We've asked Michael Seery of SEERYFUTURES.COM to give our INO readers a weekly recap of the Futures market. He has been a Senior Analyst for close to 15 years and has extensive knowledge of all of the commodity and option markets.
Michael frequently appears on multiple business networks including Bloomberg news, Fox Business, CNBC Worldwide, CNN Business, and Bloomberg TV. He is also a guest on First Business, which is a national and internationally syndicated business show.
Crude Oil Futures
Crude oil futures in the April contract settled last Friday in New York at 35.92 while currently trading at 38.90 a barrel up around $3 for the trading week continuing its bullish momentum as prices have now hit a 9 week high. Crude is trading above its 20 day but right at its 100 day moving average as the trend is still relatively mixed in my opinion as the commodity markets in general have all bottomed out as volatility certainly has come back into the currency market pushing the commodity markets like a yo-yo in recent weeks. Continue reading "Weekly Futures Recap With Mike Seery"→
Natural gas futures on Friday dropped below $3 for the first time since September 2012, on an intraday basis. December is now on track for the dubious distinction of producing natty’s largest one-month drop since 2008 – currently about a 26% month-to-date (MTD) decline – as producers continue churning out the commodity even while mild weather has resulted in below-normal consumption.
Crude oil, by comparison, has declined about 17% in December (MTD).
Natural gas and crude oil prices have taken turns out-dropping each other over the past 6 months. This simple graph (and accompanying chart) shows how oil and gas have crashed both together and separately for the last 6 months. What do I mean by that? Both have nosedived, but with 5 distinct periods of divergence (highlighted in blue when oil is outperforming, and highlighted in red when gas is outperforming). See for yourself:
Oil & gas have crashed “together” for 3 of the 8 periods, for a total of 45 trading days in which gas has generally declined more than oil.
Oil has “diverged” to the upside in 2 periods (highlighted in blue), for a total of 12 trading days.
Gas has “diverged” to the upside in 3 periods (highlighted in red), for a total of 74 trading days.
Actually, at its recent peak on Nov. 20th, natural gas prices were only a few pennies below their June 20th level; so effectively all of natty’s 2014 crash has occurred in just over 23 trading days since just before Thanksgiving.
Each Week Longleaftrading.com will be providing us a chart of the week as analyzed by a member of their team. We hope that you enjoy and learn from this new feature.
To start the week, we will be watching Natural Gas futures closely. July Natural Gas saw a spike higher overnight to $4.89, but gave back those gains in the early morning hours. There is a measure of support in the market as Russia has halted Natural Gas flows to the Ukraine. Along with halted Natural Gas flows to the Uklraine, the US Natural Gas storage remains tight and sits well below the 5 year average. With a warmer weather outlook across the US, the case can be made for a bullish week in Natural Gas.
On the technical side, Natural Gas has sold off to a critical area of support at $4.70. This bullish trend-line was broken in mid-May and since become resistance in the market. After last week’s EIA inventory report on Thursday morning, the market spiked back above this trend-line with closes above it on both Thursday and Friday. In today’s session, Continue reading "Chart of The Week - Natural Gas"→
A rising tide doesn't always lift all boats. The major stock indexes are up 10% or more this year, but as I recently noted, it has been a brutal few months for commodities. But at the time, I saw a small silver lining.
"These are the kinds of commodities you need to keep tracking, because lower prices counterintuitively set the stage for the next bull market in commodities," I wrote, citing iron ore as an example. However, I overlooked an even more glaring example of how slumping commodity prices can impair production, which leads to an eventual pricing rebound.
I'm talking about natural gas, which has been on fire in the past year.