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  Thursday, 4 Apr 2013 | 5:17 PM ET

Crude Hits Low, but Still Not Buying Opportunity

Posted By: Drew Sandholm

U.S. crude oil has fell roughly 4 percent in the last two days, its worst two-day drop since October 2012, following poor employment data and as U.S.-North Korea tensions continue to rise.

Initial jobless claims rose to the highest level in four months last week, a third straight rise, indicating that the labor market recovery in the world's largest oil consumer slowed in March. Meanwhile, North Korea warned that its military has been cleared to wage an attack on the U.S. using "smaller, lighter and diversified nuclear" weapons.

Light, sweet crude for May delivery was down $1.30 at $93.14 a barrel, having fallen to $92.12, the lowest intraday price since March. Brent crude futures were down $1.25 to $105.86 a barrel, having earlier touched a low of $105.29, the lowest since early November.

(Read More: Brent Bounces Off Five Month Low After US Data)

Still, professional trader Jim Iuorio isn't ready to call it a buying opportunity.

»Read more
  Thursday, 4 Apr 2013 | 4:20 PM ET

Why the Gold Trade Is Getting Murdered

Posted By: Drew Sandholm

After gold dropped to a 10-month low of $1,539.74 an ounce on Thursday, breaching a key technical level of $1,550, professional traders disagreed on how to trade it but came to a consensus on what's pushing it lower: U.S. dollar strength, thanks to money-printing by central banks around the world.

The dollar rose strongly against the Japanese yen on Thursday after the Bank of Japan announced aggressive measures to ease monetary policy, including a plan to double its holdings of bonds and stocks in two years. The yen fell as much as 2.9 percent versus the dollar, its largest one-day drop since Oct. 31, 2011 when it fell as much as 4.78 percent.

(Read More: Gold Ends Lower Despite Stimulus Hopes)

"We're in this mode where any sort of dollar strength—doesn't depend on why it's dollar strength—causes people to sell out of their long-term bullish positions," said pro trader Jim Iuorio from the Chicago Mercantile Exchange. "We were looking for what happened to the Japanese yen to happen, so I do think there is a bounce coming up relatively quickly in the short end."

Iuorio remains long gold, adding that he plans to buy the June gold futures contract at $1,548 with a target of $1,575 and a stop of $1,537.

»Read more
  Thursday, 4 Apr 2013 | 12:27 PM ET

Is the Top in for Crude?

58465797
Getty Images

Crude oil prices fell on Thursday after an increase in new U.S. claims for unemployment benefits reinforced concerns about sputtering economic growth in the top global oil consumer.

U.S. initial jobless claims rose to its highest level in four months last week, a third consecutive rise, suggesting the labor market recovery lost some steam in March.

Initial claims for state unemployment benefits increased 28,000 to a seasonally adjusted 385,000, the highest since November, the Labor Department said on Thursday.

"The jobless claims added to the pressure after the Bank of Japan's decision to pump money created a big rally in the dollar and U.S. debt in a safe-haven play," said Phil Flynn, analyst at Price Futures Group in Chicago.

The Bank of Japan on Thursday said it would inject about $1.4 trillion into the economy in less than two years, pushing the dollar up sharply versus the yen as U.S. Treasury debt prices also advanced.

Brent crude futures crude fell $1.16 to $105.95 a barrel, having fallen to a 2013 low at $105.73..

U.S. light, sweet crude was down $1.47 at $92.98 a barrel, having fallen to $92.56, the lowest intraday price since March.

»Read more
  Thursday, 4 Apr 2013 | 11:07 AM ET

Here's Your Chance to Sell Crude

Posted By: Rich Ilczyszyn
Rich Ilczyszyn: Levels to Watch On Crude
Rosanne Olson | The Image Bank | Getty Images

Those looking to sell crude oil might soon get their chance.

Black gold tumbled on Wednesday, as it followed weakness in the equity market. Fundamentally speaking, crude's rally was overdone and was largely caused by short covering. On the long side, profits were taken once crude hit the $97.80 target.

(Poll: Is the Top in for Crude?)

Over the previous two sessions leading up to Wednesday, the market had tested the $95.90 and was able to hold that level. It gave hold on its third test, though, following the recent release of poor employment and manufacturing data, as well as government report that showed a build in inventories. The next major support at $95.55 did not hold and a retracement level at $94.75 also gave way. The market was able to slow down at $94.45 — the 50 percent retracement level on the way up.

We expect a consolidation day, as the equity market has bounced. Crude, though, will see pressure and will find it difficult to track equities when we have a U.S. dollar that is currently making new swing highs. Look for resistance against the $94.84 retracement level as a selling opportunity. At this time, only a close back above $95.55 or better yet, $95.90, will neutralize the sell-off.

(Read More: Oil Gives Up Gains after Dour US Data)

Realistically, the next down swing should test the $93.41 to $93.66 consolidation level that we saw before last week's rally. Below there, the next support sits at roughly $92.50.

Read on for 10 Things You Need to Know to Trade Futures

»Read more
  Wednesday, 3 Apr 2013 | 2:08 PM ET

Drivers, Rejoice! Expect Big Drop in Gas Prices

Posted By: Drew Sandholm

Drivers can expect "significantly lower" gasoline prices this summer, but only if gas futures drop below the key level of $2.90 a gallon, professional trader Jim Iuorio told CNBC on Wednesday.

