“Ratings agency Moody’s has cut its price outlook for the both Brent crude and WTI, believing the rise in prices will take place at a much slower pace than originally forecast as oversupply and demand issues show no signs of waning.”

“Moody’s expects both prices (Brent & WTI) to rise by $7 per barrel in 2017, which is down $5 per barrel from its prior forecast.”

…..watch video or read summary HERE

“China has been busy buying up more oil because they are smarter than a 5th grader. They know that the USD will slip back because it always does, global economies are going to get stronger and everyone is going to be looking for anyone that is growing refinery capacity. That means at some point it’s not going to be about who can produce the most oil, but who has the most oil in hand to refine and produce commercial fuels for everyone. In effect, becoming the Tony Montana of oil.”

…continue reading HERE

While other commodities are floundering or completely collapsing in this market, lithium—the critical mineral in the emerging battery gigafactory war—is poised to explode, and going forward Nevada is emerging as the front line in this pending American lithium boom.

Most of the world’s lithium comes from Argentina, Chile, Bolivia, Australia and China, but American resources being developed by new entrants into this market have set up the state of Nevada to become the key venue and proving ground for game-changing trade in this everyday mineral. Nevada is about to get a boost first from Tesla’s upcoming battery gigafactory, and then from all of its rivals.

For several years, experts have been predicting a lithium revolution, and while investors were being coy at first, the reality of the battery gigafactories is now clear, and nothing has hit this home more poignantly than Tesla’s recent supply agreements with lithium providers who will be the first beneficiaries of this boom, followed by a second round of lithium brine developers that are climbing quickly to the forefront.

As Jeb Handwerger—founder of Gold Stock Trades—recently told the Resource Investor....continue reading HERE

After weeks of floundering in the mid-$40s per barrel, a new rally for crude oil got underway this week. WTI jumped to $50 per barrel and Brent is now over $53 per barrel. There are several reasons behind the rally, some of which we have touched on before. U.S. oil production is declining, despite confusing weekly data from the EIA that sometimes suggests otherwise. The rig count fell sharply last week, which underpinned the notion that the sector is contracting.

November Crude Oil futures opened the week higher and never looked back. This week’s rally was triggered by a technical chart pattern and fueled by a number of fundamental events.

The conditions for the rally started to build on Friday, October 2. On that day, data was released showing a weekly drop in the number of active U.S. drilling rigs to their lowest level in more than 5 years.

Oil was drifting lower into the release of the rig data from Baker Hughes Inc. A weaker-than-expected U.S. Non-Farm Payrolls report early Friday was the catalyst behind the weakness since it signaled the potential for weaker energy demand, pushing prices lower.

According to Baker Hughes, the active rig count fell by 26 to 614 as of October 2. The total active rig count, which includes natural gas, fell 29 rigs to 809. With the lowest overall rig count since 2002, traders described the “big drop” as “definitely bullish.”

Some energy economists went as far as saying that the low rig count is an indicator of limited capital for drilling this quarter. Another potentially bullish occurrence.

The weaker-than-expected U.S. jobs report was perceived as bearish to oil prices initially. This was because it could lead to a drop in incremental demand growth, leaving the market with flat-demand into mid-2016. However, losses were limited because the U.S. Dollar dropped on the news, leading to speculation that foreign demand would increase.

The market received a boost over the weekend, leading to a strong opening on October 5 after Saudi Arabia cut pricing for November oil sales to Asia and the U.S. as the world’s largest crude oil exporter sought to keep its supply competitive with rival suppliers amid sluggish demand.

Traders reacted positively at the start of the week to the Saudi price cut, the drop in the rig count and speculation that China was preparing to implement additional stimulus. Global equity markets also strengthened along with commodity-linked currencies and severely oversold commodity markets. Demand for risky assets increased, underpinning crude prices.

