Crude Oil Bears Take a Clear Near Term Advantage

Crude oil closed lower on Wednesday as it extends last week's decline. The low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI remain bearish signal that sideways to lower prices are possible near term.

If February extends last week's decline, the 62% retracement level of the 2008 decline crossing at 75.85 is the next downside target. Closes above the 10 day moving average crossing at 80.55 would confirm that a short term low has been posted.

First resistance is the 20 day moving average crossing at 79.39
Second resistance is the 10 day moving average crossing at 80.55

First support is Tuesday's low crossing at 76.76
Second support is the 62% retracement level of the 2008 decline crossing at 75.85

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Natural gas closed lower on Wednesday and the low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are neutral to bearish hinting that additional weakness is possible near term.

If February extends last week's decline, the 50% retracement level of the December-January rally crossing at 5.314 is the next downside target. Closes above last Thursday's high crossing at 5.804 would temper the near term bearish outlook in the market.

First resistance is last Thursday's high crossing at 5.804
Second resistance is the reaction high crossing at 6.108

First support is last Tuesday's low crossing at 5.354
Second support is the 50% retracement level of the December-January rally crossing at 5.314

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The U.S. Dollar closed sharply higher on Wednesday and above the 20 day moving average crossing at 77.79 confirming that a low has been posted. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term.

If March extends this week's rally, December's high crossing at 78.77 is the next upside target. Closes below the 10 day moving average crossing at 77.48 would confirm that a short term top has been posted.

First resistance is today's high crossing at 78.64
Second resistance is December's high crossing at 78.77

First support is the 20 day moving average crossing at 77.79
Second support is Tuesday's low crossing at 77.09

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