Wednesday, November 10, 2010

Stock Market and Commodities Commentary For Wednesday Evening Nov. 10th

The S&P 500 index closed higher on Wednesday and the high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are overbought and are turning bearish hinting that a short term top might be in or is near. Closes below the 20 day moving average crossing at 1189.18 are needed to confirm that a short term top has been posted. If December extends the rally off August's low, the 62% retracement level of the 2007-2009 decline crossing at 1234.75 is the next upside target. First resistance is Tuesday's high crossing at 1224.50. Second resistance is the 62% retracement level of the 2007-2009 decline crossing at 1234.75. First support is the 10 day moving average crossing at 1201.80. Second support is the 20 day moving average crossing at 1189.18.

Crude oil closed higher on Wednesday as it extends the rally off August's low. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term. If December extends the aforementioned rally, the 87% retracement level of May's decline crossing at 90.82 is the next upside target. Closes below the 20 day moving average crossing at 83.55 would confirm that a short term top has been posted. First resistance is today's high crossing at 88.10. Second resistance is the 87% retracement level of May's decline crossing at 90.82. First support is the 10 day moving average crossing at 85.00. Second support is the 20 day moving average crossing at 83.55.

Natural gas closed lower due to profit taking on Wednesday as it consolidates some of the rally off October's low. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term. If December extends the rally off October's low, the 38% retracement level of the June-October decline crossing at 4.362 is the next upside target. Closes below last Thursday's low crossing at 3.743 would confirm that a short term top has been posted. First resistance is today's high crossing at 4.249. Second resistance is the 38% retracement level of the June-October decline crossing at 4.362. First support is last Thursday's low crossing at 3.743. Second support is the reaction low crossing at 3.500.

Gold lower due to profit taking on Wednesday as it consolidated some of its recent gains. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices is possible near term. If December extends this year's rally into uncharted territory, upside targets will now be hard to project. Closes below the reaction low crossing at 1315.60 would confirm that an important top has been posted. First resistance is Tuesday's high crossing at 1424.30. First support is the 20 day moving average crossing at 1359.70. Second support is the reaction low crossing at 1315.60.

The U.S. Dollar closed higher on Wednesday as it extended yesterday's rally above the 20 day moving average crossing at 77.36. The low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. Closes above the reaction high crossing at 78.61 are needed to confirm that a short term low has been posted. If December renews the decline off August's high, the November 2009 low on the weekly continuation chart crossing at 74.21 is the next downside target. First resistance is the reaction high crossing at 78.51. Second resistance is the reaction high crossing at 78.61. First support is last Wednesday's low crossing at 75.24. Second support is the November 2009 low on the weekly continuation chart crossing at 74.21.


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