Tuesday, September 7, 2010

Markets Close Lower, Bulls Maintain The Advantage For Wednesday Morning

The S&P 500 index closed lower due to profit taking on Tuesday as it consolidates some of last week's rally. The low range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI remain bullish signaling that additional gains are possible near term. If September extends last week's rally, August's high crossing at 1127.50 is the next upside target. Closes below the 10 day moving average crossing at 1067.21 would confirm that a short term top has been posted. First resistance is today's high crossing at 1107.10. Second resistance is August's high crossing at 1127.50. First support is the 20 day moving average crossing at 1074.61. Second support is the 10 day moving average crossing at 1067.21.

Crude oil closed lower on Tuesday due to profit taking but remains above the 10 day moving average crossing at 73.66. The mid range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term. Closes above the reaction high crossing at 75.58 are needed to confirm that a short term low has been posted. If October renews the decline off August's high, May's low crossing at 70.35 is the next downside target. First resistance is the 20 day moving average crossing at 74.85. Second resistance is the reaction high crossing at 75.58. First support is August's low crossing at 70.76. Second support is May's low crossing at 70.35.

Natural gas posted an inside day with a lower close on Tuesday but remains above the 10 day moving average crossing at 3.844. The mid range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI are turning bullish hinting that a short covering rebound is possible near term. Closes above the 20 day moving average crossing at 4.048 are needed to confirm that a short term low has been posted. If October renews this year's decline, weekly support crossing at 3.225 is the next downside target. First resistance is last Friday's high crossing at 3.946. Second resistance is the 20 day moving average crossing at 4.048. First support is August's low crossing at 3.697. Second support is weekly support crossing at 3.225.

Gold closed higher on Tuesday and above the 87% retracement level of the June-July decline crossing at 1253.30 as it extends the rally off July's low. Stochastics and the RSI are overbought, diverging but are neutral to bullish signaling that sideways to higher prices are possible near term. If August extends the rally off July's low, June's high crossing at 1267.10 is the next upside target. Closes below the 20 day moving average crossing at 1234.40 are needed to confirm that a short term top has been posted. First resistance is today's high crossing at 1260.30. Second resistance is June's high crossing at 1267.10. First support is the 10 day moving average crossing at 1245.60. Second support is the 20 day moving average crossing at 1234.40.

The U.S. Dollar gapped up and closed higher on Tuesday as it consolidated some of the decline off August's high. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices are possible near term. If December extends last week's decline, August's low crossing at 80.75 is the next downside target. If December renews the rally off August's low, the reaction high crossing at 84.94 is the next upside target. First resistance is today's high crossing at 83.29. Second resistance is August's high crossing at 83.96. First support is last Friday's low crossing at 82.23. Second support is August's low crossing at 80.75.

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