Time to take a closer look at natural gas
Dec 09 natural gas opened last week at 45450 and closed the week at 43920. Looking at the daily and weekly charts below (both provided by www.pricecharts.com), you can see that the extremely profitable slide down natural gas took since Oct. 21, 2009 (high at 5989) is likely over. The clear Oct. 23-26 technical short set-up can be seen on the daily chart below as well as the weekly chart below. If you did not take advantage of this trade please email me at Gary@crbtrader.com with the subject line CRBWC and I will send you information on the CRB Winner’s Circle which is currently short Dec natural gas and has a profit of $4,320 as of this past Friday’s close. Stochastics show an extreme overbought condition and the MACD divergence is starting to weaken. This could turn out to be the time to change to the long side of this market. I would wait to see how the commercials posture themselves over the next week or so.
Interestingly, the old COT shows the Commercials are net long 127,635. The new COT does show something different. We see the Producers/Processors/Users “true commercials” net short at -11,074 and the Swap Dealers are net long at 138,709. The Managed Money group is net short at -134,674. To get a special report on the COT and how to use the new report please email me at Gary@crbtrader.com with New COT in the subject line.
Remember:
Rule number 1 – Know the trend, and never trade against it.
Rule number 2 – Never violate Rule number 1.
Hope your week is profitable.
Charts below provided by www.pricecharts.com. 30-day trial click here!
If You Trade The E-Mini Indices Then Click Here!
Take advantage of a free trial to what floor traders, institutions, and professional traders have been using for 20-years. Plus, get you hands on the new free book CRB’s 50-Rules of Trading!
The numbers below represent the Commercial Net Traders positions taken from the weekly Commitment of Traders (COT) report released by the Commodity Futures Trading Commission each Friday. You will find a 12-month high and low with the past 2 weeks of data. To see the past 52 weeks of commercial data please visit www.pricecharts.com. Simply open Analysis under the Resource category at the top of the screen and click on the Commercial Tracker on the left side selection menu. You will find this to be a very interesting presentation of the commercial COT information.
Commercial Net Tracker instructions
This form tracks the Commitment of Traders (COT) data for the commodity futures market. This form "looks" at the most recent five weeks of COT data and provides visual indications of the data. A. If the current value is at a 12-month low, the cell will display a red/burgundy background. B. If the current value is at a 12-month high, the cell will display a green background. C. If the current value went from net negative to net positive, the cell will display a blue background (indicating a bullish condition). D. If the current value is both a 12-month high and also went from a net negative to a net positive, the background will be green. You should view the data with green backgrounds to determine if they also went from net negative to net positive.
| Commodity | 12-mo low | 12-mo hi | 13-Nov | 6-Nov |
| Cattle (feed) | -3,350 | 5,139 | 2,045 | 2,491 |
| Cattle (live) | -9,974 | 30,346 | 187 | -1,128 |
| Hogs | -7,399 | 35,452 | 559 | 2,686 |
| Corn | -113,201 | 81,644 | -33,824 | -35,717 |
| Oats | -3,360 | 2,198 | -3,080 | -3,075 |
| Soybeans | -112,075 | 16,898 | -47,646 | -66,116 |
| Soybean meal | -82,472 | -1,533 | -38,414 | -43,964 |
| Soybean oil | -41,947 | 20,995 | -30,111 | -29,392 |
| Wheat | -1,318 | 57,345 | 38,840 | 36,197 |
| Orange juice | -17,748 | 1,627 | -14,585 | -14,081 |
| Coffee | -37,958 | 12,520 | -37,958 | -37,015 |
| Cocoa | -41,316 | -8,769 | -41,316 | -40,771 |
| Sugar | -249,405 | -72,825 | -181,146 | -201,472 |
| Cotton | -56,818 | 16,051 | -55,511 | -56,818 |
| British pound | -1,717 | 76,698 | 14,723 | 18,944 |
| Canada dollar | -67,971 | 20,555 | -40,341 | -40,867 |
| Euro FX | -75,540 | 23,652 | -44,121 | -41,703 |
| Japanese yen | -67,682 | 20,214 | -26,848 | -21,604 |
| Swiss franc | -37,877 | 22,561 | -36,245 | -28,396 |
| US dollar index | -19,645 | 14,351 | 5,846 | 5,513 |
| Mexican Peso | -73,827 | 21,127 | -42,116 | -61,576 |
| Australian dollar | -74,823 | 12,540 | -67,417 | -69,162 |
| S&P 500 | -100,460 | -23,326 | -61,998 | -57,961 |
| T-note -10 yr | -15,882 | 230,176 | 164,762 | 168,076 |
| T-bond -30 yr | 38,327 | 163,627 | 138,196 | 114,004 |
| Eurodollar | -971,110 | -222,700 | -798,392 | -707,201 |
| Crude oil | -116,119 | 7,089 | -111,071 | -116,119 |
| Heating oil | -68,934 | -4,419 | -56,715 | -63,850 |
| Unleaded gas | -82,087 | -26,770 | -69,042 | -74,964 |
| Natural gas | 71,144 | 134,072 | 127,635 | 128,837 |
| Copper | -10,861 | 29,085 | -10,804 | -10,861 |
| Gold | -297,493 | -71,116 | -282,784 | -283,852 |
| Platinum | -24,140 | -6,629 | -24,140 | -23,334 |
| Silver | -66,004 | -23,682 | -58,746 | -58,983 |
To view the entire year of commercial data please visit www.pricecharts.com.
Fundamental:
With what looks like the end of the unseasonably warm November weather in the north, demand for natural gas will be rising. The weekly natural gas storage report showed an injection of 25 bcf compared to expectations for a17 bcf gain. The storage gain was still below last year's build of 54 bcf and the five-year average gain of 30 bcf. Total storage stands at 3813 bcf, a new record high and 12% above the five-year average. Over the last four weeks, natural gas storage has increased 97 bcf.
Legend:
CC - consecutive closes
UTL - uptrend line
DTL - downtrend line
Charts provided by www.pricecharts.com
SPECIAL FREE BONUS:
Like me, I am sure you base most of your trading decisions on technical analysis, but don’t ignore fundamentals that can impact the markets. Government economic reports, news events, and weather, sometimes have a significant impact on markets, and you need to be aware of these factors. For the past 75 years professionals and institutions have relied on the CRB Futures Market Service for this vital information. With the 8-page newsletter, which is emailed each Thursday night, you also get the Futures Market Service Early Morning Update. The morning email will save you time by letting you know what happened overnight, and what to expect for the upcoming trading day. The morning email will let you know what reports to watch out for and a consensus in each report. As a reader you are entitled to a FREE trial to this service. CLICK HERE to take advantage of this offer and start putting the power or Commodity Research Bureau to work for you.
