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WTI Crude Oil & Oil Stocks Seasonality & Year-End Outlook

October 31, 2012 by · Leave a Comment 

By Chris Vermeulen, TheGoldAndOilGuy

By: Chris Vermeulen –

Crude oil has had some large price swings this year and another one may be on its way. This report shows the seasonality of crude oil along with where oil is trading and what the oil service stocks are telling us is likely to happen going into year end.

Since WTI Crude Oil topped out in September at the $100 resistance level (Century Number) many traders are looking for a bounce or bottom to form in the next week. Historical charts show that on average the price of oil falls during November and the first half of December.

The charts of oil and oil stocks shown below have formed patterns on both time frames (weekly & daily) that lower prices are to be expected. If you did not read my Gold Seasonality Report I just posted be sure to review it here:

 

WTI Crude Oil Weekly Chart:

Here you can see that price tends to fall going into Christmas and rallies during the last week of trading. This price action falls in line with Dimitri Specks seasonal chart providing us with insight as to what we should expect. Later this week I will finish my report on the Election Cycle Seasonality report which shows weakness in the market during Oct & Nov when a president is up for re-election.

 

Oil Services Stocks – Weekly Chart:

If you follow oil closely then you know likely know already that oil related stocks can lead the price of oil by a couple weeks. What this means is that if big money is flowing into oil stocks (bullish price patterns with strong volume), then you should expect the price of crude oil to rise in the coming days. That said, if money is flowing OUT of oils stocks then lower or sideways oil price should be expected.

The weekly chart oil stocks show a very large bearish head & shoulders pattern. While I do not think the neckline will be broken it is very possible.

One of the most important pieces of data on the chart is the VOLUME. Notice the lack of it… Volume tells us how much interest and power is behind chart patterns and declining volume clearly tells us these investments are out of favor currently and that big money is not moving into them.

 

Oil Services Stocks – DAILY Chart:

Zooming into the daily chart of the oil service stocks we can see there is yet another bearish pattern unfolding. Another head & shoulders pattern which looks as though it is just starting to breakdown as of this writing. Next support level is $35-36.

 

WTI Crude Oil and Oil Service Stocks Trading Conclusion:

Looking forward 1-2 months (November – December) taking the seasonal price swings in oil, re-election cycle seasonality and price action of oil stocks I feel oil will trade sideways or down from here. With that being said, expect crude oil to rally during the last week of the year. I hope this provides some useful info for your trading!

Get my Daily Trading Analysis & Trade Setups at:

 

   

Chris Vermeulen is Founder of the popular trading analysis website . There he shares his highly successful, low-risk trade ideas. Since 2001 Chris has been a leader in teaching others to skillfully trade Currencies, Stock Indices, Bonds, Metals, Energies, Commodities, and Exchange Traded Funds. Reach Chris at: Chris[at]TheTechnicalTraders.com

 

Disclaimer:
This material should not be considered investment advice. Technical Traders Ltd. and its staff are not a registered investment advisors. Under no circumstances should any content from this website, articles, videos, seminars or emails from Technical Traders Ltd. or its affiliates be used or interpreted as a recommendation to buy or sell any type of security or commodity contract.
Our advice is not tailored to the needs of any subscriber so go talk with your investment advisor before making trading decisions This information is for educational purposes only.

Will the German gold clamor ignite gold’s skyrocket?

October 31, 2012 by · Leave a Comment 

GATA

10a ET Wednesday, October 31, 2012

Dear Friend of GATA and Gold:

Interviewed today by King World News, Bill Haynes of CMI Gold and Silver wonders whether the clamor over the foreign vaulting of Germany’s gold and indications that the gold has been used for surreptitious market intervention will be the trigger for an explosion in the gold price. Maybe, but only if buyers take delivery of real metal, not paper, and remove the metal from the clutches of the banking system and governments. An excerpt from the interview with Haynes is posted at the King World News blog here:

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/10/31_I…

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

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http://www.gata.org/node/16

Matthew Lynn: German gold clamor shows distrust of central bank market rigging

October 31, 2012 by · Leave a Comment 

GATA

Why Do the Germans Want Their Gold Back?

There’s Something Reassuring about Physical Money

By Matthew Lynn
MarketWatch.com
Wednesday, October 31, 2012

http://www.marketwatch.com/story/why-do-the-germans-want-their-gold-back…

LONDON — Where does Germany keep its gold reserves?

