Friday, September 2, 2011
Traders Always Let Us Know Where They Stand Before a Long Weekend...And it Doesn't Look Good!
Crude oil closed lower on Friday due to the bad news and profit taking as it consolidates some of the rally off August's low. The low range close sets the stage for a steady to lower opening on Tuesday. Make sure you know when the world is trading as this is a holiday weekend. Check out our post Labor Day CME Hours so you won't get tripped up.
The oil companies themselves will not be taking a holiday weekend as Tropical Storm Lee has producers working around the clock to secure platforms, rigs and personal in the Gulf of Mexico. If the storm lives up to predictions it could limit product flow out of the gulf to 50% of normal production. And oil prices still fell today?
Stochastics and the RSI remain overbought and closes above the reaction high crossing at 89.19 are needed to confirm that a low has been posted. If October renews this summer's decline, the 75% retracement level of the 2009-2011 rally crossing at 71.72 is the next downside target.
First resistance is Thursday's high crossing at 89.90. Second resistance is the May-July downtrend line crossing near 93.88. First support is the 20 day moving average crossing at 85.51. Second support is August's low crossing at 76.15.