Stock Market and Commodities Commentary For Thursday Evening Oct. 14th

The S&P 500 index closed lower due to profit taking on Thursday as it consolidates below the 87% retracement level of the April-July decline crossing at 1178.21. The mid range close sets the stage for a steady to lower opening on Friday. At the same time, stochastics and the RSI are overbought, diverging and are turning neutral to bearish hinting that a short term top might be in or is near. Closes below the 20 day moving average crossing at 1145.58 are needed to confirm that a short term top has been posted. If December extends the aforementioned rally, April's high crossing at 1203.00 is the next upside target. First resistance is Wednesday's high crossing at 1180.80. Second resistance is April's high crossing at 1203.00. First support is the 10 day moving average crossing at 1157.02. Second support is the 20 day moving average crossing at 1145.58.

Crude oil closed lower due to profit taking on Thursday but remains above the 10 day moving average crossing at 83.04. The low range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI are neutral signaling that sideways to higher prices are possible near term. Closes above last week's high crossing at 85.08 are needed to renew the rally off August's low. Closes below the 20 day moving average crossing at 80.35 are needed to confirm that a short term top has been posted. First resistance is last week's high crossing at 85.08. Second resistance is the 75% retracement level of May's decline crossing at 88.07. First support last week's low crossing at 80.98. Second support is the 20 day moving average crossing at 80.35.

Natural gas closed lower on Thursday ending a two day short covering bounce off Tuesday's low. The low range close sets the stage for a steady to lower opening on Friday. However, stochastics and the RSI are oversold and turning neutral to bullish hinting that a low might be in or is near. Closes above the 20 day moving average crossing at 3.860 are needed to confirm that a low has been posted. If November extends this year's decline, weekly support crossing at 3.390 is the next downside target. First resistance is the 20 day moving average crossing at 3.860. Second resistance is the reaction high crossing at 4.250. First support is Tuesday's low crossing at 3.545. Second support is weekly support crossing at 3.390.

Gold closed higher on Thursday as it extends the rally off July's low. The mid-range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices is possible near term. Upside targets will now be hard to project as it extends this year's rally. Closes below the 20 day moving average crossing at 1320.00 would confirm that a short term top has been posted. First resistance is today's high crossing at 1388.10. First support is the 10 day moving average crossing at 1345.40. Second support is the 20 day moving average crossing at 1320.00.

The U.S. Dollar closed lower on Thursday renewing the decline off August's high. The mid-range close sets the stage for a steady to lower opening on Friday. Stochastics and the RSI are oversold, diverging but are turning neutral signaling that additional weakness is possible near term. If December extends the decline off August's high, the 87% retracement level of the 2009-2010 rally on the weekly continuation chart crossing at 76.07 is the next downside target. Closes above the 20 day moving average crossing at 78.88 would confirm that a short term low has been posted. First resistance is the 10-day moving average crossing at 77.72. Second resistance is the 20 day moving average crossing at 78.88. First support is today's low crossing at 76.48. Second support is the 87% retracement level of the 2009-2010 rally on the weekly continuation chart crossing at 76.07.

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