It might sound like a silly question. In Germany, of course. Probably in a very deep vault somewhere in Frankfurt, surrounded by the best security systems that Teutonic technical brilliance can create.

As it turns out, however, that is the wrong answer.

Much of the German gold, the second largest national reserves in the world, is held in New York, London, and Paris. Now there is a campaign under way in Germany to bring the metal back home — and it is gathering strength all the time.

That tells us three things about the global monetary system, none of them especially reassuring.


The German gold reserves are among the most significant in the world. The country controls 3,396 tons of the stuff. That is a lot less than the United States’ 8,133 tons, but then Germany is a smaller country, and it has never had the world’s reserve currency. It is a lot more than the 2,451 tons held by the Italians or the 2,435 tons held by the French.

Much of it was built up under the old Bretton Woods system that operated from the end of World War II until 1971. Trade deficits and surpluses were settled by central banks in gold, and since Germany regularly ran big surpluses it ended up with a lot of the metal.

But most of it was not held in Germany itself. Much of it was held abroad, mostly in the U.S., U.K., or France. An estimated 66% is held at the New York Federal Reserve, 21% at the Bank of England, and 8% at the Bank of France. The old West Germany was on the front line of the Cold War and if the Russians had ever invaded, their tanks would have headed straight for the bullion vaults. There was no point in leaving such a tempting target open to attack.

With the Cold War a distant memory, many Germans want the gold returned to their own country. A campaign called “Bring Back Our Gold” has gathered significant support. Politicians and the popular press have jumped on the bandwagon.

Earlier this month the German Court of Auditors demanded that the Bundesbank audit its official gold holdings, and called for the repatriation of 150 tons in the next three years so that its quality can be inspected. As anyone who has ever bought some gold jewelry in a market will know, there are all kinds of tricks that an unscrupulous dealer can get up to — all that glitters is not necessarily gold.

And while it takes a fairly fevered imagination to speculate that staff at the Federal Reserve or the Bank of England have been nipping down to the vaults and replacing the German gold with some ingots they picked up at a souk in Cairo, the hysteria around the issue is growing so intense an audit is now judged necessary.

The Bundesbank doesn’t usually give in to popular pressure — it is not that kind of institution — but last week it put out a statement attempting to reassure people the gold was safe and promising to check on the stocks held abroad.

The cargo planes are not quite being loaded yet. But within the next five years, it is a fair bet that some new vaults will be needed in Frankfurt and some space will be going spare in New York and London.

What does the campaign tell us about the state of the global economy? Three things.

1) This generation of Germans is far more assertive about their national interest than their parents were. For 50 years most Germans were anxious to show they were citizens of the world. They dealt with post-war guilt by signing up for every international body available. Now they are quite happy to be citizens of Germany, and to stand up for their own interests.

2) Trust in financial institutions is dwindling all the time. Central banks built up a system of debits and credits because it was easier to move gold around on a ledger than to move it around on trucks. There are few more tempting targets for thieves, after all, than a cargo of ingots.

So it made sense for German gold to be stored elsewhere. But now people no longer trust those systems. They are increasingly unhappy with assets that are simply recorded on a bank’s balance sheet somewhere; they want something physical they can see and touch. That is true of national gold reserves, but it is increasingly true of other assets as well.

3) Most importantly, German sentiment is hardening against the single currency with each month that passes. After all, what is a whole vault full of gold in the basement of your central bank good for exactly? Starting a new currency, of course. And, er … that’s about it.

There’s nothing else you can do with it. In the most extreme circumstances, if the euro broke down chaotically and national currencies were bought back overnight, one of the key things the foreign exchange markets would look at when putting a value on the new deutschemarks, lira, or francs would be the amount of gold the central bank could back it with. That gold would seem a lot more valuable if it was held in your own country rather than a foreign one.

The campaign to bring back the German gold is in reality a campaign to bring back money that people can trust. The political establishment might not have caught up yet. But popular opinion believes it was sold a dog when it joined the euro, and is already looking forward to the day when it escapes responsibility for endless bailouts of its neighbors.

Yet it is hardly confined to Germany. Distrust of central banks rigging the monetary system is spreading from country to country. There will be many staging posts in the long road back to some form of gold-backed money — and the German campaign is just the beginning.

—–

Matthew Lynn is a financial journalist based in London. He is the author of “Bust: Greece, the Euro, and the Sovereign Debt Crisis” and he writes adventure thrillers under the name Matt Lynn.