Russia came into the crude oil picture this past week. Firstly, it started bombing ISIS positions in Syria, helping to put a slight speculative bid under the market. Secondly, it said it would not cut-back from huge crude output levels that have helped drive prices lower. Russia also came out strongly against rumors that it was preparing to join OPEC, with an analyst stating “there is no possibility of Russia cooperating with OPEC to manage supply and there is zero possibility of Russia ever joining OPEC.”
Speculators chose to ignore this last statement as the market rallied early this week after Russia said it was ready to meet with other producers to discuss the market. Russia also set up a separate meeting with Saudi officials at the end of October.

Prices were supported by the news of the Russian meeting with OPEC and Saudi Arabia. While speculators believe these talks may lead to a cut in output, several analysts stated that the geopolitical tension created by Russian cooperation with Syria probably means OPEC will not agree to any production cuts. Nonetheless, speculators liked the news and shorts were worried enough about the possibility of cooperation between the Russians and the Saudis to cut positions.

In summary, traders chose to ignore this week’s potentially bearish U.S. Energy Information Administration’s weekly crude oil inventories report. Instead they decided that Russian willingness to cooperate with OPEC and the weaker U.S. Dollar are reasons enough to speculate on the long side of the market.

Crude oil is currently being supported by a bullish chart pattern on the daily chart and a potentially bullish chart pattern on the weekly.

The daily chart turned bullish during the week-ending October 2 when prices crossed to the bullish side of a long-term downtrending angle. Buy stops were hit and speculative buyers came in to drive the market to the bullish side of the angle near $44.28.

The market accelerated to the upside when the swing top at $47.10 was taken out with conviction. If the upside momentum continues then look for the rally to extend into the next major top at $50.04. This is followed by a major 50% level at $50.69.

The 50% level at $50.69 shows up on both the daily and weekly charts. Trader reaction to this price is likely to determine the direction of the market over the near-term.

Crossing to the bullish side of this level will signal the presence of buyers. This could fuel a rally into $53.56. A failure to overcome $50.69 will indicate the presence of sellers. This could lead to a retracement back to $44.28 over the near-term.

Watch the price action and read the order flow at $50.69 this week, if tested. Trader reaction to this level will tell us whether the bulls or the bears are in control.

related: Bullish Sentiment Finally Returns To The Markets

Anxiety is a thin stream of fear trickling through the mind. If encouraged, it cuts a channel into which all other thoughts are drained. ~ Arthur Somers Roche

Once upon a time, in the good old days, before QE changed everything, any signs of strength from copper could be construed as a sign that the economy was on the mend. After QE, this story came to an end, and a new reality came into play. The Fed manipulated the markets in favour of short-term gains through what could be determined as borderline illegal monetary policy; a policy that has maintained an ultra-low interest rate environment that favours speculators and punishes savers.

In the past, the financial markets would have marched more or less to the same drumbeat as copper. The chart below illustrates that this no longer holds true. Instead of crashing with copper, the financial markets soared to new highs.

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One wonders, what will unfold when copper does finally put in a bottom? Will the financial markets rally in unision once again with Doctor copper, or diverge as they have done for the past several years. Copper is issuing rather strong signs that a bottom could be close at hand. Our, trend indicator has not turned bullish yet, but it is dangerously close to issuing a bullish signal. There are, however, several technical indicators flashing positive divergence signals, and this could be construed as a bullish development.

