Crude Oil Analysis Report 9-15-19…Oil Will Gap Higher Sunday Evening

Fracking and horizontal drilling technology (which has created access to the once inaccessible shales of oil and gas) in the last 10 years has made the US a major player in the world of oil production.

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The technology has bee so beneficial to the US, that in 2018, the US become the number one producer of oil in the world.   However, I can’t leave Saudi Arabia out of this conversation.  They are the number two producer of oil in the world at 12.4 millions barrels/day.  As you know, the price of oil is probably one of the clearest examples of supply and demand. So say the oil rig count goes up in the US or Saudia Arabia increases oil production, the price of oil is surely to go down.  However, if the oil rig count goes down or if the oil pipelines are sabotaged, supply will take a hit and oil prices will rise. This past Sat, drones attacked Saudia Arabia oil pipelines.

Drone strikes on key Saudi Arabian oil facilities, among the world’s largest and most important energy production centers, have disrupted about half of the kingdom’s oil capacity, or 5% of the daily global oil supply.

Yemen’s Houthi rebels on Saturday took responsibility for the attacks, saying 10 drones targeted state-owned Saudi Aramco oil facilities in Abqaiq and Khurais, according to the Houthi-run Al-Masirah news agency.

In a statement on Sunday, Saudi Arabian Energy Minister Prince Abdulaziz bin Salman said that 5.7 million barrels a day of crude oil and gas production have been affected. The latest OPEC figures from August 2019 put the total Saudi production at 9.8 million barrels per day.

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So at the open on the crude oil futures Sunday at 6 pm eastern, I expect price to gap up,

but I have no idea if price will fill the gap that day because price is still within a $5 range going back to the beginning of August.

Thus the chart suggests to play the extremes, until they are broken, but always keep in mind of the bigger picture.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

Ag Analysis Report – 8/14/19…Yep, Corn Prices Went A Lot Lower

This past weekend I talked about how the latest AccuWeather 2019 crop production analysis predicts a significant decline from last year’s corn and soybean yield.  And how this past Monday, the fate of many farmers would be decided by the World Agricultural Supply and Demand Estimates (WASDE) is a monthly report that forecast supply and demand for major crops (global and United States) and livestock (U.S. only).  But this was another example of why I don’t really care about reports, news or Trump twits because price action trumps everything and the chart suggested corn prices were going to decline. 

Ag Analysis Report – 8/9/19…Is Corn Prices Going Lower???

The Agriculture Department on Monday said farmers planted a bigger corn area than analysts estimated and pegged crop yields that also exceeded expectations, sparking the biggest rout in futures since 2013. That was a blow to growers who were holding back supplies, hoping a rally that started in May due to delayed sowing would extend through the fall.

“This is a huge disappointment for farmers that have already been struggling with a lot of uncertainty with this corn crop, trade wars and what have you,” said Tanner Ehmke, manager of the research team at CoBank, a $138 billion lender to the agriculture industry. “A lot of people were banking on the opportunity to sell at much higher prices. This report now really brings that into question.”

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DDRUUUMM RROOLLLLLLL

I do feel story for all the farmers in the Midwest as they have just been reduced to pawns, as Trump continues to play chess with China.  And like the big Ag companies, I would love to teach those farmers how to hedge their crops with futures so they can protect themselves win, lose or draw.

If there was one message I could send the farmers, it would be the chart suggests price will retest the weekly demand at $356.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

♻️ 3 Recent Examples of Corporates Which are Working to Counter Climate Risks ♻️

Big Money Starts to Dump Stocks That Pose Climate Risks (Bloomberg)

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  • As climate change related risks are becoming more pronounced, major investment firms have been increasingly pushing companies to address these risks and their role in exacerbating them.
  • This year, almost every major public oil company faced at least one shareholder resolution involving climate change, with proposals winning record support.
  • While most asset managers prefer engagement to divestment, frustration over fruitless discussion and resolutions has also led to a growing divestment campaign.
  • Earlier this year, Legal & General Investment Management (LGIM) reduced its stake in oil giant Exxon by US$300m, using its remaining stake to vote against the reappointment Chairman and Chief Executive Officer Darren Woods.