* * *

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16

MineWeb: German gold audit could spark others

October 31, 2012 by · Leave a Comment 

GATA

8:20a ET Wednesday, October 31, 2012

Dear Friend of GATA and Gold:

MineWeb’s Dorothy Kosich today notes the clamor for an audit of Germany’s gold reserves, largely vaulted abroad, and the role played in that clamor by GATA. Kosich’s commentary is headlined “Germany’s Gold Reserve Inspection Could Spark Other Central Bank Gold Audits” and it’s posted at MineWeb here:

http://www.mineweb.com/mineweb/view/mineweb/en/page72068?oid=161110&sn=D…

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16

Jim Sinclair: Gold confiscation rumor control

October 31, 2012 by · Leave a Comment 

GATA

9:52p ET Tuesday, October 30, 2012

Dear Friend of GATA and Gold:

Jim Sinclair tonight dismisses concerns about gold confiscation and makes an important point about the confiscation undertaken by the U.S. government in 1933. Sinclair writes:

“In the 1930s gold was to the monetary system what ‘quantitative easing’ is today — a means of increasing the supply of money for Federal Reserve and Treasury Department discretionary use. The secretary of the treasury and President Roosevelt set the gold price higher arbitrarily at their daily breakfast — higher because, to create money then, the system required a higher value of gold to have more money outstanding. This is why Roosevelt ordered the confiscation of gold — to unfold his type of monetary stimulation, his QE. This is what confiscationphiles simply do not know.”

Indeed, some market analysts, like Stewart Thompson of the Graceland Updates letter –

http://www.gata.org/node/9955

– and the economists and fund managers Paul Brodsky and Lee Quaintance of QB Asset Management in New York –

http://www.gata.org/node/7673

– long have argued that central banks now are arranging a controlled ascent for gold to devalue their currencies for monetary stimulation, what GATA has called a controlled retreat with the longstanding gold price suppression scheme.

Like Sinclair, GATA also has been skeptical about any new confiscation of gold insofar as the justification offered for it in 1933 simply doesn’t apply today. That is, gold no longer constitutes a significant part of the money stock of the United States and the government already owns (or claims to own) the better part of the gold within the country’s borders.

But there is no absolute assurance about what the U.S. government will do as it grows more power-mad every day. As it confirmed officially to GATA in 2005, the Treasury Department claims the power, upon proclamation of an emergency by the president, to seize or freeze not only any gold or silver or gold- or silver-related asset but also to seize or freeze any financial asset. GATA’s correspondence with the Treasury Department is posted in the “Confiscation” section of our Internet site here:

http://www.gata.org/node/5606

Seize or free anything — that’s the land of the free and the home of the brave for you these days.

Sinclair’s commentary, “Gold Confiscation Rumor Control,” is posted at JSMineSet here:

Gold Confiscation Rumor Control

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16

Der Spiegel snickers about Germany’s gold but avoids the serious questions

October 31, 2012 by · Leave a Comment 

GATA

5:16p ET Tuesday, October 30, 2012

Dear Friend of GATA and Gold:

In the commentary appended here, the German magazine Der Spiegel today snickered a lot about concerns for the security of Germany’s gold reserves vaulted abroad without ever posing the crucial questions:

1) Does the Bundesbank have gold swap arrangements with any agency of the United States government or any other government?

2) Have such gold swap arrangements ever been implemented and, if so, how and why?

3) Exactly what are the “strategic activities” facilitated by the Bundesbank’s placement of the German gold reserves abroad, “strategic activities” admitted by the Bundesbank to GATA consultant Rob Kirby in August 2009 and to the German journalist Lars Schall in December 2010?:

http://www.gata.org/node/7713

http://www.gata.org/node/9363

Maybe our German friends can force-feed these questions to Der Spiegel, other German news organizations, and members of the Bundestag.

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

* * *

Why Germany Wants to See its U.S. Gold

By Sven Boll and Anne Seith
Der Spiegel, Hamburg
Tuesday, October 30, 2012

http://www.spiegel.de/international/germany/german-politicians-demand-to…

Bundesbank President Jens Weidmann wanted to personally convince Peter Gauweiler that the German gold was still where it should be. Early this summer the head of Germany’s central bank took the obstinate politician from the conservative Christian Social Union (CSU), a party that is a member of the government coalition in Berlin, and a number of his colleagues into the Bundesbank’s inner sanctum: the gold vault.

There 6,000 gold bars are stacked on industrial-strength shelves in a purpose-built building in Frankfurt. An additional 76,000 bars of bullion are stored in four safe boxes, in sealed containers.

