fed, the market will continue to magically float along. Now, if/when the entire world melts down, the momentum will be such that this scheme will get overrun and down will go the stock market. We'll know when that is happening by looking at the charts. A look this morning shows that it's not happening right now...at least not yet.

paper_6-29ames.jpg

The PMs are both up a little this morning but do not merit discussion at this time. Gold above 1506 is nice. That price indicates a move to 1515. It has already been to 1511 today, so, big deal. More later, after the close. TF

95 Comments

SilverTree's picture

SPR

magis00's picture

Bastiges!!!

Yep.  Bastiges.  Set those PMs free, you bastards.

tmosley's picture

Let's see how many people

Let's see how many people stand for delivery on the COMEX tomorrow.  That number will indicate the budget of the fireworks show we will see over the next month.

Warren Peace's picture

Supply and demand

Even with a paper currency backed by nothing but dreams and promises, doesn't supply and demand eventually assert itself? I think we are currently getting the answer to that. If only I had a chart on silver use that shows how it is being used out of existence, making it more precious than gold........

SilverWealth's picture

selling

Selling Crude and some gold stocks into this bounce now. Selling some grain. Everything was on sale 2 days ago so now its time to sell a bit. I don't know where price is going in any of this but though its painful and difficult to buy the sales when they happen,  its equally enjoyable to sell when they go off sale. 

I know this isn't a very popular method but its the best I can do. Its a time of extreme crisis with big price swings. I am not good enough to try and chart my way thru all of it. That are certainly those that are but not me.

¤'s picture

POSX violent spasm

http://www.marketwatch.com/investing/index/DXY

Check out the price movement just before 9:00 a.m. and the reversal and trending after. What extraordinary FX intervention took place or was that a result of the Greece austerity vote? The markets are full of hiccups and burping  today.

Last day of the month and the first two are usually the most volatile if recent trends hold true. This month and next look no different. Throw in the supposed "end" of QE2 in 1 day and the Greek vote today and it should get real interesting.

The markets are so manipulated and HFT Algo influenced that you have to wonder if the markets would have noticed a meteor hitting the earth or just kept rising regardless.

The S&P and markets at large are so messed up they would just say it (meteor strike) was already priced into the future.

~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

In case no one heard it mentioned anywhere, a meteor the size of a house passed with 7,500 miles of Earth 2-3 days ago. Low enough and close enough to be below some of our satellite umbrella. That's friggin' close, and I wonder how the market would have reacted. Thank God we didn't find out. It seemed like for awhile the market would just go up no matter what.

Seriously, if a massive Japanese earthquake and tsunami and massive radiation leak (still ongoing and wayyy worse then reported or known about) happened to the worlds 3 or 4th largest economy and basically our markets shrug it off within 2-3 weeks then a small meteor striking the earth might be yawned about within a month.

Things seem that messed up.

kliguy38's picture

All of you need to be aware

All of you need to be aware of whether your trading accounts have their cash money markets as PRIME or Treasury backed. IF they are PRIME backed money markets then you have risk if liquidity takes a hit.....I think this will force Ben to pump in the next QE trick and I think it will have to happen within the next month. This is unfolding very rapidly. Keep cash on hand and of course physical. As I've said before ben will act to prevent this......BUT....just in case prepare now and do your homework on your trading accts. In a year after the various monetizations have failed then the real SHTF begins.......no paper fiat is safe then......

SilverTree's picture

  Plunge Protection?

 

Plunge Protection?

lostinspace's picture

Fed

The Fed takes an active interest in suppressing the prices of gold and silver, then you must also believe that The Fed takes and even more active interest in levitating the equity markets.

That there sounds like one of dem conspiracy theories.  That May 1 beatdown was just a product of a PM bubble popping, there is no EE or PM manipulation, silver only costs $5 to dig up... blah blah blah blah.

100 years of oppression is enough already. Hang the banksters high, and burn the Fed to the ground!

Guillotines Bitchez!

silver_hunter's picture

PM stocks

when FED lifts equity market, it will also lift PM stocks as well, at least it does not hurt. :-) Unintended consequence.

SilverWealth's picture

question

Will there emerge from this crisis Bankster-Hunters as there emerged Nazi-Hunters from WWII?

Banksters will attempt to squirrel all their stolen loot away to places like Switzerland and faraway islands.  They may attempt to assume new identities if things really do breakdown. This is what I read on the Net.  And history would seem to bear it out.

Eric Original's picture

Good news out of U.S. Gold (UXG) today

Looks like Rob McEwen's UXG is expanding the size and grade of it's open pit project at El Gallo.

http://www.usgold.com/news/pdf/20110629_pmx/20110629_pmx.pdf

Warren Peace's picture

Best Guess

 

Comex open interest trend:

Thursday July 23.......28,500 (approx)

Friday July 24.......... 26,500 (approx)

Monday July 27........19,500 (approx)

Tuesday July 28........13,500 (best guess)???

Wednesday July 29....10,500(best guess)???

Thursday July 30.......8,500(best guess)???

