Thursday, May 31, 2012

King Dollar Dominates Crude Oil and Gold....Again!

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Crude oil closed lower on Thursday as it extends the decline off March's high. The low range close sets the stage for a steady to lower opening when Friday's night session begins. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term. If July extends this month's decline, the 75% retracement level of the 2011-2012 rally crossing at 85.69 is the next downside target. Closes above the 20 day moving average crossing at 93.86 are needed to confirm that a low has been posted. First resistance is the 10 day moving average crossing at 90.60. Second resistance is the 20 day moving average crossing at 93.86. First support is today's low crossing at 85.86. Second support is the 75% retracement level of the 2011-2012 rally crossing at 85.69.

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Natural gas closed slightly higher due to short covering on Thursday as it consolidated some of this week's decline. The mid range close sets the stage for a steady opening on Friday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term. If July extends this week's decline, the reaction low crossing at 2.338 is the next downside target. If July renews the rally off April's low, February's high crossing at 3.104 is the next upside target. First resistance is the reaction high crossing at 2.838. Second resistance is February's high crossing at 3.104. First support is today's low crossing at 2.377. Second support is the reaction low crossing at 2.338.

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Gold closed lower on Thursday as it extended the trading range of the past two weeks. The mid range close sets the stage for a steady opening when Friday's night session begins trading. Stochastics and the RSI are bullish signaling sideways to higher prices are possible near term. Closes above the reaction high crossing at 1601.40 are needed to confirm that a short term low has been posted. If August renews the decline off February's high, the 75% retracement level of the 2010-2011 rally crossing at 1461.30 is the next downside target. First resistance is the 20 day moving average crossing at 1583.90. Second resistance is the reaction high crossing at 1601.40. First support is the reaction low crossing at 1529.30. Second support is the 75% retracement level of the 2010-2011 rally crossing at 1461.30.

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