Wednesday, December 8, 2010

Is THIS Oil Rally For Real?

Every time crude oil has shown the ability to rally in 2010 experienced commercial traders have scratched their heads in disbelief as tankers fill with crude oil continue to stack up in ports and harbors around the world. Never have we seen oil rally in this way when there has been such a glut of inventory.

Is it different this time? Will the "Obama Claus" rally push crude oil [and commodities in general] through the critical 90+ levels? It's looking like these markets have played out their run and light volume December trading is about to set in. Swing traders and investors beware, this looks like a day traders market for December. Here's your trading numbers for Wednesday....


Crude oil was lower due to profit taking overnight as it consolidates some of the rally off November's low. Stochastics and the RSI are overbought and are turning neutral to bearish hinting that a short term top might be in or is near.

Closes below the 20 day moving average crossing at 85.30 would confirm that a short term top has been posted. If January extends the rally off November's low, May's high crossing at 93.29 is the next upside target.

First resistance is Tuesday's high crossing at 90.76
Second resistance is May's high crossing at 93.29

Crude oil pivot point for Wednesday morning is 89.16

First support is the 10 day moving average crossing at 86.75
Second support is the 20 day moving average crossing at 85.30

Natural gas was higher overnight as it consolidates some of Tuesday's decline. Stochastics and the RSI are diverging but are bullish signaling that sideways to higher prices are possible near term.

If January extends the rally off November's low, the 38% retracement level of the June-November decline crossing at 4.654 is the next upside target. Closes below the 20 day moving average crossing at 4.267 would confirm that a short term top has been posted.

First resistance is Tuesday's high crossing at 4.545
Second resistance is the 38% retracement level of the June-November decline crossing at 4.654

Natural gas pivot point for Wednesday morning is 4.440

First support is the 10 day moving average crossing at 4.345
Second support is the 20 day moving average crossing at 4.267

Gold was lower due to profit taking overnight as it consolidates some of the rally off the mid-November low. Stochastics and the RSI are becoming overbought, diverging and turning neutral hinting that a short term top might be in or is near.

Closes below the 20 day moving average crossing at 1378.50 would confirm that a short term top has been posted. If March extends this year's rally into uncharted territory, upside targets will now be hard to project.

First resistance is Tuesday's high crossing at 1432.50

Gold pivot point for Wednesday morning is 1412.70

First support is the 10 day moving average crossing at 1389.70
Second support is the 20 day moving average crossing at 1378.50



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