Tuesday, August 31, 2010

Bears Maintain Near Term Technical Advantage as Traders Wait For Friday's U.S. Jobs Report

The U.S. stock indexes closed firmer today and saw some short covering to end the month. Bears still have the overall near term technical advantage. Traders are awaiting Friday's key U.S. jobs report. Trading could be quieter up until Friday morning. Remember that the months of September and October have been historically unkind to the stock market bulls. Friday's jobs report and the stock market's reaction to it could set the tone for trading in the stock indexes during the month of September.

Crude oil closed down $2.95 at $71.75 a barrel today. Prices closed near the session low today as bears have regained fresh downside technical momentum. A less than rosy economic assessment from the Fed in its FOMC minutes helped to sink crude today. Crude oil bears have the overall near term technical advantage.

Natural gas closed down 0.2 cents at $3.81 today. Prices closed near mid-range today. The bears still have the solid overall near term technical advantage. A 2 1/2 month old downtrend is still in place on the daily bar chart. The next upside price objective for the bulls is closing prices above solid technical resistance at $4.20.

The U.S. dollar index closed up 3 points at 83.59 today. Prices closed nearer the session high today. Bulls and bears are still on a level near term technical playing field. Bulls' next upside price objective is to close prices above solid technical resistance at 85.00.

Gold futures closed up $11.80 at $1,251.00 today. Prices closed near the session high, hit a fresh two month high, scored a bullish "outside day" up on the daily bar chart and posted a significantly bullish monthly high close today. Bulls gained fresh upside technical momentum today and are now poised to challenge the all time high of $1,270.60, scored in June. A weaker U.S. dollar and some fresh safe haven buying interest also helped to support the gold market today.

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