Thursday, October 21, 2010

Markets Close Mixed as Commodity Bulls Fight The Stronger Dollar

The U.S. stock indexes closed mixed today. The stock index bulls still have the overall near term technical advantage as price uptrends are still in place on the daily bar charts. Stock index bulls have been very pleased with price action so far this autumn, a time which is normally not favorable to market bulls. My bias is that prices will trade mostly sideways, but with a slight upside bias, into the end of the year.

Crude oil closed down $1.91 at $80.63 a barrel today. Prices closed nearer the session low today. A rebounding U.S. dollar pressed the crude market lower today. Trading has turned very choppy. Bulls and bears are on a level near term technical playing field.

Natural gas closed down 13.3 cents at $3.76 today. Prices closed nearer the session low today and prices hit another fresh contract low. The bears have the solid overall near term technical advantage.

Gold futures closed down $19.70 at $1,324.50 today. Prices closed near the session low today and hit a fresh two week low. Profit taking, a firming U.S. dollar index and lower crude oil prices combined to pressure gold today. Prices also scored a bearish "outside day" down on the daily bar chart, whereby the high was higher and low was lower than the previous session's trading range, with a lower close. Some near term technical damage was inflicted today as a 2 1/2 month old uptrend on the daily bar chart was at least temporarily negated today to begin to suggest that a near term market top is in place. Bulls do still have the overall near term and longer term technical advantage, but have faded this week and need to show fresh power soon.

The U.S. dollar index closed up 27 points at 77.69 today. Prices closed near the session high today and saw short covering in a bear market. Dollar index bears still have the overall near term technical advantage.


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