Posts Tagged ‘Futures Contracts’
Reading the Future in a Barrel of Oil: Part II
One of the most trustworthy signs of a healthy economy is in its consumption level of energy. This is represented by the Chart below that points out the amount of imported oil that the United States consumes yearly over the last 36 years.
This is the way the Chart looks:
The production in the US is situated in a descending trend since the 1970′s. Therefore, the imports into the US constitute the true index to real growth. Indeed, since the start of the 1980′s the importing of Crude Oil has been growing relentlessly until 2006 when the upward trend stoppeed. Since then the new downward descent that started has just gained momentum. This is not the correct picture of a growing economy.
Nevertheless, the price of the Crude Oil is now in the area of $70.00 and has hit a major Daily Chart bottom and a strong historic Weekly Chart support line. Despite the recent fall in Light Crude prices (CL Futures), the long-term Monthly Chart upward trend pattern remains intact. Indeed, the reason for the continued rising of Crude Light (or Peak Oil) prices lies in the continued growing consumption of Oil by developing nations such as China and India. They account for most of the current daily demand for Oil and are increasing consumption, using it for industry and transportation, among other reasons. The average Indian and Chinese citizen needs nowadays products and services related to Crude Oil, in so many categories and to such an extent that was not dreamt about a decade ago.
We will now show the Daily and Monthly Charts for Crude Light Futures to prove to our readers that they are indeed on a major upwards trend that is not ending soon. In our next installment, we intend to show why the US consumption has started to wane. And, what effect the upwards climbing Crude Light and Heavy Crude Oil prices are having on the US economy in particular.
This is the way the Daily Chart looks:
This is the way the Weekly Chart looks:
This is the way the Monthly Chart looks:
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Triangles, Flags, Fans and Pennants
This is a kind of a short-worded article. Even though I truly enjoy writing, I have to stop here and let the Charts speak for themselves. In a previous post I showed a recent symmetric triangle that the S&P 500 took. Below you see a similar triangle, this time Cattle Feed Futures from the Chicago Mercantile Exchange, the C.M.E. After you will see an example of an upwards-pointed triangle, also from the C.M.E Cattle Feed Charts. Then you see the downwards pointed triangle, this time–yes its the C.M.E again, but Orange Juice Futures instead.
The Flags in the 4th Chart are the present of System Flash Disk Pioneers, the Intra-day Chart from sometime in 2004, in the 60 minute time-frames. All about time frames in a future lesson, there are a few things to make clear about them and I’ll save them for the near future. Last is a nice, colorful chart from about 3 weeks ago showing the USO, or US Oil Fund, an equity E.T.F shown here both at the daily (left) and weekly (right) charts. It shows a Fan sloping outwards as fans tend to do.
Don’t worry, the explanation of dealing with all theses object of art, and truly Technical Analysis is also an art form besides being a Science, is forthcoming. By dealing with I only mean one thing, trading based on them; or rather their breakout periods and how also to determine breakout. Meanwhile, enjoy the art show and try to see what conclusions you can draw yourselves from what you see. This is truly a homework lesson, so take it seriously!.
These are, in order:
This is the way a Symmetric Triangle looks
This is the way an upwards-pointed triangle looks:
This is the way a downwards pointed Triangle looks
This is the way flags look, the pole being an extremely long Candle:
This is the way another type of symmetric triangle looks–long and thin:
This is the way Fans look, check the large one on the right side.
Like I wrote before, there is more to be said about trading using these patterns and I intend to say a lot more in future Tutorials.
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Futures signal the way for the U.S Markets
I know very well that the situation looks grim for the U.S. economy. The defaults on Mortgages are way up, an extremely high jobless rate that doesn’t seem to want to go down at all, the worries of financial experts that the health-care bill recently passed by Congress will WEIGH on the deficit instead of decreasing it, and a general feeling that we may be headed into a double-dip as far as the financial markets and the whole U.S. is concerned.
I think we are being presumptuous in saying that the economy is headed down again. I give as my proof, as usual the Technical Analysis that can be made on the market, and what we can derive as a conclusion from it.
Take the futures on the 3 indices of Wall Street. They show some weakness, especially the Dow futures which has broken the upcycle trend line. But the others though a little bit closer to the line are still on the way up, and the Dow itself is on a parallel to its trend routs upwards.
I think the situation is in control. From a technical point, the S & P 500 just did a beautiful-looking retest on the 1166 line and the futures as I write these lines give it a thumbs up. I think that the general and specific trend for America is upwards. Just check out the Futures Charts below:
This is the way the Chart of the Dow Jones Futures looks:
This is the way the NASDAQ 100 Futures Contracts index looks:
This is the way the S&P 500 Futures look:
