FirstAlert(tm) Daily 5/10/10: Crude Oil Prices Snap Back On EU Aid Plan

- Commodities Commentary -

(Go to http://www.financialwire.net/2010/05/10/forex/ for today’s Forex Commentary.)

May 10, 2010 (FinancialWire) (Investrend Information Syndicate) (Via Brewer Futures Group) — Early trading today, as of approximately 10:00 AM EDT, has the ProShares Ultra Gold ETF (NYSE: UGL) down by about 2.09% on volume of 68,200 shares, the SPDR Gold Trust (NYSE: GLD) is down by about 1.07% on volume of 7,200,000 shares, the Market Vectors Agribusiness ETF (NYSE: MOO) is up by about 4.22% on volume of 131,1000 shares and the iPath Goldman Sachs Crude Oil ETF (NYSE: OIL) is up by about 2.82% on volume of 467,400 shares.

FinancialWire(tm) contributor, Brewer Futures Group, provides some related perspective and insight regarding the outlook for the commodities markets:

June Crude Oil rallied nearly 4% overnight after the European Union provided clarity to the commodity markets with a plan to stabilize the Euro Zone economic region. The EU’s plan provides new financial aid worth nearly a trillion Dollars. The new aid proposal which includes several key measures subject to parliamentary approval calls for the restructuring of debt, low interest loans and the purchase of government and private bonds.

The positive move by the European Union is driving up demand for riskier assets this morning after a hard sell-off last week. In addition to the fresh news out of the Euro Zone, traders are now getting a chance to refocus on the positive economic news out of the U.S. last week including the addition of 290,000 jobs. Traders are now a little more optimistic that the aid package will help stop the slide in the Euro Zone and subsequently put the global economic recovery back on track.

Technically, the rally in June Crude Oil is short-covering at this time, but upside momentum is strong enough to make a rally to the retracement zone at 80.83 to 82.32 likely over the near-term.

June Gold has been hit hard by the European Union announcement to provide aid to the ailing Euro Zone economy. Despite the weaker U.S. Dollar, traders are selling off gold overnight although there has been a technical bounce off the low. For several weeks, gold has indicated a decoupling from the Dollar because of speculator buying driven by the crisis in Greece. Last week is was clearly evident as the financial crisis widened in the Euro Zone that traders were treating June Gold as a safe haven market.

Technically, the last leg up was $1156.20 to $1214.90. This formed a retracement zone at $1185.60 to $1178.60. Overnight the 50% price at $1185.60 was tested as the market broke to $1184.40. Profit-takers and buyers stepped in at this price to trigger a mild rally.

June Treasury Bonds are trading sharply lower this morning. The newly proposed sweeping-aid package for the Euro Zone is helping to support the Euro and drive up demand for riskier assets. This is triggering a liquidation break in the Treasury futures markets. Last week nervous traders bought Treasury Bonds and Treasury Notes for protection in a flight-to-safety rally.

Based on the month-long range of 114’06 to 124’16, expectations are for this market to correct back to the retracement zone at 119’11 to 118’04. A break through 120’12 is likely to trigger an acceleration to the downside.

U.S. equity markets are trading sharply higher overnight following the announcement by the European Union to provide much needed financial aid to the troubled Euro Zone region. This bullish news helped bring assurances to traders that the policymakers are behind the Euro and willing to do what they can to instill confidence in the Euro.

The June E-mini S&P 500 gapped higher on the opening indicating strong upside momentum which has already driven the market past a key retracement zone at 1136.25 to 1155.25. The next upside objective is a downtrending Gann angle at 1176.75.

The NASDAQ and Dow are also posting strong gains which could take the Dow up as much as 500 points today. Buying has been so strong that the frenzy may even trigger a limit-up move in the indices.

The move by the European Union should shift trader focus back to the global economic recovery. Some of today’s buying is being triggered by a delayed reaction to Friday’s better than expected U.S. Non-Farm Payrolls Data.

(Source: Courtesy of Brewer Futures Group; For more information, content and/or a preferred introduction to Brewer Investment Group, LLC and/or Brewer Futures Group, LLC, contact Investrend Communications via resources@investrend.com with “Brewer” in the subject line. )

Brewer Futures Group advises that futures and options trading involves substantial risk of loss and is not suitable for every investor. The valuation of futures and options may fluctuate, and, as a result, clients may lose more than their original investment. The impact of seasonal and geopolitical events is already factored into market prices. Prices in the underlying cash or physical markets do not necessarily move in tandem with futures and options prices. In no event should the content of this correspondence be construed as an express or implied promise, guarantee or implication by or from Brewer Futures Group, LLC, Brewer Investment Group, LLC, or their subsidiaries and affiliates that you will profit or that losses can or will be limited in any manner whatsoever. Loss-limiting strategies such as stop loss orders may not be effective because market conditions may make it impossible to execute such orders. Likewise, strategies using combinations of options and/or futures positions such as "spread" or "straddle" trades may be just as risky as simple long and short positions. Past results are no indication of future performance. Information provided in the above article is intended solely for informational purposes and is obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted. For more information, content and/or a preferred introduction to Brewer Investment Group, LLC and/or Brewer Futures Group, LLC, contact Investrend Communications via resources@investrend.com with “Brewer” in the subject line.

The FirstAlert(tm) “Money Index” is an indicator of the depth of market direction or indirection. While not always including the same stocks, the NYSE/NASDAQ/AMEX 25 Most Actives and NYSE/NASDAQ/AMEX greatest Percentage Losers and Percentage Winners (weighted against pure monetary loss/gain) indicate the direction in which the mass of money is flowing, as well as the general focus of the market. Of the Most Actives, last session’s trading showed 14 advancers versus 11 decliners. Today’s entire Money Index is posted in FinancialWire(tm)’s reference section (at http://www.financialwire.net/2010/05/10/fa-index-12/). (Go to http://www.financialwire.net/?s=%22%27Money+Index%27+Synopsis for all the most recent FirstAlert(tm) “Money Index” Synopses.)

The FirstAlert(tm) Economics Calendar lists: Treasury auctions 3- & 6-month bills (11:30 am ET); Fed Chairman Bernanke delivers a commencement address.

The FirstAlert(tm) Events Calendar showcases ADBE, CADX, EWBC, IMMR at the JMP Securities Research Conference; EHTH, ANSW, CCOI, MHP at the Jefferies Global Internet, Media & Telecom Conference.

FirstAlert(tm) Website of the Day: http://www.gotomeeting.com

Quote of the Day: "The hardest job kids face today is learning good manners without ever seeing any." –Fred Astaire (05/10/1899 – 06/22/1987) US dancer, actor, singer.

Today is: Windmill Day

Happy Birthday: 213 – Claudius Gothicus, Roman emperor (d. 270); 1265 – Emperor Fushimi of Japan (d. 1317); 1775 – Robert Gray, American sea captain (d. 1806); 1886 – Karl Barth, Swiss Protestant theologian (d. 1968); 1899 – Fred Astaire, American dancer and actor (d. 1987); 1915 – Denis Thatcher, British businessman and husband of Margaret Thatcher (d. 2003); 1940 – Wayne A. Downing, retired United States Army general; 1957 – Sid Vicious, English bassist (The Sex Pistols) (d. 1979); 1965 – Linda Evangelista, Canadian supermodel; 1976 – Aggeliki Tsiolakoudi, Greek javelin thrower; 1983 – Gustav Fridolin, Swedish politician; 1990 – Josh Dugan, Australian rugby league player.

Today in History: 1503 – Christopher Columbus visits the Cayman Islands and names them Las Tortugas after the numerous turtles there; 1869 – The First Transcontinental Railroad, linking the eastern and western United States, is completed at Promontory Summit, Utah (not Promontory Point, Utah) with the golden spike; 1940 – World War II: Winston Churchill is appointed Prime Minister of the United Kingdom; 1954 – Bill Haley & His Comets release "Rock Around the Clock", the first rock and roll record to reach number one on the Billboard charts; 1994 – Nelson Mandela is inaugurated as South Africa's first black president.

FirstAlert(tm), published exclusively by FinancialWire(tm), was created by Gayle Essary, founder of Investrend Communications, Inc., parent of Investrend Information. The opinions expressed in FirstAlert(tm) do not necessarily reflect the opinions of Investrend or of FinancialWire(tm).

FinancialWire(tm) is committed to serving the financial community through true journalism and providing relevant resources to investors. Standards-based, independent equity research on numerous public companies is available through the Investrend Research Syndicate (http://www.investrend.com/reports) written by FIRST Research Consortium (http://www.investrend.com/FIRST) member-providers. Real-time, streaming research for companies and funds mentioned in FinancialWire(tm) news is available via the Investrend Research Syndicate, courtesy of Stock Smart (at http://investrend.stocksmart.com/ss/html/hpcompany.html). Free annual reports and company filings for companies mentioned in the news are available through the Investrend Information Syndicate (at http://investrend.ar.wilink.com/?level=279). FinancialWire(tm), in cooperation with the Investrend Broadcast Syndicate, also provides complete, daily conference call and webcast schedules as a service to shareholders and investors via the FirstAlert(tm) Network’s “FirstAlert(tm) Daily” webpage (at http://www.financialwire.net/news-alerts/).

FinancialWire(tm) is a fully independent, proprietary news wire service. FinancialWire(tm) is not a press release service, and receives no compensation for its news, opinions or distributions. Further disclosure is at the FinancialWire(tm) website at http://www.financialwire.net/disclosures.php and http://www.financialwire.net/2010/04/23/safe-harbor/). Additional resources for investors are also accessible via the FinancialWire(tm) website (at http://www.financialwire.net/2010/04/23/investor-resources/). Contact FinancialWire(tm) directly via inquiries@financialwire.net.

[ssryrsyr] [frstlrtrlts] [frstlrtdlycmmt] [cmmtry] [mrktqrspcl] [ftrscnndtsw] [bsdarrgnmnt] [brwrgrprgw]