Not much to add from weekend update. U.S. stocks are overdue for consolidation/correction but nothing too severe for now.
U.S. Dollar rose as we’re on a short-term buy signal while gold did come off after the weak close Friday. It needs to show strength and hold above $940 for the $1,000+ level to become a real target for 2009.
One could have expected more weakness in oil given the strength in the dollar and weakness in equities so I’m go to raise my DTO sell stop to 72.50.
With the weakness in gold, I think any new purchases in NDM should be at $6 or under and NSU $1.40 or under for now. No need to chase if gold is on the defense for the short-term.
Grandich clients KNP and TMM very active. I think KNP has seen large volume on the supposed takeover bid for Canadian Royalties. TMM has been very undervalued given production nearing and I think/hope the share price is finally catching up to fundamentals.
Special Note – People ask me what does it mean when we say Trinity Financial, Sports & Entertainment Management Company is a Christian-based company. Here’s an indication of what I mean:
Thanks Peter for the accurate weekend update.
Peter,
Thank you so much for your update, It is realy appreciated.
Specialy the oil part of it. I don’t want to sell but if I have to oh well its not the end. I have made money on all your recommendations so this is no big deal. Thanks Peter for your accurate and free update.
It needs to show strength and hold above $940 for the $1,000+ level to become a real target for 2009.
(PG)
So I guess David Morgan prediction (made on the Korelin Radio) that most likely we won’t get above $1,000 on POG in 2009 might turn out to be true
Here is another view of where a fellow named Rich Olney thinks crude prices are heading. I found this in cyberspace, but I am looking into what I think is a paid subscription blog for his insight. After reading it I thought it was well done and very insightful. Have a look. Good luck out there.
Ryan
Saturday, August 8, 2009
Weekend Summary 8/8/09 – Saturday
Crude oil finished up the week increasing 1.48 on the week to close at 70.93. The weekly high was 72.84 and the weekly low was 69.09. Volume was 328,670 contracts on Friday. The SnP was 23 points on the week to close at 1010.48. The dollar was up .68 on the week to close at 78.97. Natty finsished close to flat on the week and was up .05 on the week starting at 3.63 and closing at 3.68 which is nuts when you figure it made a weekly high of 4.16!
The second biggest story of last week was that NFP came in at -247k when experts were looking for 300 to 350k. Yes I did say the second biggest. US treasuries and the dollar rallied. Now why did the dollar rally? The dollar rallied in response to the rising yield on the treasuries. The dollar rallied because the BOE just announced a suprise injection of 50B pounds into their economy. The Dollar raillied because the Canadian jobs report came in 3x above expectations on Friday. The Dollar rallied because now that the US NFP report came in better than expected reducing QE is back on the table. The dollar rallied because sentiment on the dollar is at decade lows. For more thoughts on currencies see my previous post “Fridays Thoughts and Twitter.”
The biggest story last week that went virtually unreported was that the Baltic Dry Index crashed last week. It was down 17% on the week putting in its worst weekly performance in a year. The Chinese are slowing down on bringing in commodities. This is bearish for commodities and the AUD IMHO.
The commericals shorted all the oil that they could last week increasing their total net short position by 42%. Their net short position increased from -87,912M BBL to -126,246M BBL. This is the biggest weekly jump in net short position that I can remember. Thats a sell.
Technically crude can not break the previous highs that are at 73.xx. Crude is stalling out here in the low 70’s on this leg. Distribution all week long as crude traded sideways all week. Every time crude hit 72 the smart money was selling into strength. The close on Friday was ugly as Crude closed below its 60 min channel. Crude broke the bottom of the channel 3 times this with the 3rd break a close below the channel. Three strikes your out.
The market has turned ST bearish on crude. It does not matter which oil expert is on TV, they are all saying the same thing that oil is going to correct. The BDI index, the gauge for China commodity demand crashed last week. The commercials really loaded up on the short side last week. The dollar started a multi day rally last week as well. We get the FED Mtg this week and all eyes will on any hints to a change in QE policy. We also get the Euro GDP this week and and experts are looking for -.5%. Any deviation from that expectation and currencies will respond accordingly. The odds are stacked against crude here. This leads me to a bearish trading bias next week.
As for Natty, temperatures are warming up which should be supportive to price. However the Atlantic is quite no storm activity. The weekly injections are above normal for this time of year and there is talk of Natty running out of underground storage if the weekly injections continue at the current pace. At least Natty is going to make an all time record for total Natty inventory. The rig count is at 681 thats up 16 righs since July 17th per Reuters. If crude corrects here, like I think it will, Natty is going to make new lows for the year which could result in a 2 handle!
Please explain what you’re trying to imply Chris.
Ryan,
Excellent report. There is a story I was reading early this morning which i posted it on the Update blog, that says China is heading for a market bubble real soon.
does anybody know why brent is trading a healthy premium to wti ?
Hey Pete where are all those know nothings who were all over this blog beating their puny chests about how oil was going to fly and how wrong you were. They seem to have gone quiet lately-LOL!
scott
http://watch.bnn.ca/market-morning/august-2009/market-morning-august-10-2009/#clip201865
CXX has jumped today (10% so far) with the markets down in general. Can we finally say goodbye to a sp below $.20 for good. With the resource estimate NI 43-101 results for their Bootheel Property due out any day now, I think those with shares already, will be holding. That means those that want in for the ride, now have to pay. Here’s to Crosshair’s sp hopefully not having to be under $.20 any longer. Bring on $.30, and then we can go from there. GO CXX!!!!
Ryan
Gold – Central Banks in Europe Strike Deal on Gold Sales
Yesterday, Monday 8/10, there was an article in the Wall Street Journal with the caption above. The article pointed out that a new agreement was put in place that “surprised the market by imposing a stricter limit on sales even while it allows the IMF to join.” A previous pact which limited sales to 500 metric tons for 5 years expires in Sept. and the new agreement drops that to 400 tons. “Analyts said the lower ceiling on gold sales was a belated recognition that central banks have become less willing to sell reserves, reflecting a change in thinking at central banks at a time when the dollar is in decline and inflation worries are widespread.” The article goes on to state that the new agreement provides certainty to the market that none of the European central banks will flood the market to take advantage of high prices. This lower ceiling suggests gold is regaining its former status as a monetary asset.
COVER YOUR OIL SHORT OR YOU’RE TOAST !
Any mining companies you like Mr Pocus?