This Morning’s Market Charts

On January 8, 2013 by TradingDesk
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CLICK HERE for a PDF of this morning’s charts

This Morning’s Market Charts

On January 7, 2013 by TradingDesk
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CLICK HERE for a PDF of this morning’s charts

DOE Report Expected to Reveal Large Drawdown in Crude As Imports Held Off

On January 4, 2013 by TradingDesk
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Markets were surprised Thursday afternoon by the minutes of the most recent FOMC meeting – in which the Fed announced its 4th round of quantitative easing – that most of the members anticipated an end to the asset purchases this year. Many commodities, which have been continuously buoyed by the FED’s money printing liquidity injections over the past four years, began selling off immediately, and have continued to do so overnight. Gold has suffered the most, trading nearly 4% lower on the news, while energy commodities have merely wiped out their gains for the week.

Today’s DOE report is expected to show a large drawdown in crude stocks, as imports were held off to avoid being taxed at year-end, but if last night’s API report is any indication, product demand in the US remains quite weak, and supplies of refined fuels should build across the board. RBOB and HO are currently testing important short-term technical support levels, if we break down further today, charts suggest another 10 cents of losses very soon.

The Jobs report this morning was very near expectations and has done little to sway markets. With the FED signaling that their economic accommodations may be coming to an end, even more pressure will be placed on congress to do something significant in the next two months to avoid another debt ceiling battle and its repercussions.

 CLICK HERE for a PDF of this morning’s charts

After 2-Day Euphoria, Heating Oil Leads Energy Futures Lower

On January 3, 2013 by TradingDesk
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Following the largest two-day rally in over a year, US stock markets are cooling their heels this morning, as euphoria over the latest piece of legislation fades and concerns over the next debt ceiling battle in February begin to grow. Heating Oil is leading US energy futures lower, following the lead of European products which are following the lead of a slumping EUR/USD. RBOB is flat in nearby trading months, as news that the Trainer PA refinery (owned by Monroe energy aka Delta airlines) was forced to shut its FCC unit yesterday, adding yet another complication to the tight PADD 1 gasoline market.

As we enter the weakest demand period for gasoline in the US, Midwest gasoline prices have dropped 25-40 cents below the prices in the Gulf Coast and New York Harbor respectively. With crack spreads remaining at or near record levels for refiners with access to land-locked crude, PADD 2 production is running at more than 94% of capacity at a time when most plants slow down. With the Mississippi river at record low levels limiting barge movements, and most rail cars already tied up hauling crude around the country, it will be an interesting race over the next few months to see if creative haulers can find a way to get the gas from where it is, to where it needs to be.

CLICK HERE for a PDF of this morning’s charts

 

Energy and Equity Markets Bullish After Lawmakers Cut Deal

On January 2, 2013 by TradingDesk
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US stocks had their best year-end trading session in nearly 40 years Monday, as it became likely that lawmakers would reach a deal to prevent some of the automatic tax increases and austerity measures scheduled to take place Jan. 1. A deal was passed by the senate Monday night, and by the House of Representatives yesterday, and is expected to be signed into law today. The move delays the automatic spending cuts for 2 months, while extending some previous tax breaks that were set to expire.

Most notably for energy markets, the $1/gallon biodiesel tax credit & $30,000/location alternative fuel refueling credits were retroactively extended from 1/1/2012 through 12/31/2013, and the 50% bonus depreciation of new assets was extended for 1 year. More detail on the deal can be found here:

http://thomas.loc.gov/cgi-bin/query/R?r112:FLD001:S58584-S58586

Although in many areas this deal is simply a delay rather than a fix, markets seem pleased at the moment and 2013 is off to a bullish start for both stocks and commodities. RBOB and HO are both testing the upper ends of their winter trading ranges. A breakout here may signal an early start to the spring rally, just as we saw a year ago, when RBOB rallied nearly $1/gallon and HO gained $.50.

CLICK HERE for a PDF of this morning’s charts

 

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