Tuesday, September 21, 2010

Stock Market and Commodities Commentary For Tuesday Evening

The S&P 500 index closed lower on Tuesday as it consolidated some of the rally off August's low. The low range close sets the stage for a steady to lower opening on Wednesday. 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, the 75% retracement level of the April-July decline crossing at 1152.70 is the next upside target. Closes below the 20 day moving average crossing at 1089.49 would confirm that a short term top has been posted. First resistance is today's high crossing at 1143.70. Second resistance is the 75% retracement level of the April-July decline crossing at 1152.70. First support is the 10 day moving average crossing at 1116.75. Second support is the 20 day moving average crossing at 1089.49.

Crude oil closed lower on Tuesday as it extends last week's decline. The mid range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term. If October extends the decline off last week's high, August's low crossing at 70.76 is the next downside target. Closes above last week's high crossing at 78.04 are needed to renew the rally off August's low. First resistance is the 10 day moving average crossing at 75.19. Second resistance is last Monday's high crossing at 78.04. First support last Friday's low crossing at 72.75. Second support is August's low crossing at 70.76.

Natural gas closed higher due to short covering on Tuesday and above the 20 day moving average. The high range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are turning bearish signaling that sideways to lower prices are possible near term. If October extends last week's rally, the 38% retracement level of the June-August decline crossing at 4.321 is the next upside target. Closes below Monday's low crossing at 3.806 would temper the near-term friendly outlook. First resistance is last Friday's high crossing at 4.060. Second resistance is the 38% retracement level of the June-August decline crossing at 4.321. First support is Monday's low crossing at 3.806. Second support is August's low crossing at 3.697.

Gold closed higher on Tuesday posting another new all time high as it extends the rally off July's low. Stochastics and the RSI are overbought but are bullish signaling that sideways to higher prices is possible near term. If December extends the rally off July's low, upside targets will now be hard to project following yesterday's rally to a new contract high. Closes below the reaction low crossing at 1237.90 would confirm that a double top with June's high has been posted. First resistance is today's high crossing at 1290.40. First support is the 20 day moving average crossing at 1255.70. Second support is the reaction low crossing at 1237.90.

The U.S. Dollar closed lower on Tuesday extending the decline off August's high. The low range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices are possible near term. If December extends the decline off August's high, March's low crossing at 80.18 is the next downside target. Closes above the 20 day moving average crossing at 82.53 would confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 81.96. Second resistance is the 20 day moving average crossing at 82.53. First support is today's low crossing at 80.42. Second support is March's low crossing at 80.18.

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