Analysis and Comments

  • The whole debate around divestment vs engagement is a potentially divisive one – not so much among asset managers but in discussions with asset owners and particularly retail investors.
  • Over the last few years, it has been interesting to watch the shift in focus, as the engagers have increasingly honed in on the stranded asset risk across a whole range of industries, which has real and tangible implications for value.

Google pledges carbon-neutral shipping, recycled plastic for all devices (Reuters)

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  • Google announced beginning of the week that it would neutralize carbon emissions from delivering consumer hardware by 2020, and include recycled plastics in each of its products by 2022.
  • According to Anna Meegan, the company’s head of sustainability for its devices and services unit, the company’s transport-related carbon emissions per unit fell 40% in 2018 as it increased the use of ships rather than planes in transport.
  • Currently three out of nine products for which the company discloses details online contain recycled plastic (ranging from 20-42%) – which trails behind hardware rival Apple’s sustainability efforts.  

Analysis and Comments

  • The trend may be slow, but for those companies that sell high profile products such as Apple & Google, the pressure to show their green credentials appears to be growing.
  • It is not clear how Google will fully “neutralise carbon emissions from delivery” – initially it looks as if at least part of the solution will be via carbon credits (which will gradually become more & more expensive to buy).
  • Hence longer term, this increase in carbon crédits price could be providing an incentive for the transport sector to accelerate its own shift to low carbon.

Diageo spends £180m on greener African operations (FT)

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  • British spirits maker Diageo is investing £180m into green energy and water recovery solutions such as biomass boilers, solar installations and water recycling systems at 11 of its breweries across Africa.
  • The investment is the company’s largest environmental investment in a decade, and will include £50m in upfront capital for solar, water treatment and biomass equipment, as well as £130m in long-term supply and maintenance contracts.
  • The company’s ultimate goal is to become 100% green and it plans to half its water usage and GHG emissions by 2020 as part of a group-wide commitment. It is also increasing its focus on sourcing locally in, with 78% of agricultural materials used in its 12 breweries across Africa currently sourced from local farmers.

Analysis and Comments

  • Africa contributes c. 13% of Diageo’s global turnover and about half of the company’s beer sales, and a minimum of 20 of the company’s African production facilities are in so-called “water-stressed locations”.
  • Unsurprisingly, water is an essential ingredient in all of Diageo’s brands (90%+ of beer and 60% of spirits) and the company has thus far been able to achieve a c.44% improvement in water efficiency between 2009 and 2018.
  • According to new data from WRI’s Aqueduct tools, 17 countries (including Africa) – home to one quarter of the world’s population – face extremely high levels of baseline water stress, as water withdrawals globally have more than doubled since the 1960s.
  • Of the 17 most water-stressed countries,12 are in the Middle East and North Africa (MENA), where growing demand and climate change are pushing already constrained countries even further into extreme stress.
  • According to the World Bank, this region has the greatest expected economic losses from climate-related water scarcity (c. 6-14% of GDP by 2050), stressing the importance of pursuing SDG 6 – ensuring the availability and sustainable management of water and sanitation for all.
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Gold Smart Money Sentiment 8/12/19 – This Is Why I’m Became A Gold Bug

The Commitments of Traders (COT) is a weekly market report issued by the Commodity Futures Trading Commission (CFTC) listing the positions held by commercial traders and the “Smart Money”, the hedge funds and bank institutions in various futures markets in the United States. Since the COT measures the net long and short positions held by speculative traders and commercial traders, it is a great resource to gauge sentiment in the Markets.

In recent weeks gold has hit a six year high and is on the verge of closing above a key psychological level at $1500. Since December, gold is up 15%.  Because of the ongoing trade war between the US and China and now a pending currency war between US and China, Goldman Sachs said last week the risk of a recession is rising. And what is the Smart Money doing, they are rushing into safe havens.

The Smart Money is buying Gold as evidence of open interests increasing, along with the price of gold.

Which has translated into Gold long positions rising for the 9th time in the past 10 weeks.

We haven’t seen this much bullishness in Gold by the Smart Money since 2016.

