Wednesday, May 12, 2010

Crude Oil Market Commentary For Wednesday Evening


Crude oil closed lower on Wednesday and is poised to resume last week's decline. The low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term. If June renews last week's decline, the 87% retracement level of the February-April rally crossing at 72.86 is the next downside target. Closes above the 20 day moving average crossing at 82.08 are needed to confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 80.09. Second resistance is the 20 day moving average crossing at 82.08. First support is last Friday's low crossing at 74.51. Second support is the 87% retracement level of the February-April rally crossing at 72.86.

Natural gas closed higher on Wednesday as it extended this week's rally above the 20 day moving average. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. If June extends this week's rally, the 25% retracement level of the October-April decline crossing at 4.438 is the next upside target. If June renews this winter's decline, weekly support crossing at 3.502 is the next downside target. First resistance is today's high crossing at 4.292. Second resistance is the 25% retracement level of the October-April decline crossing at 4.438. First support is the 10 day moving average crossing at 4.042. Second support is last Thursday's low crossing at 3.855.

Gold posted another new all time high on Wednesday as it extends the rally off February's low. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term. If June extends this year's rally into uncharted territory, upside targets are hard to project. Closes below the 20 day moving average crossing at 1172.70 would confirm that a short term top has been posted. First resistance is today's high crossing at 1249.20. First support is the 10 day moving average crossing at 1194.90. Second support is the 20 day moving average crossing at 1172.70.

The U.S. Dollar closed higher on Wednesday as it extends the rebound off Monday's low. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are overbought and are turning bearish hinting that a short term top might be in or is near. Closes below the 20 day moving average crossing at 82.62 are needed to confirm that a short term top has been posted. If June extends this month's rally, weekly resistance crossing at 85.85 is the next upside target. First resistance is last Thursday's high crossing at 85.46. Second resistance is weekly resistance crossing at 85.85. First support is Monday's low crossing at 83.07. Second support is the 20 day moving average crossing at 82.62.



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