But even this personal inspection wasn’t enough to reassure the visiting member of parliament — on the contrary: “The Bundesbank monitors its domestic gold in an exemplary fashion,” Gauweiler says, “and this makes it all the more incomprehensible that the bank doesn’t look after its reserves abroad.”


For quite some time now Gauweiler has been pestering the government and the Bundesbank with questions concerning where and how the country’s reserves are stored and how often they are checked. He has submitted requests and commissioned reports on the topic.

Last week Gauweiler celebrated his greatest triumph to date in his gold campaign, which has been a source of some amusement for many fellow German politicians: A secret report by the Federal Audit Office had been made public — and it contained stern criticism of the German central bank in Frankfurt. The Bonn-based auditors urged a better inventory system, including quality checks.

This demand, which even the bank’s inspectors saw as nothing more than routine, alarmed the Berlin political establishment. Indeed, the partially blacked-out report read like the prologue to an espionage thriller in which the stunned central bankers could end up standing in front of empty vaults in the United States.

For decades German central bankers have contented themselves with written affirmations from their American colleagues that the gold still remains where it is said to be stored. According to the report, the bar list from New York stems from “1979/1980.” The report also noted that the Federal Reserve Bank of New York refuses to allow the gold’s owners to view their own reserves.

Not surprisingly this prompted strong reactions in Berlin: The relevant Bundesbank board member Carl-Ludwig Thiele was summoned to Berlin to provide an explanation to the parliamentary budget committee. Heinz-Peter Haustein of the business-friendly Free Democratic Party (FDP) was even quoted by Germany’s mass-circulation Bild newspaper as saying that “all the gold has to be shipped back.”

The Bundesbank’s otherwise reserved Thiele said that he found at least “part of the debate” to be “rather grotesque.” His financial institution currently has more pressing problems. Bundesbank head Weidmann, for example, is desperately fighting the European Central Bank (ECB) decision to buy unlimited quantities of sovereign bonds from crisis-ridden countries as a way of lowering their borrowing costs. In addition, the Bundesbank has already pumped nearly E700 billion ($906 billion) into primarily southern European countries as part of the euro-zone central bank transfers known as Target II.

Germany’s gold reserves are currently worth some E144 billion and are not stored “with dubious business partners,” as Thiele stresses, but rather with “highly respected central bankers.”

There is in fact nothing unusual about how Germany deals with the precious metal. Many other central banks store a portion of their gold reserves abroad. The Netherlands, for example, places its trust in its colleagues in Ottawa, New York, and London.

But the relationship Germans have with their gold is a special one. Germany hoards nearly 3,600 metric tons of the precious metal — only the US has more. Much of this gold treasure was amassed under the Bretton Woods international monetary system, in which the dollar served as the world’s key currency and was directly convertible to fixed quantities of gold.

Before the gold standard was terminated in 1971, the current account surpluses generated by Germany’s “economic miracle” were partially balanced out in gold. Thousands of U.S. bars of gold alone were transferred to German ownership.

Since the euro is not backed by gold, such vast reserves are actually no longer necessary. Nevertheless, the Germans continue to resolutely defend them — and every attempt to use this treasure has been met with dismay.

There has been no lack of proposals: Former German President Roman Herzog wanted to sell the gold to form the basis for a capital-based nursing care insurance scheme. In 2002 FDP parliamentary floor leader Rainer Bruderle proposed a fund for natural disasters. Former Bundesbank head Ernst Welteke added to the debate by suggesting the foundation of a national educational fund. But none of these ideas were ever taken seriously.

Most recently German Chancellor Angela Merkel of the conservative Christian Democratic Union (CDU) shot down an idea by the euro partners to use the reserves as collateral for euro bonds.

As a result, in addition to safeguarding the reserves of over 60 countries, the Federal Reserve Bank of New York continues to hold 1,536 metric tons of German gold — or nearly half of Berlin’s reserves. This enormous hoard of gold is stored in the fifth subfloor of the bank’s building on Liberty Street, 25 meters (80 feet) below street level, and 15 meters below sea level. According to the bank’s website, the vault rests on the bedrock of Manhattan Island.

Tourists are allowed to venture below street level to see the vault. After descending in an elevator, they stand in front of an enormous steel cylinder that pivots like a door in a 140-ton steel-and-concrete frame. But not even the owners are allowed to view their own gold. According to the Federal Audit Office report, the Fed explained that “in the interest of security and of the control process” no “viewings” are possible.

