Monday, May 17, 2010

Crude Oil, Natural Gas, Gold and Dollar Commentary For Monday Morning

Crude oil was higher due to short covering overnight as it consolidates some of the decline off April's high. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term. If June extends the decline off April's high, weekly support crossing at 69.50 is the next downside target. Closes above the 20 day moving average crossing at 80.26 are needed to confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 76.15. Second resistance is the 20 day moving average crossing at 80.26. First support is the overnight low crossing at 69.82. Second support is weekly support crossing at 68.50.

Natural gas was higher overnight and is poised to extend last week's rally. Stochastics and the RSI remain bullish signaling that additional gains are possible near term. If June extends last week's rally, the reaction high crossing at 4.421 is the next upside target. Closes below the 10 day moving average crossing at 4.153 would temper the near term friendly outlook in the market. First resistance is last Thursday's high crossing at 4.414. Second resistance is the reaction high crossing 4.421. First support is the 10 day moving average crossing at 4.153. Second support is this month's low crossing at 3.855.

The U.S. Dollar was higher overnight as it extends this year's rally. Stochastics and the RSI are overbought but are bullish signaling that sideways to higher prices are possible near term. If June extends this year's rally, the 87% retracement level of 2009's decline on the weekly continuation chart crossing at 87.79 is the next upside target. Closes below the 20 day moving average crossing at 83.41 are needed to confirm that a short term top has been posted. First resistance is the overnight high crossing at 87.21. Second resistance is the 87% retracement level of 2009's decline on the weekly continuation chart crossing at 87.79. First support is the 10 day moving average crossing at 84.95. Second support is the 20 day moving average crossing at 83.41.

Gold was steady to slightly lower overnight as it consolidates some of this month's rally. Stochastics and the RSI are overbought, diverging 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 1185.20 are needed to confirm that a short term top has been posted. If June extends this year's rally into uncharted territory, upside targets will now be hard to project. First resistance is last Friday's high crossing at 1249.70. First support is the 10 day moving average crossing at 1210.00. Second support is the 20 day moving average crossing at 1185.30.

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