How many contracts will take physical out of the registered warehouses? If history is any indication, then not many. How many contracts will have to be delivered with SLV shares? Can the market continue under this level of fraud? 50/50 here in July. 40/60 in September.

Comex default should be a sure bet by the end of the year...... Just date options out to next year...... piece of cake!

Goofy's picture

Volatility works great! Look

Volatility works great! Look here at the EUR/USD pair, hehe sic all the gains for all players of the Greek positive vote today here in Europe with tight stops were perfectly blown away by the bankster scalpers.......

Larry's picture

Falling Meteors?

DPH said, "...a meteor the size of a house passed with 7,500 miles of Earth 2-3 days ago."

Probably worth about half of the house-sized meteor that passed by back in 2007. 

¤'s picture

Current Crude Price Sharply Higher

http://www.marketwatch.com/investing/future/crude%20oil%20-%20electronic

If you thought the POSX chart was volatile. So much for that U.S./IEA oil bailout.

What other level of desperation might they attempt to put this weeks oil fire out again.

Maybe the Fed/White House want the market volatility and speculation inspite of saying the exact opposite? Why would that be?

How will OPEC react to any verbal hints by the IEA that more oil QE is possible?

humahuaca's picture

I took a small short in oil here

I just like $95 as a nice round number to provide some resistance. I'm not wildly confident, but I made a lot on buying some cheap canadian dollars so I am taking a flyer.

Otherwise I am staying out. I have about 99% cash, USD, right now.

Might buy SDS at some point, if it gets much lower.

¤'s picture

Pretty friggin' funny...

@ Larry

      ...and a sign of the times. Very quick and accurate wit on your partlaugh

Seacap81's picture

For those keeping score at

For those keeping score at home, note the recent dollar rally failed once again at a lower high.

Eric Original's picture

Go Oil Go!   sorry, huma

Go Oil Go!

sorry, huma

Eric Original's picture

Gold is my hero.  1512  

Gold is my hero.  1512    :D

agNau's picture

Just the beginning for Euro, and look at response.

http://www.zerohedge.com/article/greek-ministry-finance-now-burning

What a surprise.
Remember......Contagion/Confidence ....... loss of control.

Eric Original's picture

Miners are Smokin!

GDXJ knockin on the door of my favorite $34.  Can't keep the miners down anymore.

¤'s picture

SDS/Stay Away IMHO

I would stay away from SDS IMHO.

I just took a beating figuring the same thing your thinking about (hedging the overall S&P)and it didn't work out well at all. The market fizzed away and periodically semi-tanked this past month or so and the options just don't react the way you might think. I read somewhere about how certain options were not following their normal behavior during  volatile trading etc. and they didn't react nor perform the way they have previously under certain pricing and market conditions. Gold Corp. GG  and Silver Wheaton SLW and USO were the others mentioned.

Guess who has all 4 call options currently underwater???  Glug, glug.

Actually, SDS expired worthless and hardly reacted to any market movements except upwards price movements, of course. I've been observing and watching those 4 for quite some time and just like the markets on the whole, they have been suppressed or tampered with by the PM and Crude oil price action. SDS and some of these ETF's are bait for a trap that never really springs. I thought it was just me not looking at the situation correcttly and missing something.  I noticed the share price action and the option price divergence and thought it looked "not right" and off-pattern. I'm glad I happened upon the article confirming my suspicions.

This market sucks! It's no longer really about trading on fundamentals but instead speculating on where you think it should be or where it might be going based on the anticipated level of manipulation due to Govt./Banking desperation.  

It is entirely possible of course that you buy SDS and the market takes a sharp swing and it does exhibit some logical corresponding price movement but I wouldn't bet any money on it. Not anymore.

stoneeh's picture

New OI lows for silver for

New OI lows for silver for the year. 114k contracts vs 123k in January at 26,5$ at the original Turd's Bottom. With a lot lower commercial net short position too.

Well I should buy more here, but since I have have no other money coming in for a while, I have to lay low and stick with what I've got. But this is now nearly as good an opportunity as around the lows, 10$, of spring 09.

- Markus

Shill's picture

  Piece of shit....so glad I

Piece of shit....so glad I am long shiny stuff.

Eric Original's picture

Buy Darden Restaurants DRI

My son and I are heading out to Red Lobster shortly to pig out on shrimp.  We're pretty big eaters, so just tipping you off that DRI will be coming out with big numbers soon!  LOL

Xeno's picture

@ Silverwealth

"Will there emerge from this crisis Bankster-Hunters as there emerged Nazi-Hunters from WWII?

Banksters will attempt to squirrel all their stolen loot away to places like Switzerland and faraway islands. They may attempt to assume new identities if things really do breakdown. This is what I read on the Net. And history would seem to bear it out."

To paraphrase our favorite Lt. Aldo Raine "We're in the business of killing banksters, and business is ahhhhh booooooomin'"

BTFD and quit pussy footing around!

Eric Original's picture

Obama just called a snap news

Obama just called a snap news conference.   Supposedly about economy and debt limit negotiations.  Stay tuned.

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