Crude Oil Closes Sharply Lower, Bears Target $68 Level

Crude oil closed sharply lower on Wednesday as it extended the decline off October's high and tested the 75% retracement level of this fall's rally crossing at 70.23. The low range close sets the stage for a steady to lower opening on Thursday.

If January extends the decline off October's high, the 87% retracement level of this fall's rally crossing at 68.16 is the next downside target. Closes above the 20 day moving average crossing at 76.92 are needed to confirm that a short term low has been posted.

First resistance is the 10 day moving average crossing at 75.54
Second resistance is the 20 day moving average crossing at 76.92

First support is today's low crossing at 70.13
Second support is the 87% retracement level of this fall's rally crossing at 68.16

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Natural gas posted a key reversal down on Wednesday as it consolidated some of this week's rally. The low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term.

If January extends this week's rally, the reaction high crossing at 5.290 is the next upside target. Closes below the 20 day moving average crossing at 4.828 would temper the near term friendly outlook in the market. If January renews this year's decline, weekly support crossing at 4.157 is the next downside target.

First resistance is today's high crossing at 5.230
Second resistance is the reaction high crossing at 5.290

First support is the 10 day moving average crossing at 4.851
Second support is the 20 day moving average crossing at 4.828

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The U.S. Dollar closed lower due to profit taking on Wednesday as it consolidates some of this week's rally. The mid range close sets the stage for a steady opening on Thursday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term.

If March extends its current rally, November's high crossing at 77.27 is the next upside target. Closes below the 20 day moving average crossing at 75.60 would temper the near term friendly outlook in the Dollar.

First resistance is today's high crossing at 76.66
Second resistance is November's high crossing at 77.27

First support is the 10 day moving average crossing at 75.62
Second support is the 20 day moving average crossing at 75.60

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