But this is the chart that does it for me, as it indicates the Smart Money really became bullish on Gold at the beginning of June.

Thus, the chart suggest to go long on Gold during pull backs.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

The Are Slowly Coming, In Groups Of Herds

The new report from digital asset management company Coinshares points to the increasing dominance of institutional investors in Bitcoin. At the same time, retail investment in the sector is dwindling. This could have lasting effects on the way Bitcoin’s price behaves in the future.

According to Coinshares, there is a fundamental difference between the price rise of 2017 and the bull market of 2019. They noted that four factors were responsible for the 2017 Bitcoin price frenzy- a spike in Google searches for ‘Bitcoin’, media attention, rise in a number of tweets related to Bitcoin and the corresponding rally in altcoins. This time, none of these factors are visible in the market.

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I’m still remember my 2nd post ever on Steemit,

Wall Street Secrets Revealed #1 – The Hedge Funds Are Coming To Crypto

I talked about the launch of Bitcoin Futures on the Chicago Mercantile Exchange in December 2017 and how Retail Investors chase price and buy high and sell low, while the Professionals buy low and sell high. The Hedge Funds have purposely sold Bitcoin futures to get in a better price.

I also talked about the Retail Investors are throwing in the towel after seeing a more than 50% correction in the Bitcoin price to the buyers, the Hedge Funds, who are loading up and buying from the Retail Investors. But to fill all their buy orders, as the sell orders dry up, price must go down to the next stack of sell orders. We are approaching what I believe will be the bottom of bitcoin at $6000.

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I also still remember my 11th post ever on Steemit, as it was confirmation that supply and demand works in the Crypto space as well,

Crypto Analysis Report 2-16-18 Bitcoin…Sellers Were Waiting At $10000

Two trillion dollars are on Wall Street, waiting for the pipelines from Wall Street to the Crypto Space to be fully developed. When we talk about Bitcoin hitting $100k even $200k, will it’s going to be the Smart Money’s push into Cryptos that gets price there. Buckle your seat belts, it’s going to be one hell of a ride over the next 5-10 years.

This post is my personal opinion. I’m not a financial advisor. Do your own research before making investment decisions. By reading this post, you acknowledge and accept full responsibility of any gains or losses.

Ag Analysis Report – 8/9/19…Is Corn Prices Going Lower???

The planting season in 2019 was historically slow due to wet weather several months ago. The storms left millions of acres unseeded and put corn crops that were planted late at a greater risk for damage.  For example, in May, a farmer in Indiana said his corn crop was only 6% planted at the time, but this was the case in most of the Midwestern states as many farmers experienced record flooding across the central United States.

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The latest AccuWeather 2019 crop production analysis predicts a significant decline from last year’s corn and soybean yield, as well as a noticeable variation from the July U.S. Department of Agriculture (USDA) estimates.

AccuWeather analysts predict the 2019 corn yield will be 13.07 billion bushels, a decline of 9.3% from 2018 and 5.8% lower than the latest USDA figures. It would be the lowest yield since 2012, a year of a significant drought that saw final corn production numbers plummet to 10.76 billion bushels.

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The World Agricultural Supply and Demand Estimates (WASDE) is a monthly report published by the United States Department of Agriculture (USDA) providing comprehensive forecast of supply and demand for major crops (global and United States) and livestock (U.S. only).  On Monday they report their numbers for corn.

I have no idea what the crop yield is going to be when the report is issued on Monday. Big here is a bigger picture of the corn futures on the weekly chart.

So I will repeat, I have no idea what the results are going to be on Monday, but based on the daily chart, the chart suggests, the results will surprise on the upside, pushing prices down, due to price entering a daily supply as I finish this post.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

Gasoline Analysis Report 8/9/19 – More Declines To Come

The last time I posted about gasoline was in late June,

Gasoline Analysis Report 6/27/19 – Will Prices Continue To Rise???

The refinery was the largest and oldest on the East Coast went up in flames, removing 25% of the refining capacity in the Northeast in the process.

The chart suggests if gasoline can rise a bit higher to short (due to gasoline supply concern) price at the daily supply at $2.015. 

