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Strategies & Market Trends : John Pitera's Market Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: nspolar who wrote (9747)	7/29/2008 4:20:15 PM
From: John Pitera	Respond to of 33421

Great work as usual.... best of good fortune with the root canal. John

To: nspolar who wrote (9747)	7/29/2008 4:27:48 PM
From: John Pitera	Read Replies (1) \| Respond to of 33421

Natural Gas-- time to cover shorts and explore the long side in the futures. Commentary for energy complex: Both Crude and Natural Gas reached significant highs and the tops are in in both markets for 2008. This is definitely the case for Natural Gas and highly likely for Crude as well. The Crude forward strip is incredibly tight with the nearby most active month of Sept 2008 down $2 and change at $122.21. Nov 2008 through Dec of 2009 is a buck or so higher and the Jan of 2013 through Dec 2016 all trades with a 118 handle. The fact that the entire strip is so horizontal and the end of the strip is so tight shows the real lack of conviction on the long term pricing of crude. The Natural Gas long dated spread trade of greatest interest is the Dec 2012 with an open interest of 4062 trading at 9.19 up .47 today, while Dec 2013 with an open interest of 7212 is trading at 9.037 the spread has improved 2 cents in favor of Dec 2013 leg. The massive sell off in Natural Gas from the July 2nd high of 13.77 down to today's low of 8.95 has been so violent that it has driven many of the spread traders to the sidelines. All in all, today is an outstanding day to be covering shorts in natural gas contracts and looking to go long at this 9.00 area with a stop 8.73. This is a big time support area for NG and the technical traders will be squaring up and exploring the long side. Crude has risk to 111 based on the longer term Fibonacci retracement patterns, however we should be expecting some traction in crude with a rebound in NG. In this instance, I would believe that NG has got to have a rebound rally and crude traders should be looking for their lead signal on the rally in NG to generate short covering in crude and "value" buying in Crude. Global Growth continues to moderate and Central Banks across the Global have been holding Their key lending rates in place and are talking of the need of possible increases to combat global inflationary price pressures. We have seen weakness now for a number of weeks in the key commodity currencies of the world. Indeed the $CAD, put in a spike low near .92 in Nov of 2007 and the symetrical triangle the loonie has since the Jan 08 high of 1.0375 and the Feb 08 low of .9713 looks like it will lead to an upside breakout with the $/CAD moving toward the 1.0775 - 1.0873 area. The Eur/$ is bogged down in a trading range the past several months as the richly valued EUR really reduces the EuroZone's Global Competitive economic position. The EUR/JPY continues to show signs of a major top on the daily charts. As the Chinese RMB continues it's Macro appreciation, the JPY should be pulled along for the move especially on the EUR/JPY cross. John