Is this ETF Laying the Foundation for a Rally in Crude Oil?

Picking bottoms is not something one should do if you're going to be a successful trader. But looking at market that may be forming a bottom is a good exercise, and one that you should be doing on a regular basis. I had done this before gold reversed to the upside traded over $1300 an ounce. Maybe it's time to look at crude oil and see if it's beginning to set itself up for a move to the upside.

Technically, the Trade Triangles remain negative on crude oil, so there is no reversal showing up with those technical tools. The story is a little bit different with the RSI indicator. This particular indicator is showing that there is a big positive divergence on the Energy Select Sector SPDR ETF (PACF:XLE), and it is one that spans months.

Today I'm looking at the ETF XLE and the fact that if it closes higher for the week, it will be a positive sign. The previous week saw a very important Japanese candlestick formation call a "Dragon Fly Doji" this can be interpreted as a strong indication of reversal. It all depend's on how XLE closes this Friday.

Should XLE close higher than ($76.56) the market will have created a "Bullish Engulfing Line" confirming that the previous weeks, "Dragon Fly Doji" was indeed a reversal to the upside.

Take a look at both charts, one is a daily graph showing a large positive divergence on the RSI indicator. The other graph is a weekly Candlestick chart highlighting the “Dragon Fly Doji” and the potential for a “Bullish Engulfing Line” to occur this week.

So here is my 3 step strategy for the Energy Select Sector SPDR ETF (PACF:XLE):

1. I'm going to watch this market closely and have it on my radar.

2. I want to watch the 50 line on the RSI. A close over this line will be another important clue and strong indication that this market is bottoming or has bottomed out.

3. I'm also watching the weekly Trade Triangle on crude oil, should this Trade Triangle turn green, you'll want to BUY XLE, as it closely tracks crude oil.

Now let's see how the Energy Select Sector SPDR ETF (PACF:XLE) does in the future.

Every success with MarketClub,
Adam Hewison
President, INO.com
Co-Creator, MarketClub

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Commodities Market Summary for Monday October 13th - Crude Oil, Natural Gas, Gold, Coffee

November crude oil closed lower on Monday. The high range close sets the stage for a steady to higher opening when Tuesday's night session begins. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term. If November extends the decline off June's high, the 62% retracement level of the 2009-2011 rally crossing at 80.80 is the next downside target. Closes above the 20 day moving average crossing at 90.64 are needed to confirm that a low has been posted. First resistance is the 10 day moving average crossing at 88.63. Second resistance is the 20 day moving average crossing at 90.64. First support is last Friday's low crossing at 83.15. Second support is the 62% retracement level of the 2009-2011 rally crossing at 80.80.

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November Henry natural gas closed higher on Monday as it consolidates some of last week's losses. The high range close sets the stage for a steady to higher opening when Tuesday's session begins trading. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term. If November extends last week's decline, September's low crossing at 3.812 is the next downside target. Multiple closes above the late August high crossing at 4.163 are needed to confirm an upside breakout of the late summer trading range. Closes below July's low crossing at 3.786 would confirm a downside breakout of the late summer trading range. First resistance is the reaction high crossing at 4.184. Second resistance is the reaction high crossing at 4.487. First support is September's low crossing at 3.812. Second support is July's low crossing at 3.786.

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December gold closed higher on Monday as it extends this month's short covering rally. The high range close sets the stage for a steady to higher opening when Tuesday's night session begins trading. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near term. If December extends this month's rally, the 38% retracement level of the July-October decline crossing at 1246.00 is the next upside target. Closes below the 10 day moving average crossing at 1214.20 would confirm that a short term top has been posted. First resistance is the 38% retracement level of the July-October decline crossing at 1246.00 . Second resistance is the 50% retracement level of the July-October decline crossing at 1265.50 . First support is October's low crossing at 1183.30. Second support is monthly support crossing at 1179.40.

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December coffee closed lower due to profit taking on Monday. The low range close set the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term. If December extends the rally off September's low, weekly resistance crossing at 24.30 is the next upside target. Closes below the 20 day moving average crossing at 19.79 are needed to confirm that a top has been posted.

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WTI Crude Oil on the Move $112 Next Stop

The energy sector has surged during the last two months which can be seen by looking at the XLE Energy Select Sector Fund. If crude oil continues to climb to the $112 level, XLE will likely continue to rally for another few days or possibly week as energy stocks are considered a leveraged way to play energy price movements.

Another way to look at this info is through the USO United States Oil Fund. This tracks much closer to the price of oil. The only issue is that many ETFs that “try to track” an underlying commodity is in how the funds are built. They own multiple contracts further into the future which does not exactly provide us with the short term news/event driven price movements in the current front month contract as they should.

What does this mumbo jumbo mean? Well, it means funds like USO and the highly respected UNG, and VIX ETFs… (just joking about the highly respected part), fail to track the underlying commodity or index very well when it comes to short term price movements. This means, you can nail the timing of a trade, and the commodity or index will move in your favor, yet your fund loses money, or goes nowhere...

Let’s Focus on the Technicals Now….

 

WTI crude oil has formed a bullish ascending triangle pattern from March to May of this year. The breakout to the upside is bullish and should be traded that way until the chart says otherwise. This breakout and first pullback must hold, or I will consider it a failed breakout. So if price dips and closes 2 days below the breakout level, it will be a major negative for oil in my opinion.

