Commodity Weekly Technical Outlook

ONG Focus - Technical Written by Oil N' Gold
Nymex Crude Oil (CL)
Crude oil dived further last week and closed below 70 level at 69.87. Break of the medium term trend line support serves as another indication of medium term reversal. Initial bias will remain on the downside this week for 65.05 support first. On the upside, above 71.50 minor resistance will turn intraday bias neutral and bring recovery. But upside should be limited well below 79.04 resistance and bring fall resumption. In the bigger picture, we're favoring the case that medium term rise from 33.2 has completed at 82.0 with bearish divergence condition in daily MACD. The break of medium term trend line support last week affirms this case and should pave the way to 58.32 cluster support (50% retracement of 33.2 to 82 at 57.60) for confirmation. As noted before, rise from 33.2 is treated as part of the correction pattern that started at 147.27. Firmed break of 58.32 support will argue that the down trend from 147.27 might be resuming for another low below 33.2. On the upside, break of 79.04 is needed to invalidate this view, otherwise, outlook will remain bearish.

In the long term picture, there is no change in the view that fall from 147.27 is part of the correction to the five wave sequence from 98 low of 10.65. While the rebound from 33.2 is strong and might continue, there is no solid evidence that suggest fall 147.27 is completed and we're still preferring the case that rebound from 33.2 is merely a corrective rise only. Having said that strong resistance should be seen between 76.77/90.24 fibo resistance zone and bring reversal for another low below 33.2 before completing the whole correction from 147.27.

Comex Gold (GC)
Gold's fall from 1227.5 extended further to as low as 1110.2 last week and the break of 1130.1 support, as well as the sustained trading below the near term channel, indicates that rise from 931.3 has likely made a top already. Initial bias will remain on the downside this week as long as 1148.4 resistance holds. Further decline should be seen to 50% retracement of 931.3 to 1227.5 at 1079.4 next. On the upside, above 1148.4 will turn intraday bias neutral and bring recovery. But upside should be limited below 1227.5 and bring another fall to continue the correction.In the bigger picture, rise from 681 is expected to develop into a set of five wave sequence with first wave completed at 1007.7, second wave triangle consolidation completed at 931.3. Rise from 931.3 is treated as the third wave and has possibly completed at 1227.5 after missing 100% projection of 681 to 1007.7 from 931.3 at 1258. Deeper pull back could now be seen to 1026.9/1072 support zone, or even further to retest 1000 psychological level. But downside should be contained well above 931.3 support and bring up trend resumption.

In the long term picture, rise form 681 is treated as resumption of the long term up trend from 1999 low of 253 after interim consolidation from 1033.9 has completed in form of an expanding triangle. Next long term target is 100% projection of 253 to 1033.9 from 681 at 1460 level. We'll hold on to the bullish view as long as 931.3 structural support holds.

Week Ahead: Stocks Look Ready to Push Past 2009 Highs

By: Patti Domm Executive Editor

Stocks should trend higher in the coming week and are in easy striking distance of a new high for the year.The quadruple options expiration on Friday could add a flurry of volatility, but investors should take encouragement from a recent batch of better economic data that has some economists ratcheting up forecasts for fourth quarter growth. JPMorgan, for one, raised expectations for fourth quarter GDP growth to 4.5 percent from 3.5 percent after upside surprises in inventories, net exports and retail sales.In the coming week, the Fed holds its final meeting of the year, and inflation data, industrial production, jobless claims and housing reports will dominate the economic news. Traders say stocks could meet little resistance in their upward climb, barring no new nasty surprises, like the Dubai World debt restructuring. They also expect the coming week will see even fewer players participating in the markets ahead of year end.

http://www.cnbc.com/id/34386608

JPMorgan Says S&P 500 Will Rise 18% by End of 2010

(Bloomberg) -- The Standard & Poor’s 500 Index will rally 18 percent to 1,300 next year as the economy recovers and Federal Reserve Chairman Ben S. Bernanke holds down interest rates, said Thomas J. Lee, the chief U.S. equity strategist at JPMorgan Chase & Co. The forecast level represents a multiple of 14.4 times the $90 a share the bank estimates the companies in the index will earn in 2011, equity strategists led by Lee in New York said in a report dated yesterday. The S&P 500 trades for 22.2 times its combined profit in the last 12 months, the most expensive level since 2002, data compiled by Bloomberg show.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aAPPUhu11D6s

Strategists Get U.S. Stocks Right, See More Gains: Chart of Day

(Bloomberg) -- Wall Street strategists, who redeemed themselves as equity prognosticators this year, are unanimous in expecting U.S. stocks to rise more next year after a nine-month rally. The CHART OF THE DAY compares the average estimate for the Standard & Poor’s 500 Index, as compiled from Bloomberg surveys, at the beginning of every year since 2005 with the benchmark’s year-end value.Yesterday’s S&P 500 close was 2.2 percent higher than the 1,078 average estimate at the start of this year. In 2008, when the index suffered its biggest full-year loss in seven decades, it trailed the comparable projection by 45 percent.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aS12b5dCPH3w

Options Show S&P 500 Rally in Peril Amid Bearish Bets

(Bloomberg) -- Traders are boosting bets in the U.S. options market that this year’s rally in the Standard & Poor’s 500 Index won’t last. The fourth most-active options to sell the SPDR Trust Series 1 yesterday were December 2010 $55 puts, contracts with so-called strike prices more than 50 percent below the cost of the exchange-traded fund known as the SPY. S&P 500 options to protect against losses in 2010 are 33 percent more expensive than one-month contracts, among the highest premiums in the past five years, according to data compiled by Bloomberg.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=akKQKa.Hbk5M