Monday, August 2, 2010

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

Crude oil closed sharply higher on Monday and above June's high crossing at 80.82 as it renews the rally off May's low. The high range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are diverging but have turned bullish signaling that sideways to higher prices are possible near term. If September extends the rally off May's low, the reaction high crossing at 84.50 is the next upside target. Closes below the 20 day moving average crossing at 77.26 would temper the near term friendly outlook. First resistance is today's high crossing at 71.77. Second resistance is the reaction high crossing at 84.50. First support is the 10 day moving average crossing at 78.46. Second support is the 20 day moving average crossing at 77.26.

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Natural gas posted a key reversal down due to profit taking on Monday as it consolidated some of the rally off July's low. The low range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term. If September extends the aforementioned rally, the reaction high crossing at 5.082 is the next upside target. Closes below the 20 day moving average crossing at 4.575 would confirm that a short term top has been posted. First resistance is today's high crossing at 5.007. Second resistance is the reaction high crossing at 5.082. First support is the 10 day moving average crossing at 4.668. Second support is the 20 day moving average crossing at 4.575.

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The U.S. Dollar closed lower on Monday as it extends the decline off June's high. The low range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are oversold but remain bearish signaling that additional weakness is possible near term. If September extends the decline off June's high, the 62% retracement level of the November-June rally crossing at 80.47 is the next downside target. Closes above the 20 day moving average crossing at 82.98 are needed to confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 82.33. Second resistance is the 20 day moving average crossing at 82.98. First support is today's low crossing at 80.90. Second support is the 62% retracement level of the November-June rally crossing at 80.47.

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Gold closed higher due to short covering on Monday as it continues to rebound off the 50% retracement level of this year's rally crossing at 1158.30. Stochastics and the RSI are oversold but turning bullish hinting that a short term low might be in or is near. Closes above the 20 day moving average crossing at 1189.90 are needed to confirm that a short term low has been posted. If August renews the decline off June's high, the 62% retracement level of the aforementioned decline crossing at 1132.70 is the next downside target. First resistance is the 20 day moving average crossing at 1189.90. Second resistance is today's high crossing at 1191.80. First support is last Wednesday's low crossing at 1155.60. Second support is the 62% retracement level of the aforementioned decline crossing at 1132.70.

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