This pro trader explains why he's just about ready to short crude oil.
» Read MoreGold consolidated towards the upper end of its range yesterday, after bouncing off of a trend line that starts with the Jan. 5 low.
With the current price action against $1,680, gold is now bracing against a resistance trend line from the late November highs.
Energy bulls appear to be confident. According to the weekly Commitment of Traders report, big money and producers have raised their long bets on oil for the seventh week, to a nine-month high.
Nonetheless, crude oil continues to run into the major resistance wall at $98.12, with a $98.15 high on Friday.
Meanwhile, the U.S. dollar index pressed to new swing lows, testing the zone under 79. This will create support for crude oil and other commodities.
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We got the January jobs report, and the headline number was that 157,000 jobs were created.
To me, though, one aspect of the numbers resonates louder than the rest — and it explains why rates are plummeting in the face of decent economic news.
Both the November and December jobs number releases enjoyed significant upward revisions. And the current number was in line with forecasts. Despite those newly discovered jobs, the unemployment rate actually ticked up to 7.9 percent.
With the Dow Jones Industrial Average on track for its best January since 1989 and the Standard & Poor's 500 off to its fastest start since 1997, it seems most pros are expecting a banner year.
They say history is on the side of the bulls. When the S&P 500 gained at least 5 percent in January, it has almost always finished the year with a very strong double-digit gain.
Just check out this chart:
| Year | Jan Gain | Year Gain |
1951 | 6.02% | 16.35% |
| 1954 | 5.12% | 45.02% |
| 1961 | 6.32% | 23.31% |
| 1967 | 7.82% | 20.09% |
| 1975 | 12.28% | 31.55% |
| 1976 | 11.83% | 19.15% |
| 1980 | 5.76% | 25.77% |
| 1985 | 7.41% | 26.33% |
| 1987 | 13.18% | 2.03% |
| 1989 | 7.11% | 27.25% |
| 1997 | 6.13% | 31.01% |
Average 24.33%
Commodity traders seemed to be talking about one thing on Thursday - gasoline prices. If the economy is truly improving conventional wisdom would suggest that energy prices as well as prices at the pump should continue higher.
However, on Thursday the price action in the futures contracts called the bullish outlook into question.
By mid-session it appeared that gasoline prices would end their 10-session rally, as traders took profits before the expiration of the February contract.
Seasonal refinery maintenance has tightened supply and driven gasoline prices up sharply in the past two weeks, with gasoline futures settling at an all-time high for January of $3.0315 a gallon Wednesday.
"We were due for a pullback in gasoline," said Jim Ritterbusch of Ritterbusch & Associates. "We had a huge price spike, and now we're seeing a little correction."
Now what?
Tell us what you think by voting in our Futures Now poll.
Wednesday's mild equity sell-off has created some concerns regarding the strength of the current rally.
It's important to keep one's perspective in the face of what could be a very healthy pull-back that creates buying opportunities at attractive prices.
If S&P futures trade below 1490, I will consider it a signal that the correction is on. The first downside objective would be 1472, where market should find some support.
Crude oil has extended to new highs reaching $98 and seeming to attempt to reach out next target at $98.79. You must follow the U.S. dollar with Wednesday's data in order to trade crude oil.
Additionally, with equities on the war path, higher crude should follow suit. This market will remain bullish all the way down to $93 and I can see a healthy consolidation above that level.
Last week I talked about a potential breakout in copper and this morning it appears that it received the push it needed to trade higher.
It's interesting that last week's positive data out of China was not the catalyst to move copper out of its current range, but instead it was Caterpillar's positive comments regarding the domestic housing market.
The stock market continues to rally, with the Dow Jones Industrial Average marching toward the 14,000 level, but strategist Douglas Kass said Tuesday that the highs for the year may be in.
As Brent crude oil traded near three-month highs of around $113 a barrel on Monday, some futures traders expressed optimism that crude prices would continue to push higher.
DeAngelis is a CNBC Reporter and the host "Futures Now," only available on CNBC.com and devoted to the futures market.
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