Thursday, May 6, 2010

Crude Oil Bulls Continue to Take on Chart Damage....Bears Hold Clear Advantage


Crude oil closed down $3.53 at $76.44 a barrel today. Prices closed nearer the session low today and hit a fresh three month low of $74.58 amid the EU debt crisis that is playing out and which has rattled most markets. A stronger U.S. dollar index and meltdown in the stock markets were main bearish factors for crude today. Serious near term chart damage has been inflicted in crude this week, to suggest a near term market top is now in place.

Natural gas closed down 7.5 cents at $3.917 today. Prices closed nearer the session low today, scored a bearish "outside day" down on the daily bar chart and scored a fresh contract low. The bears have the solid near term technical advantage. The next upside price objective for the bulls is closing prices above solid technical resistance at $4.25.

The U.S. dollar index closed up 84 points at 85.04 today. Prices closed nearer the session high today and hit another fresh contract and 12 month high. European Union sovereign debt troubles will continue to support the dollar index. The bulls have the solid overall near term technical advantage. There are still no early technical clues to suggest a market top is close at hand.

Gold closed up $28.00 at $1,203.00 today. Prices closed near the session high today and hit a fresh five month high of $1,209.20. Safe haven buying amid the European Union debt crisis is fueling strong gains in gold. A stronger U.S. dollar and lower crude oil prices failed to limit the strong buying interest in gold today. A meltdown in the U.S. stock market in afternoon trading gave gold prices an additional boost. Gold bulls have the solid near term technical advantage and gained more upside technical momentum today.

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