In the article I talked indirectly about gasoline being a derivative of oil, which means that if oil rises/falls, gasoline will follow suit.

Retail gasoline prices tend to rise in the spring and peak in the Summer when people drive more frequently.  So the set-up had the seasonality going for it as well since the accident was a month past Memorial Day.

Unleaded Gasoline miNY Futures (QU) Seasonal Chart

Needless to say price hit the daily supply at $2.015 and fell.

According to AAA, the national average is about $2.69 per gallon now, down from a couple of cents from last week.  I anticipate retail gasoline prices continue to decline in the coming months.   The  gasoline futures’ chart suggests price is heading down to $1.4500

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

Dr. Copper Approaching A “The Line In The Sand” Level

The only channel I seldom have on is either CNBC or Bloomberg.  While the financial talking heads are talking about the 800 point decline in the DOW, the 10 yr and 30 yr interest rate hitting multi-year lows, the VIX and the impending currency war, nobody is talking about Dr. Copper.

The term Doctor Copper is market lingo for the copper’s ability to predict turning points in the global economy. Rising copper prices imply demand or a growing global economy and declining copper prices imply lack of demand or a slowing global economy.

The focus is increasingly on the damage caused by the havoc of a trade dispute between the world’s two biggest economies. The broad applications for copper mean it’s particularly vulnerable to the synchronized tailspin being seen in everything from car-making and earth-moving equipment to commercial property and advanced electronic components.

“What the hard data is telling us is that end-use demand is slow and in many places getting kicked quite hard,” Oliver Nugent, a metals strategist at Citigroup Inc., said by phone from London. “China’s commodity-intensive economy is as weak as it’s been in recent history.”

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From a macro perspective, copper stalled out in Jan of 2018 and when trade tariff became a huge topic of discussion, the momentum in copper turned which was confirmed by the trendline break.

Fast forward almost two years later and trade talk is still being discussed and in recent days it’s a matter of who has the bigger stick. However, what’s different today is Germany is pretty much in a recession, global interest rates are at multi year lows and the US just cut rates for the first time in 10 years. Thus, copper is at a level that I’m deeming, “the line in the sand.”

If copper closes below 2.5000 on the monthly chart, look for copper to make its way down to 2.0000.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

Silver Gets No Love…Until Now

Silver prices on surged more than 4% on Wednesday, this highest one day return in three years and in the process breached the key psychological $17 level.

although I’m very bullish on Gold,

but I think the red headed step child, Silver will perform better than Gold over the next several years.    The gold/silver ratio is simply the amount of silver it takes to purchase one ounce of gold.  And when this ratio hits 80, it reverses. 

Since the mid-1990s, the ration has hit 80 four times.  And when it reversed, silver outperformed gold over the next several years. 

The Smart Money is recognizing what’s going on.  They just bought over 85, 000 of the September call options, $17 strike price in SLV. 

SLV is the iShares Silver Trust which seeks to reflect the performance of the price of silver. However, I think SLV is just beginning.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.

The SPDR Gold Trust ETF, GLD…Broke Out

This past Monday, while the DOW dropped over 800 points, gold rose 1.5% and in the process hit a six year high.  The gain yesterday is on top of the 15%+ gain since December.  Gold has a lot going for itself these days.  We are on the brink of a currency war between the US and China, the British pound may collapse if England leaves the EU and the addition tariffs imposed by Trump isn’t helping the global economy which is slowing down.

The best thing to do in these trying times is to obtain some hard assets if possible in form of gold / silver coins. The next best alternative, besides bitcoin is to invest in funds that mimic the performance of gold.

The 800 lb gorilla gold electronic traded fund is GLD.  It’s the largest fund in the space with over $32 billion in assets under management.

Five month ago I talked about GLD and laid out my projected price action for GLD.

Gold…The “Trade Of The Century”

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Although gold hasn’t broken out yet, from its recent consolidation,

the GLD has broken out.

But don’t chase price, usually breakouts return to origin of the break out. So for those who don’t have any exposure to gold, the chart suggests to go long on the pull back.

This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.