Crude Drops $2.51 on Technical Selling

The Euro managed to regain an early session sell-off which was triggered after today’s better than expected U.S.economic data. Last trade $1.4315. As for the data; the Case Shiller Home Price Index gave economists a breath of fresh air clocking in with a price decline of only 15.44%. This was significantly better than the Street estimate of -16.4%; and the second month of improvement.

Today’s other report; Consumer Confidence also came in at a level far above expectations. Confidence was reported at 54.1. The Street expected 47.9. That is a very large positive variance.

Metals ended the day a shade higher in the midst cross currents of a weaker Dollar, but also sharply lower Oil. Silver finished the New York trading session up 9 cents at $14.29. Gold edged up $2.00 closing at $944.00. Palladium rose $.4.00 to $286.00. Platinum ended at $1238.00 down $2.00. Volume was surprisingly light given today’s almost $3.00 fall in the price of Crude. Energy traders point to technical selling after Oil failed to break and hold the psychological $75 level. A wave of pre-programmed sell orders were triggered once Crude slipped back below the $75 mark. Last trade $71.86 down $2.51 per barrel.

Stocks rallied on the data with the Dow jumping almost 100 points. Things have since quieted down on profit taking with the Dow presently up 46 points at 9555. When New York trading resumes tomorrow market participants will have three new pieces of data to digest. Durable Goods, New Home Sales for July, and the Weekly Oil Inventories will be the focus.

Crude Drops $3.85 Per Barrel – USD Explodes to the Upside

The metals complex closed broadly lower today led by an almost $4.00 decline in the price of Oil. Given the inverse correlation between the U.S Dollar and the price of Oil; the Greenback exploded to the upside with the Euro losing about 1.5 cents against our Dollar. Last on the Euro $1.4020.

Energy traders got hit by a double whammy today with speculators continuing to exit the markets fearing new potential treading restrictions. The selling pressure was compounded by a much larger than expected spike in the Weekly Oil Inventories. Crude supplies surged 5.1 million barrels causing an acceleration in selling. Last trade $63.38 down $3.85 per barrel.

The commodities complex including the metals turned sharply lower in sympathy. Silver was off 46 cents at $13.32. Gold lost an even $10.00 closing at $928.00. Palladium finished at $255.00 down $7.00. Platinum closed at $1173.00 off $26.00. Volume was lighter than the price declines indicated.

In the stock market a continuous stream of under performing corporate earnings and a disappointing Durable Goods Report has the Dow lower by 80 points with two hours left in the day. Durable Goods clocked in with a decline of 2.5%; substantially worse than the estimated decline of .6%. Furthermore; a luke warm reception to today’s Treasury note auction served to keep pressure on stocks. When trading gets underway tomorrow, participants will have the Initial Weekly Jobless Claims to help steer trading direction.

Crude Stayed Under Pressure Overnight

Crude Oil continued to stay under pressure in overnight trading on growing concerns over potential trading restrictions in the energy markets. Click here for a better understanding of the perceived problem surrounding oil speculation: CFTC Considers strict limits in energy trading. Snipped from the article:

“The CFTC’s hearings came amid dramatic changes in energy prices and the Obama administration’s call to limit exotic derivatives trading. Oil futures traded on the New York Mercantile Exchange jumped to almost $150 a barrel last year, only to fall back to below $40 this spring before rising again to $70.”

Another snip from the end of the article: ” Steven Strongin, managing director of Goldman Sachs, one of the biggest commodities traders, said last week in a Senate committee hearing that “attempts to regulate volatility have rarely — if ever — succeeded.” “Yet they often have unintended and significant consequences,” said Strongin.”

Crude is now trading at $65.69 down another $1.54 per barrel.

Precious metals are trading lower in sympathy. Silver is $13.65 down 13 cents. Gold is $2.00 lower at $936.00. Palladium slipped $2.00 to $260.00. \Platinum is off $10.00 and trading at $1189.00.

In the currency markets Euro traders seem to be keying off the Oil /Dollar relationship rather than today’s today’s U.S. economic data where Wall Street expects to see weakening in Durable Goods. Durable Goods are the more expensive items we purchase; such as furniture, appliances, and autos. Since they are expensive consumers’ willingness to buy them is closely correlated to their economic outlook and confidence. Wall Street expects to see a .6% decline compared to May’s surprising rise of 1.8%. As for the Euro, it is currently trading down another 35/100ths of U.S cent at $1.4134.

In the stock market the Dow ended with only a marginal decline of 11 points yesterday. The insignificant decline was surprising given the pronounced drop in consumer confidence. This morning the Dow is being called to open 24 points lower on anxiety in advance of this morning’s Durable Goods report. Traders are all but ignoring the freshly announced long term alliance between Microsoft and Yahoo.

In other matters; at 2pm eastern the Fed will release it’s monthly Fed Beige Book which is an anecdotal compilation of business conditions within the 12 Federal Reserve districts. This may cause some added volatility in the final hours of stock trading today.

Sell-Off in the Oil Futures Markets

The metals with the exception of Palladium closed broadly lower today in a knee jerk reaction to a sell-off in the oil markets and a sympathetic counter surge in the Dollar. To explain today’s events: It started with traders running for the exits in the oil futures markets in response to today’s Congressional hearing surrounding possible restrictions on oil speculation. Congress is putting on a full court press in an effort to stop the volatility in oil trading by limiting speculation. As a result speculators ran for cover. Crude Oil fell $1.48 per barrel to $66.90.

Currency traders pushed up the Dollar in sympathy with the decline in Oil. The Euro gave up it’s early session half cent gain then continued falling by 46/100ths of cent to it’s present level of $1.4169.

Metals traders got spooked pushing the metals complex lower in reaction. Silver closed at $13.78 off 25 cents. Gold fell $15.00 to $938.00. Palladium managed to end the session with a $2.00 gain at $262.00. Platinum dropped by $27.00 to $1189.00. Volume was moderately heavy.

Stocks turned lower today on mixed economic data and another barrage of bad corporate quarterly earnings results. As for the data; the Case Shiller Home Price Index clocked in with a smaller than feared price decline. Prices fell an average of 17.06%. The Street expected the drop to be 17.9%. That was the good news.

The bad news came when Consumer Confidence was reported at 46.6; worse than the estimate of 49. The one two punch of confidence and earnings has the Dow currently down 56 points with two hours left in the trading day. Tomorrow the calendar remains active with Durable Goods, the Weekly Oil Inventories, and the Fed Beige Book.