Wednesday, August 11, 2010

Bears Take Clear Advantage as Crude Oil Closes Below the 20 Day Moving Average

Crude oil closed sharply lower on Wednesday and below the 20 day moving average crossing at 79.10 confirming that a short term top has been posted. The low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are bearish signaling that sideways to lower are possible near term. If September extends today's decline, the reaction low crossing at 75.90 is the next downside target. Closes above the 10 day moving average crossing at 80.59 would temper the near term bearish outlook. First resistance is the 10 day moving average crossing at 80.59. Second resistance is last Wednesday's high crossing at 82.97. First support is today's low crossing at 77.69. Second support is the reaction low crossing at 75.90.

Natural gas closed slightly higher on Wednesday as it consolidates above support marked by July's low crossing at 4.290. The mid-range close sets the stage for a steady opening on Thursday. Stochastics and the RSI are oversold but remain bearish signaling that sideways to lower prices are possible near term. If September extends the decline off last week's high, May's low crossing at 4.140 is the next downside target. Closes above the 20 day moving average crossing at 4.582 would confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 4.582. Second resistance is the reaction high crossing at 4.825. First support is today's low crossing at 4.257. Second support is May's low crossing at 4.140.

The U.S. Dollar closed higher on Wednesday and above the 20 day moving average crossing at 81.93 confirming that a short term bottom has been posted. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are turning bullish signaling that sideways to higher prices are possible near-term. If September extends today's rally, the reaction high crossing at 83.64 is the next upside target. If September renews this summer's decline, the 75% retracement level of the November-June rally crossing at 78.60 is the next downside target. First resistance is today's high crossing at 82.55. Second resistance is the reaction high crossing at 83.64. First support is last Friday's low crossing at 80.17. Second support is the 75% retracement level of the November-June rally crossing at 78.60.

Gold closed higher on Wednesday as it consolidates above the 20 day moving average. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term. If August extends last week's rally, the reaction high crossing at 1220.80 is the next upside target. Closes below the 20 day moving average crossing at 1189.00 would temper the friendly outlook. First resistance is last Friday's high crossing at 1212.10. Second resistance is the reaction high crossing at 1220.80. First support is the 10 day moving average crossing at 1191.60. Second support is the 20 day moving average crossing at 1189.00.

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