How Far Could Crude Oil Go?

Posted on by Aibek Burabayev

The price of crude oil closed above the earlier top of $54.6 last Friday to confirm the reversal to the upside. So, is it the right time to find out how far we can go with it?

At the end of last May, I posted an early warning of the imminent crash of crude oil price amid the mass media euphoria from the dream of the $100 price tag per barrel, which was a good contrarian indicator. The price of WTI finally dropped last October after it broke long-term support.

I am very grateful to you as you were very active on the poll where I asked you to share your expectations about the crude oil price by the end of 2018. Below are the results of it.

wti crude oil futures

As we can see most of you were ready for the drop of the oil price in the next lower range between $50 and $70 marks, although there were oil optimists in second place, who bet on the price to be in the $70-$90 range. Only those whose bets ranked the third ($30-$50) turned out to be right as oil finished the previous year at $45.8 after hitting the $42 area the day before Christmas.

In this post, I would like to show you some historical similarities, which could help us to understand how deeply the current pullback could go. Let’s start with the bigger chart. Continue reading "How Far Could Crude Oil Go?" →

Weekly Futures Recap With Mike Seery

Posted on by The INO.com Team

We've asked Michael Seery of SEERYFUTURES.COM to give our INO readers a weekly recap of the Futures market. He has been Senior Analyst for close to 15 years and has extensive knowledge of all of the commodity and option markets.

Michael frequently appears on multiple business networks including Bloomberg news, Fox Business, CNBC Worldwide, CNN Business, and Bloomberg TV. He is also a guest on First Business, which is a national and internationally syndicated business show.

Gold Futures

Gold futures are trading lower by $3 today breaking a 5-day winning streak hitting a 7 month high yesterday continuing its bullish momentum. Gold reacted positively earlier in the week off the Federal Reserve comments stating that basically, they will not raise interest rates until probably later this year sending stock prices & many commodities higher across the board. I have been recommending a bullish position originally in the February contract from around the 1,252 level as you had a roll over into the April contract due to expiration as prices are currently trading at 1,327 an ounce. As an exit strategy, I would place the stop loss under the 10-day low which was hit on January 24th at 1,281 as the chart structure will not improve for another three trading sessions so you will have to accept the monetary risk at this time. Gold prices are trading far above their 20 and 100-day moving average as clearly the trend is higher as we've taken out major resistance as well as I still think prices could trade up to the 1,400 level as demand has come back into this commodity.
TREND: HIGHER
CHART STRUCTURE: SOLID
VOLATILITY: LOW
Continue reading "Weekly Futures Recap With Mike Seery" →

IBM Finally Delivers Robust Numbers

Posted on by Noah Kiedrowski

International Business Machines (IBM) finally delivered the long-awaited robust quarterly numbers that retail investors and Wall Street had been craving, lifting the stock by 10% in a single session post-earnings. IBM had been trading in the doldrums for months as the bear market in Q4 2018 took the stock down to the sub $120 level, where it traded for months until its Q4 earnings release broke this negative trend. IBM suffered a stock implosion after its Q3 earnings release that fell short of expectations coupled with its announcement that it will be acquiring Red Hat (RHT) for $34 billion. The combination of bad news in conjunction with the bear market backdrop yielded an IBM stock that traded at a 5-year low of $106 with a 5.9% dividend yield. IBM has had a long turn in restoring growth after posting 20+ consecutive quarters of declining revenue however IBM had posted quarters of revenue growth as of late. This growth has come on heels of its long-term imperatives beginning to bear fruit in emerging high-value segments that has fundamentally changed its business mix while evolving its offerings to align with new age information technology demands. The Red Hat acquisition will ostensibly augment its transition away from its dependency on legacy businesses to the future of cloud, artificial intelligence, and analytics. As IBM transitions to quarterly revenue growth, in the backdrop of its evolution to emerging high-value segments (i.e. blockchain) and bringing the Red Hat portfolio into the fold, IBM presents a compelling investment opportunity, despite its recent pop after earnings were announced. In addition to the evolving business mix in strategic imperatives, IBM offers a great dividend, share buyback program while continuously acquiring companies to drive the business into the future.

Q4 Earnings – 10% Post Earnings Pop

IBM reported Q4 earnings of $4.87 EPS and revenue of $21.76 billion which was a -3.5% year-over-year decline however beat analysts’ targets by $30 million on revenue. IBM popped the following day as the company laid out its growth narrative and Red Hat acquisition. In its faster-growing business segments such as strategic imperatives and Cognitive Solutions, revenue grew by 9% and 2%, respectively. Continue reading "IBM Finally Delivers Robust Numbers" →

Booming Jobs Report Kicks Off February

Posted on by The INO.com Team

Hello traders everywhere. The U.S. economy added 304,000 jobs in January, according to data released by the Bureau of Labor Statistics. The market was anticipating the U.S. economy to have added 170,000 jobs in January. The report follows a 35-day U.S. government shutdown, the longest in history. It also marks the 100th straight month of jobs growth. But the reaction by Wall Street was muted with the S&P 500 and NASDAQ trading in negative territory on the day. However, the DOW was hanging on to positive gains heading into late afternoon trading.

We closed out January on a high note with all three major indexes posting monthly gains over 7%. The S&P 500 checked in with an increase of +7.8%, DOW +7.1%, and the big winner was the NASDAQ with a gain of +9.7%. All three indexed posted weekly gains after posting losses last week.

Booming Jobs Report

The U.S. Dollar lost -.45% for January and also lost -.27% for the week closing out a tough January for the greenback.

After a tough end of the year, crude oil bounced back with a weekly gain of +3.36% to finish out the month strong and to push it's monthly gain to +16.40%, a truly impressive comeback after losing over -9% in December.

Gold's performance wasn't quite as good the overall market on a monthly level posting a gain of +2.58%, but it was in line with the major indexes on a weekly level posting an increase of +1.12% at the end of the week.

Bitcoin suffered its sixth straight month of losses losing -7.9% in January. That happens to be a new record for Bitcoin. It also lost another -3.1% on the week. I don't see much light at the end of the tunnel for Bitcoin. Is it dying a slow death or will it make a comeback?

Key Levels To Watch Next Week:

Every Success,
Jeremy Lutz
INO.com and MarketClub.com

U.S. Petroleum Supply Expected To Surge To 2025

Posted on by Robert Boslego

The Energy Information Administration released its Annual Energy Outlook for 2019, and what a difference a year has made. Due to shale oil’s production response in 2018, EIA’s outlook through 2025 shows supplies surging.

Energy Information Administration

The production forecast includes both crude oil and “other supply,” which will be explained in greater detail below. Often, U.S. production is generally limited to crude oil, but other liquids included in petroleum supply, have become a major component and are expected to rise even faster than crude alone.

Total liquids are projected to rise from 17.5 million barrels per day (mmbd) in 2018 to 22 mmbd in 2025 in EIA’s reference (base) case. In its high price scenario, EIA projects 2025 volume could be 26.4 mmbd. By comparison, Russia is producing just over 12 mmbd and Saudi Arabia just over 10 mmbd with its recent cutback. And so US output could be roughly the number two and three highest country volumes combined. Continue reading "U.S. Petroleum Supply Expected To Surge To 2025" →