Thursday, February 2, 2012
Is The Double Top in For Crude Oil?
We do remain longer term positive on this market, however it needs to move and close over resistance at $100 to get its upside momentum into high gear. With only our monthly Trade Triangle in positive mode, we expect we will see further market consolidation in crude oil. Long term traders should be long this market with appropriate money management stops.
March crude oil closed down $1.24 a barrel at $96.36 today. Prices closed nearer the session low today and hit another fresh six week low. Crude oil bulls are fading. Prices are in a four week old downtrend on the daily bar chart. The next near term upside price breakout objective for the crude oil bulls is producing a close above psychological technical resistance at $100.00 a barrel.
The gold market moved to its best levels since December 2nd, however it is at major resistance between the $1760 and $1800 levels. With our long term monthly Trade Triangle still in a negative mode, we cannot get excited about this market at the moment. We are not super bearish on this metal, however we just need further confirmation with the tools we know are successful in trading gold. Long term term traders should be in short positions in gold with appropriate money management stops. Intermediate term traders should be on the sidelines.
April gold futures closed up $9.40 an ounce at $1,758.90 today. Prices closed nearer the session high today and hit a fresh two month high. Gold managed gains today despite bearish “outside markets” that saw a firmer U.S. dollar index and sharply lower crude oil prices. Yet, gold rallied anyway on its technical strength. Gold bulls have the solid overall near term technical advantage and still have upside near term technical momentum on their side. A steep five week old uptrend is in place on the daily bar chart.
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