Monday, September 13, 2010

Stock Market and Commodities Commentary For Monday Evening

The S&P 500 index gapped up and closed higher on Monday as it extended the rally off August's low. The high range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that additional gains are possible near term. If December extends the aforementioned rally, August's high crossing at 1120.90 is the next upside target. Closes below the 20 day moving average crossing at 1073.22 would confirm that a short term top has been posted. First resistance is today's high crossing at 1118.80. Second resistance is August's high crossing at 1120.90. First support is the 10 day moving average crossing at 1084.13. Second support is the 20 day moving average crossing at 1073.22.

Crude oil closed higher on Monday as it extends the rally off August's low. Profit taking tempered early gains and the mid range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term. If October extends the rally off August's low, the 62% retracement level of the August decline crossing at 78.58 is the next upside target. Closes below the 20 day moving average crossing at 74.43 would temper the near term friendly outlook. First resistance is today's high crossing at 78.04. Second resistance is the 62% retracement level of the August decline crossing at 78.58. First support the 20 day moving average crossing at 74.43. Second support is August's low crossing at 70.76.

Natural gas closed higher due to short covering on Monday while extending the trading range of the past three weeks. The mid range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are neutral to bullish hinting that a short covering rebound is possible near term. Closes above the 20 day moving average crossing at 3.973 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 the reaction high crossing at 3.946. Second resistance is the 20 day moving average crossing at 3.973. First support is August's low crossing at 3.697. Second support is weekly support crossing at 3.225.

Gold closed lower due to profit taking on Monday and below the 10 day moving average crossing at 1248.80 signaling that a short term top might be in or is near. Stochastics and the RSI are overbought, diverging and are turning bearish hinting that additional profit taking is possible near term. Closes below the 20 day moving average crossing at 1240.20 would confirm that a double top with June's high has been posted. If October renews the rally off July's low, June's high crossing at 1267.10 is the next upside target. First resistance is last Wednesday's high crossing at 1263.20. Second resistance is June's high crossing at 1267.10. First support is the 20 day moving average crossing at 1240.20. Second support is the reaction low crossing at 1232.40.

The U.S. Dollar closed sharply lower on Monday and below trading range support crossing at 82.23. The low range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are diverging and are turning neutral signaling that sideways to lower prices are possible near term. If December extends the decline off August's high, 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 last Tuesday's high crossing at 83.29. Second resistance is August's high crossing at 83.96. First support is today's low crossing at 82.02. Second support is August's low crossing at 80.75.

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