Don Dawson
Online Trading Academy
We have all been watching this Stock market Bull run since the 2009 lows were in place. And of course that means many pundits have been trying to pick when it will end. Unfortunately for them and great for us, they have been wrong as usual. Oh, why is it good for us? If they are selling into this rally they will be providing liquidity for us trend followers. But eventually the Stock Market will run out of buyers and then there will be more sell market orders than buy market orders and the market will correct. When? Who knows!! Our charts will tell us when the trend changes and we can then sell into the bear market rallies.
While the Federal Reserve’s Quantitative Easing policy helped to provide liquidity to the markets during this bull market it also provided capital for international and domestic infrastructure to be built. To have the ability to build this the world needed energy products, namely Crude Oil.
There are two primary oil markets in the world – Brent Crude Oil and West Texas Intermediate Oil (WTI). Brent is a product of the North Sea and is traded on the Inter-continental Exchange (ICE) and West Texas Intermediate is a product of North America mainly Cushing, Oklahoma and trades on the Chicago Mercantile Group Exchange (CME).
Brent has been the benchmark of the oil markets for many years. Brent is a better quality of oil and requires less refining than WTI. Over the last 4 years the Spread has been as wide as $23 premium to Brent. Today it is back to a more normal parity. When a market can carry a premium like the Brent did to other oil products you know it is in high demand around the world.
Energy products are in such high demand around the world all year long and this is during normal times. But imagine when there is extra demand? What do you think that does to the price structure of energy products? Or what would happen if there was all of a sudden lack of demand?
To measure this demand we can follow the price structure of these products by looking for contango and backwardation in their prices.
Table 1 is an example of the price structure of both WTI and Brent on the day this article was written.
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Editors’ Picks
EUR/USD hovers around 1.0700, eyes on US first-quarter GDP data
EUR/USD hovers around the 1.0700 psychological level on Thursday during the early Asian session. The modest uptick of the major pair is supported by the softer US Dollar. Later in the day, Germany’s GfK Consumer Confidence Survey for April will be released.
GBP/USD snaps the two-day winning streak above 1.2450, eyes on US GDP data
The GBP/USD pair snaps the two-day winning streak near 1.2460 amid the modest rebound of the US Dollar on Thursday during the early Asian session. The release of the US Gross Domestic Product for the first quarter will take center stage on the day.
USD/JPY finds its highest bids since 1990, near 155.50
USD/JPY keeps breaking into its highest chart territory since June of 1990 early Thursday, testing 155.50 for the first time in 34 years as the Japanese Yen remains vulnerable, despite looming Japanese intervention risks. Focus shifts to Thursday's US GDP report and the BoJ decision on Friday.
Editors’ Picks
AUD/USD hovers around 0.6500 amid light trading, ahead of US GDP
AUD/USD is trading close to 0.6500 in Asian trading on Thursday, lacking a clear directional impetus amid an Anzac Day holiday in Australia. Meanwhile, traders stay cautious due ti risk-aversion and ahead of the key US Q1 GDP release.
USD/JPY finds its highest bids since 1990, near 155.50
USD/JPY keeps breaking into its highest chart territory since June of 1990 early Thursday, testing 155.50 for the first time in 34 years as the Japanese Yen remains vulnerable, despite looming Japanese intervention risks. Focus shifts to Thursday's US GDP report and the BoJ decision on Friday.
Gold price lacks firm intraday direction, holds steady above $2,300 ahead of US data
Gold price remains confined in a narrow band for the second straight day on Thursday. Reduced Fed rate cut bets and a positive risk tone cap the upside for the commodity. Traders now await key US macro data before positioning for the near-term trajectory.
Injective price weakness persists despite over 5.9 million INJ tokens burned
Injective price is trading with a bearish bias, stuck in the lower section of the market range. The bearish outlook abounds despite the network's deflationary efforts to pump the price. Coupled with broader market gloom, INJ token’s doomed days may not be over yet.
Meta Platforms Earnings: META sinks 10% on lower Q2 revenue guidance Premium
This must be "opposites" week. While Doppelganger Tesla rode horrible misses on Tuesday to a double-digit rally, Meta Platforms produced impressive beats above Wall Street consensus after the close on Wednesday, only to watch the share price collapse by nearly 10%.
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