Friday, September 2, 2011

Weak Unemployment Numbers Drive Markets Lower

Crude oil was lower due to profit taking in overnight trading as it consolidates some of this week's rally. Of course disappointing unemployment numbers have contributed to commodities and equities falling hard in early Friday trading.

Thursday trading formed a temporary top at 89.54 with the 4 hour MACD crossed below signal line. Of course the crude oil bears are thrilled with 89.61 support turned resistance remaining intact, and Friday mornings sharp decline [-3.39 as we go to press] is all the prove we need. We will remain bearish.

Closes above the reaction high crossing at 89.61 are needed to confirm that a short term low has been posted. Closes below the 20 day moving average crossing at 85.58 would signal that a short term top has been posted. If October renews the decline off May's high, the 75% retracement level of the 2009-2011 rally crossing at 71.73 is the next downside target.

First resistance is Thursday's high crossing at 89.54. Second resistance is the May-July downtrend line crossing near 93.95. First support is the 20 day moving average crossing at 85.58. Second support is the reaction low crossing at 82.95. Crude oil pivot point for Fridays trading is 89.01.

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