Wednesday, January 19, 2011

OPEC Quietly Raising Output Overshadowed By Chinese Macroeconomic Data

Positive Chinese macroeconomic data gave the crude oil and commodity bulls the advantage in the European session overnight even as traders digest news that OPEC has quietly been increasing production. OPEC seems to keep finding ways to make themselves irrelevant as OPEC's own report revealed that compliance level for the "OPEC 11" dropped to 54.0% in December 2010. Looks like OPEC as quietly been raising production while sending their cheerleaders out to the press to call for higher oil prices for some of their ailing economies as they themselves fight to contain food prices in some of their own countries.

And this may not make the nightly news but I am sure the visit to the White House by Chinese President Hu Jintao will have the leaders focusing on world food prices as China has made a priority out of bringing new energy sources online at all cost. And Washington will be playing catch up again, but there is hope for the new "Clintonized" Obama agenda as the attitude towards business coming from the administration is changing quickly. Does this mean we have some new permits being approved for Nuclear power plants right around the corner? We won't be holding our breaths for that but we can still dream.

Oil futures are up this morning as far out as February 2012 but well below the the critical 92.58 level. Is it all aboard the bull bus this morning? Here's your pivot, resistance and support numbers for Wednesdays trading.......

Crude oil was higher overnight and remains poised to extend last week's rally. Stochastics and the RSI remain neutral to bullish signaling that sideways to higher prices are possible near term. If February extends last week's rally, this year's high crossing at 92.58 is the next upside target. Closes below the reaction low crossing at 87.25 would confirm that a short term top has been posted. First resistance is this year's high crossing at 92.58. Second resistance is weekly resistance crossing at 93.87. First support is the reaction low crossing at 87.25. Second support is the reaction low crossing at 84.09. Crude oil pivot point for Wednesday morning is 92.21.

Natural gas was slightly higher overnight as it consolidates above the 20 day moving average crossing at 4.385. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term. Closes below the 20 day moving average crossing at 4.385 are needed to confirm that a short term top has been posted. If February renews the rally off December's low, the 50% retracement level of the June-October decline crossing at 4.876 is the next upside target. First resistance is this month's high crossing at 4.707. Second resistance is the 50% retracement level of the June-October decline crossing at 4.876. First support is the 20 day moving average crossing at 4.385. Second support is December's low crossing at 3.985. Natural gas pivot point for Wednesday morning is 4.450

Gold was higher due to short covering overnight as it consolidates some of last week's rally. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible. If February extends last week's decline, the reaction low crossing at 1331.10 is the next downside target. Closes above the 20 day moving average crossing at 1386.70 are needed to confirm that a short term low has been posted. First resistance is the 20 day moving average crossing at 1386.70. Second resistance is this month's high crossing at 1424.40. First support is the reaction low crossing at 1352.70. Second support is the reaction low crossing at 1331.10. Gold pivot point for Wednesday morning is 1367.00.


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