Energies & Metals Review on Jan 25th
Energies are once again coming off as Crude Oil is below the key $87 level in the March contract as both the DOW and S&P were down this morning. Many traders are getting the feeling that Cushing is filled to capacity right now and this is why you are seeing the flatprice come off as well as the wti spreads liquidate and the arbs head much lower. The March/April spread is now trading at -175 and going lower and the March arb is getting closer to the -10.00 level trading -9.00 right now. The next level of support on the downside is likely $82.00 and with the trend breaking lower this can very well be obtained in the next few weeks, in my opinion. OPEC finally may be realizing that a supply cut is in need after numerous meetings of keeping production level right now. The Heat and Gas cracks continue to rise as well with the Heating Oil prices decreasing at a lower rate than the Crude oil price. Keep in mind that when February went off the board the Feb Heat crack was over $20.00. S&P/Case Schiller home prices declined again here this morning and this is another reason as to why the market is selling off. Look for Crude to stay below $87.50 this morning as the huge support of $87.00 has now been broken.
- Daniel Cronin, Energies Guru
Precious metals liquidating this morning as Gold is down $14 to $1,326 and Silver for March delivery fell as much as -2.8 % to $26.56 an ounce, the lowest price since Nov. 29, and was last at $26.62. The metal is down 14 percent this month after jumping 84 percent in 2010. Palladium for March delivery was 4.2 percent lower at $782.50 an ounce after last week reaching $829.85, the highest level in almost 10 years. Platinum for April delivery dropped 1.8 percent to $1,787.70 an ounce. It reached $1,851.10 last week, the highest price since July 2008. (1) Gold has traded right at the huge support of $1,320 today and bounced back to $1,326 but there is still a very good amount of pressure on this today and I believe once this is broken Gold can quickly go below $1,300. The sentiment is bearish short term on this metal and as the USD keeps moving higher these metals are forced lower this morning. Copper is getting beaten down a bit almost down 10 cents this morning to below $4.27 with the base metal following the equity markets right now. Look for $4.22 to be great support this morning but there looks to be some profit taking coming out in all commodities today so I wouldn't be surprised if the market hits this number today.
Daniel Cronin, Metals Guru