Wednesday, January 12, 2011

U.S. Dollar Strength Will Trump Leaky Pipeline in the Oil Trade

Leaky pipelines might be big news to traders but international debt issues and it's effect on the dollar continue to be the driving force behind the oil trade. If we see a flight to quality in the U.S. dollar then look for oil bulls to sell off positions. The largest sell offs in 2010 were always over Greece and Ireland debt news. Japan moves eases concerns then that might be bullish for oil. News from Reuters reported that "Japan promised to buy euro zone bonds this month in a show of support for Europe's struggle with a seething debt crisis", and some traders believe that's enough to push oil through this years highs.

On Tuesday our "MarketClub Trade Triangles" issued a short term traders exit signal for all gold "short positions" on a Green Daily “Trade Triangle” @ $1,378.52. Our Trade Triangles are leaving intermediate traders in a sidelines position and our long term traders in a hold long position. If you are not yet a member of MarketClub see what you are missing in 2011 with a 30 Day Risk Free trial and receive 3 valuable bonuses just for giving us a try.

Here's your pivot points, resistance and support numbers for crude oil, natural gas and gold for Wednesday morning......

Crude oil was lower due to profit taking overnight as it consolidates some of Tuesday's rally. Stochastics and the RSI have turned bullish signaling that sideways to higher prices are possible near term. If February extends this week's rally, this year's high crossing at 92.58 is the next upside target. Closes below last Friday's low crossing at 87.25 would confirm that a short term top has been posted. First resistance is the overnight high crossing at 91.74. Second resistance is this year's high crossing at 92.58. First support is last Friday's low crossing at 87.25. Second support is the reaction low crossing at 84.09. Crude oil pivot point for Wednesday morning is 90.48.

Natural gas was higher overnight as it consolidates some of last week's decline. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near term. Closes below the 20 day moving average crossing at 4.332 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 last Tuesday'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 4.332. Second support is December's low crossing at 3.985. Natural gas pivot point for Wednesday morning is 4.441.

Gold was lower overnight as it some of this week's short covering gains. Stochastics and the RSI are turning bullish hinting that a short term low might be in or is near. Closes above the 10 day moving average crossing at 1388.40 would confirm that a short term low has been posted. If February renews last week's decline, the reaction low crossing at 1331.10 is the next downside target. First resistance is the 10 day moving average crossing at 1388.40. Second resistance is last Monday's high crossing at 1424.40. First support is last Friday's low crossing at 1356.50. Second support is the reaction low crossing at 1331.10. Gold pivot point for Wednesday morning is 1381.20.


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