Finally, in 2007, “following numerous enquiries,” Bundesbank staff members were allowed to see the facility, but they reportedly made it only to the anteroom of the German reserves.

In fact, auditors from the Bundesbank made a second visit in May 2011. This time one of the nine compartments was also opened, in which the German gold bars are densely stacked. A few were pulled out and weighed. But this part of the report has been blacked out — out of consideration for the Federal Reserve Bank of New York.

“I would like more transparency on the issue,” says Bundesbank board member Thiele. The Americans are very sensitive, though, when it comes to security procedures in their gold storage facilities. In their second major depository, the legendary Fort Knox, practically no one in recent decades has been allowed to view the gold reserves.

Such intense secrecy fuels legends. Many conspiracy theorists have suspected for decades that the German gold has long since disappeared. Others believe that it has been lent out. They contend that there are only promissory notes of little worth stored in the bank’s vaults.

Another myth that has been making the rounds in nationalist-oriented German circles is that the United States refused to hand over the treasure and threatened during the Cold War to withdraw its troops from Germany if the Germans demanded their gold back. Former Bundesbank head Karl Blessing, according to the theory, had to provide the United States with written confirmation that he would never do such a thing.

This letter, as it happens, actually exists, as Blessing confirmed in his last interview with Spiegel in 1971 — except it doesn’t concern the German gold but rather U.S. gold reserves. Until 1971 every dollar could be exchanged for the precious metal. Blessing thus promised the U.S. Federal Reserve that he would no longer convert the colossal German dollar reserves to gold because this would have caused the currency’s value to plummet.

Today this historic document is even available online.

—–

GATA EDITOR’S NOTE: Yes, the Blessing letter was obtained by the German freelance journalist Lars Schall in January 2011 and published at GATA’s Internet site here:

http://www.gata.org/node/9547

—–

But that hasn’t silenced those who oppose stockpiling German gold abroad. Instead, the debate over a collapse of strictly paper-based currency is experiencing a renaissance — as is the dispute over the gold reserves. Even Green Party financial expert Gerhard Schick has joined the fray: “I think the question of how much gold is available in an emergency is a valid concern.”

From a purely logistical perspective, though, returning the reserves seems outlandish. One cannot simply pack 1,500 tons of gold into an Airbus A380 super-jumbo jet and fly it back to Germany.

The Bundesbank also objects to this notion for another reason. It says the gold is supposed to act as an emergency buffer. In the extreme situation of a currency collapse, the bankers say that the gold bars could easily and quickly be exchanged on location for pounds or dollars to pay urgent bills.

In a bid to calm the debate, the Bundesbank has pledged to bring back and inspect 150 tons of gold from abroad over the next three years. Furthermore, there are plans to count and weigh the gold bars stored in one of the nine chambers at the Fed in New York — although no date has been set for this.

Bundesbank board member Thiele was also recently in New York where he took a look behind one of the vault doors. He had good news for the members of the parliamentary budget committee: “There was no paper in there, just gold.”

But that’s not enough for CSU politician Gauweiler. He is prepared to put the matter to rest only when the central bank has thoroughly inspected all the German reserves throughout the entire world. His credo: “The Bundesbank is independent, but it can’t do what it wants.”

—–

Translated from the German by Paul Cohen.

* * *

Help keep GATA going

GATA is a civil rights and educational organization based in the United States and tax-exempt under the U.S. Internal Revenue Code. Its e-mail dispatches are free, and you can subscribe at:

http://www.gata.org

To contribute to GATA, please visit:

http://www.gata.org/node/16

OptiHaul Demo

October 31, 2012 by · Leave a Comment 

A demonstration of OptiHaul, an advanced truck and shovel simulation and optimisation software package which allows mine planners to make informed decisions for short to medium term planning.

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Mine Site Technologies Achieves GOST Certification

October 31, 2012 by · Leave a Comment 

Mine Site Technologies continues to make major investments in Eastern Europe and has successfully received GOST certification in Russia for both PED (Personal Emergency Device and ICCL Caplamp) and the ImPact Wi-Fi product suite.

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Freightplus – Heavy Machinery Shipping

October 31, 2012 by · Leave a Comment 

Freightplus specialises in the international movement of heavy machinery.

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OptiHaul-Truck and Shovel Simulation and Optimisation Software

October 31, 2012 by · Leave a Comment 

OptiHaul is an advanced truck and shovel simulation and optimisation software package which allows mine planners to make informed decisions for short to medium term planning.

Read more….

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