Could One Fed President Spoil The Crude Oil Bull Run

It appears the first shot has been taken at QE2 as Richmond Fed President Lacker, not a voting member, has become the first to call for a roll back in the program. A program that virtually every investor believes the recent bull market relies on 100%. Lacker got the markets attention this week when he said the central bank should consider unwinding QE2, the 600 billion dollar asset buying program announced last November.

He said the "distinct improvement in the economic outlook since the program was initiated suggests taking revaluation quite seriously". But Lacker tried to make it clear he is still not ready to stop the program entirely right now since "strong readings on jobs and sustained consumer spending would warrant a rethink on growth".

World oil and commodity traders did consolidate oil prices overnight as most expect to see the same upward revisions in OPEC's and IEA's reports on Thursday as they saw in the US Energy Departments monthly report published yesterday which predicted increases in oil price and global demand.

Retail gas customers may get some relief this week as gasoline supplies gained 3.2 million barrels to 239.7 million barrels, the API said. The higher inventory numbers would put stockpiles at the highest level since February 26th 1993. Motor fuel inventories also increased 2.6 million barrels from 236.2 million a week earlier.

Here's your pivot, resistance and support numbers for Wednesdays trading.....

Crude oil was higher due to short covering overnight as it consolidates some of the decline off last week's high. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term. If March extends the decline off last week's high, January's low crossing at 85.11 is the next downside target. Closes above the 20 day moving average crossing at 89.60 would signal that a short term low has been posted. First resistance is the 10 day moving average crossing at 89.00. Second resistance is the 20 day moving average crossing at 89.60. First support is Tuesday's low crossing at 85.88. Second support is January's low crossing at 85.11. Crude oil pivot point for Wednesday morning is 86.98.

Natural gas was lower overnight as it extends the decline off January's high. Stochastics and the RSI are oversold but remain bearish signaling that additional weakness is possible near term. If March renews the decline off January's high, the 87% retracement level of the October-January rally crossing at 3.975 is the next downside target. Closes above the 20 day moving average crossing at 4.405 are needed to confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 4.262. Second resistance is the 20 day moving average crossing at 4.405. First support is the overnight low crossing at 3.996. Second support is the 87% retracement level of the October-January rally crossing at 3.975. Natural gas pivot point for Wednesday morning is 4.065.

Gold was slightly lower due to light profit taking overnight as it consolidates some of Tuesday's rally but remains above the 20 day moving average crossing at 1351.50. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term. If February extends the rebound off January's low, the reaction high crossing at 1394.70 is the next upside target. Closes below the 20 day moving average crossing at 1344.60 would temper the near term bullish outlook. First resistance is Tuesday's high crossing at 1368.70. Second resistance is the reaction high crossing at 1394.70. First support is the 10 day moving average crossing at 1344.50. Second support is January's low crossing at 1309.10. Gold pivot point for Wednesday morning is 1360.60.


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