The technical outlook

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Failure to hold above 2.40 will most likely result in a test of the 2.20 ranges. The ideal setup would be for copper to trade to new lows, and trigger a buy signal in the process. Generally speaking, the elite players love to create the illusion that the market is ready to break out. This ploy is known as a head fake; a move set to fool regular market technicians and the masses into thinking a bottom is in place. If you take the time to look at long term charts, you will see how splendidly this ruse has worked over the decades. The market in question does initially rally, but then it breaks down, the early bulls panic and dump everything. This usually triggers a fast move to new lows and then the smart money rushes in and starts to buy, which then ushers in a more sustainable bottom. Based on this premise, one could argue that this trick was employed in February of 2015. The markets rallied into May and then broke down again. If you look at the above chart, you will notice that this has occurred before, so one cannot put faith on this factor alone. Other factors have to come into play and it looks like those other factors could be coming into play now; we will mention them shortly. Our goal has never been to predict the exact bottom in any market; an endeavour we feel that is best left to fools with an inordinate appetite for pain. We wait for the market to issue strong signals that a bottom is in or is close at hand. Sometimes this means getting in a bit early and sometimes it means getting in a bit later. The idea should be to catch the main move and not obsess on trying to get in at the exact bottom. A monthly close above 2.50 would be a strong signal that that a bottom is in place and that Copper is attempting to mount a strong rally.

Other factors that could be viewed as bullish developments

• Copper prices are trading in the extremely oversold ranges; for the past decade copper has traded above 2.40. The only exception was the financial crisis of 2008.

• FCX has stated it’s going to suspend operations at several of its North American mines. It will suspend operations at its Miami mine In Arizona, reduce production by 50% at its Tyrone mine in New Mexico and adjust productions at other U.S. sites.

• Glencore PLC, a major copper producer, shocked the markets stating it would suspend production at two locations for 18 months. Two mines (the Katanga and the Mopani mines) are located in the Democratic Republic of Congo and Zambia. These two mines account for roughly 1.9%- 2% of the global output of copper.

• Chile’s state-owned Codelco has gone on record stating that they will “cut costs to the bone”. They have also delayed many expansion projects; two notable expansion projects that have been delayed are at Chuquicamata and Andina complex.

• Numerous key technical indicators are trading in the extremely oversold ranges and many have triggered positive divergence signals which could be construed as a bullish development.

• The mantra out there for a while has been that China is in deep trouble. Thus, it must have come as a shock to many bearish analysts that China imported 350,000 metric tons of copper, up 4% from the same period last year. This is something to pay attention to as it could be the beginning of a new trend. China accounts for roughly 45% of the total copper demand. Analysts are now offering diverging stories, with some reversing course and stating that there could be a copper deficit this year, while others continue to stick with their predictions that there will be an oversupply of copper until 2016. Regardless of the outcome, diverging opinions are a good sign as it indicates that the experts really know nothing. Knowing nothing is usually a signal that some sort of turnaround is in the works.

• Additionally, while Chinese imports of refined and semi-refined copper products were flat in August, its imports of concentrates surged approximately 20% from a year ago, and over 18% from the previous month. Could this be the beginning of a new trend.

Conclusion

A plethora of factors such as power outages, extremely bad weather, planned cuts by many of the largest mines in the world, strikes, etc., could potentially push this market into a deficit earlier than many experts assert. This would pave the way for price gains much earlier than expected. Experts are infamous for coming to the party late and leaving way too early. While the action in the copper markets looks promising, copper is still not out of the woods; a monthly close above 2.50 would serve as the first strong bullish confirmation that copper is getting ready to mount a sustainable rally. Our trend indicator has not turned bullish yet, but it is dangerously close to doing so. Once it turns bullish, we will start to look at this sector in a more aggressive manner. As the market is extremely oversold and there are signs of a potential reversal, it would make sense to look at some of the stronger plays in this sector. SCCO and FXC are examples of two decent plays in this sector. One could also go long via COPX (Global X Copper Miners ETF) and JJC (iPath DJ-UBS Copper). We advised our subscribers to get into FXC at 9.00 and if the sector continues to show signs of strength, we will look to add to our position and deploy additional funds into new stocks in this sector.

History clearly illustrates that when an asset is cheap and sentiment is negative that the time to buy is close at hand. Mass psychology dictates that you should be wary when the masses are joyous and overjoyed when they are not. The crowd is decidedly negative and so an opportunity could be in the air.

Indecision is debilitating; it feeds upon itself; it is, one might almost say, habit-forming. Not only that, but it is contagious; it transmits itself to other. ~ H. A. Hopf