Crude Oil and Natural Gas Market Commentary For Wednesday Morning

Crude oil was lower due to profit taking overnight as it consolidates some of Tuesday's rally. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term. Closes above the 20 day moving average crossing at 78.47 are needed to confirm that a short term low has been posted.

If January renews the decline off October's high, the 75% retracement level of this fall's rally crossing at 70.23 is the next downside target.

Wednesday's pivot point, our line in the sand is 78.14

First resistance is the 20 day moving average crossing at 78.60
Second resistance is the reaction high crossing at 80.88

First support is last Friday's low crossing at 72.39
Second support is the 75% retracement level of this fall's rally crossing at 70.23

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Natural gas was lower overnight as it extends this week's decline. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term. If January extends this week's decline, November's low crossing at 4.560 is the next downside target.

If January renews the rally off November's low, the 50% retracement level of the October-November decline crossing at 5.413 is the next upside target.

Natural gas pivot point for Wednesday is 4.771

First resistance is the 10 day moving average crossing at 4.833
Second resistance is last Friday's high crossing at 5.290

First support is Tuesday's low crossing at 4.659
Second support is November's low crossing at 4.560

How to Use Money Management Stops Effectively

The U.S. Dollar was higher overnight as it consolidates some of Tuesday's decline but remains below the 10 day moving average crossing at 75.29. Stochastics and the RSI are neutral signaling that sideways trading is possible near term.

Closes above the 20 day moving average crossing at 75.52 would temper the near term bearish outlook in the market. If March extends this year's decline, monthly support crossing at 73.39 is the next downside target.

First resistance is the 10 day moving average crossing at 75.29
Second resistance is the 20 day moving average crossing at 75.52

First support is last week's low crossing at 74.55
Second support is monthly support crossing at 73.39

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