Chalk up the decline in gas prices to a divergence between gas and crude oil, Iuorio explained. Over the past month, gas has dropped some 5 percent, while crude oil has gained about 5 percent. In January, gasoline prices skyrocketed following an array of refining and maintenance issues while the price of oil fell. The move was highly unusual, so now the markets are seeing what's called a mean reversion, meaning prices are returning to the mean or average.

In addition, a government report said U.S. crude oil inventories grew to their highest level since 1990. The U.S. Energy Information Administration reported crude stocks rose 2.71 million barrels last week. The rise was slightly more than the build of 2.2 million barrels expected in a Reuters survey of analysts and put U.S. commercial inventories at 388.62 million barrels, the most since 1990 and close to the record 391.9 million barrels reached in 1982, the year the EIA started tracking inventories.

»Read more
  Wednesday, 3 Apr 2013 | 11:02 AM ET

What Could Send Gold Into a 'Major Tailspin'

Posted By: Rich Ilczyszyn
Gold
Getty Images

The price of gold has struggled to get going lately, having suffered two back-to-back quarters of losses, but the technicals now suggest that the precious metal could be sent into a major tailspin.

The yellow metal broke major support below the $1,590.4 level on Tuesday, and in doing so, traded to a low of $1,574 an ounce. With the momentum completely to the downside, Tuesday night's session opened up with the market trading lower and reaching a low of our $1,563.1 (our target) before consolidating and settling back towards $1,570.

(Read More: Gold Slides as Haven Appeal Dissipates)

Lately, the price of gold has been influence by any number of factors, including geopolitical events, monetary policy on the part of central banks around the world and more.

Early in Tuesday's session, gold struggled to hold the $1,600 level, but European economic data came in worse than expected, the U.S. dollar index traded higher.

»Read more
  Tuesday, 2 Apr 2013 | 5:26 PM ET

Why Gold Has Lost Its Luster (For Now)

Posted By: Drew Sandholm

The gold rally might be over, at least in the short-term, some professional traders told CNBC on Tuesday.

Gold has suffered two consecutive quarters of losses and it appears the second quarter isn't getting off to a good start either, as the precious metal fell 1.5 percent on Tuesday, its biggest one-day drop in more than a month. The second quarter, by the way, began on Monday.

(Read More: Gold Settles Lower on Wall Street Gains)

From the Chicago Mercantile Exchange, pro trader Jim Iuorio pointed to currencies as a major reason gold could continue to fall.

"If the yen is going to continue lower and there's no reason to buy the euro right now, that means dollar strength," said Iuorio. "Our economy is comparatively the best ship in the harbor right now. So if people buy the dollar, gold is going to go down."

»Read more
  Tuesday, 2 Apr 2013 | 4:34 PM ET

Pro Rings the Death Knell for Crude Oil Rally

Posted By: Drew Sandholm

The days of triple-digit prices for U.S. crude are "numbered" as the "crazy bull market" for oil continues to run out of gas, argued Citigroup analyst Seth Kleinman on Tuesday, even as West Texas Intermediate traded near its one-month high of $97 a barrel.

WTI shook off early weakness but still lost 13 cents to trade below $97 a barrel, while Brent crude for May delivery slid 70 cents to $110.38 a barrel. U.S. gasoline futures posted the biggest percentage drop in the oil futures complex, pushing below the 50-day moving average of $3.0477 a gallon, a technical level closely monitored by chart watching traders and analysts.

(Read More: Oil Loses Steam Even as Stocks Rally)

Kleinman, though, sees several reasons why crude oil could continue to fall in the near future.

»Read more
  Tuesday, 2 Apr 2013 | 2:44 PM ET

'Dr. Copper' Botches His Prognosis for the Metal?

Posted By: Alex Rosenberg

Over the past month and a half, many people have made a big stink about copper's divergence from the S&P 500, and Jonathan Krinsky has been among them. In a Feb. 19 note, Miller Tabak's chief technical analyst wrote that a copper breakdown could lead to lower stock prices.

Now he's changed his tune. On Tuesday's episode of "Futures Now," Krinsky said, "The initial breakdown in copper is not necessarily a bearish indicator, if we are getting a structural change where a positive dollar is positive for stocks."

In other words, the negative correlation between stocks and copper can actually be explained by a third factor: the U.S. dollar. Since stocks and copper both tend to move inversely to the dollar, a rise in the currency tends to mean a drop in both copper and stocks. However, while copper's negative relationship to the dollar has held, we have recently seen stocks and the dollar become positively correlated.

You can see it on this chart:

»Read more
  Tuesday, 2 Apr 2013 | 11:50 AM ET

Is the 'Gold Era' Over?

gold bars.jpg
AP

Gold fell to a 2-1/2 week trough on Tuesday, moving down with other precious metals due to a session high in the dollar index and better appetite for assets seen as higher risk, such as European stocks.

Silver also dipped to its lowest since mid-August at $27.53 an ounce, while platinum and palladium lost more than one percent.

Spot gold fell as low as $1,579.50 an ounce, its weakest since March 14, and was down 1.1 percent at $1,580.99. The metal was on track for its biggest one-day loss since a 2.6 percent slide on February 20.

U.S. gold futures were down $17.30 to $1,583.70 an ounce.

»Read more

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