The range of the ascending triangle provides us with a measured move to the upside which is $112. Typically the first pullback after a breakout can be bought. The first short term target to scalp some gains would be $109, and at that point moving your stop to breakeven is a wise decision. Trading is all about managing capital and risk, if you don’t, then the market will take advantage of your lack in discipline.

Looking further back on the chart, you can see the double bottom formation also known as a “W” formation. Once the high of the “W” formation is broken the trend should be considered neural or up.

Also note that the RSI (relative strength) has been trending higher for some time now. This means money is rotating into this commodity. This is in line with my interview this week with Kerry Lutz and my recent article talking about the next bull market in commodities and the TSX (Toronto Stock Exchange).

 

WTI Crude Oil Trading Conclusion:

 

In short, oil has some extra risk around it. The recent move has been partly fueled by news overseas. So at any time oil could get a lift or take a hit by news that hits the wires. I tent to trade news related events with much less capital than I normally do because of this risk.

Happy Trading,
Chris Vermeulen

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Commodities Are Building Bases and About To Rally – Steel Market

Commodities in general have been under pressure for the last couple years. This can be seen by looking at the GCC Greenhaven Continuous Commodity ETF which holds a basket of resources. The weekly chart has formed a bullish bottom pattern, and as of last January it looks as though it’s now building a basing pattern. Overall commodities are in the very early stages of a stage 1 basing pattern and it looks as though it will be a few more months before any significant breakout will occur. But there could be some early entry points if you know what to look for…

A few days ago I talked about how commodities tend to perform well near the end of a bull market in the United States stock market. I also pointed out which hot index was going to benefit from this. In this article I want to bring your attention to the steel market. Using the SLX Steel ETF you can clearly see the bottoming pattern and basing pattern for this commodity. Currently steel is underperforming the stock market and is vulnerable to lower prices. But if we see a few things come together in the coming days or weeks, this could be a screaming buy.

My technical take on steel is this:

 

SLX has formed a bottoming pattern from January – mid March. It has since put in a strong impulse rally to make a higher high, and is now consolidating above key support. The RSI (Relative Strength) remains in a down trend, but if this starts to rise and SLX breaks above its recent highs around the $47.75 level I feel steel will start to rally with $50 being the next major whole number and previous high for steel to find some resistance.

Also price has been riding along the 200 day moving average which is acting as support. If price closes a couple of days below the 200 moving average I would consider this to be a bearish sign.

 

Steel Trading Conclusion:

 

In short, we are looking for the relative strength to start making new highs. Also we want to see a reversal bar on the SLX chart to the upside which we got on Tuesday. Or you can wait for a breakout and close above $47-48 area. Stop would be somewhere around the $45.75 area to start, then raise it as price rallies using intraday pivot lows on the 30 minute chart.

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Commodities Market Recap and this Weeks Stops and Trading Numbers....Crude Oil, Natural Gas, Gold, Silver, Coffee, Sugar and More!

We've asked our trading partner Michael Seery to give our readers a weekly recap of the futures market. He has been Senior Analyst for close to 15 years and has extensive knowledge of all of the commodity and option markets......


Crude oil futures are trading below their 20 day but still above their 100 day moving average stating that the trend is mixed as I am currently sitting on the sidelines as there is no trend currently. The fundamentals are bearish in oil as stock piles are at 85 year highs as prices peaked at 104 last month now looking at support between 97-98 dollars a barrel as I think lower prices are ahead however I am not currently participating in this market so wait for better chart structure to develop.
TREND: MIXED
CHART STRUCTURE: OK

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Natural Gas Futures. I had been recommending a long position in the June natural gas as prices broke down yesterday hitting a 10 day low and stopping us out of the market for a loss so sit on the sidelines and wait for better chart structure to develop. This was a disappointing trade as I thought prices were going to break above 5.00 but that did not happen so it’s time to lick your wounds and find a better trend.
TREND: MIXED
CHART STRUCTURE: SOLID

Gold futures in the June contract settled last Friday at 1,309 while going out today around 1,290 down by about $20 for the trading week as the Ukrainian situation has stalled sending gold prices back down into the recent trading range. Gold futures are trading below their 20 but right at their 100 day moving average as prices have been consolidating in the last 5 weeks trading in a $30 range as I’ve been sitting on the sidelines waiting for a better chart pattern to develop but if you are looking to get into this market on the long side I would buy at today’s prices placing my stop at the 10 day low of 1,365 risking around $2,500 per contract and if you’re looking to get short this market I would sell at today’s price while putting my stop loss at 1,310 risking around $2,000 as the chart structure is relatively tight at the current time. Gold prices rallied from 1,180 all the way up near $1,400 an ounce 2 months ago so this is basically the 50% retracement and I think you will see a consolidation for quite some time so keep a close eye on this chart as it appears to me that a breakout is looming.
TREND: MIXED
CHART STRUCTURE: EXCELLENT

Is it Time to Admit That Gold Peaked in 2011?

Silver futures in New York continued their bearish trend this week settling last Friday at 19.55 finishing lower by about $.45 for the trading week as I still think there’s a possibility that a spike bottom occurred in last Fridays trade as $19 has been very difficult to break on the downside. Silver futures have come all the way from slightly above $22 in late February all the way down to today’s level and from $35 in 2013 so this is been a bear market for well over 1 year as there seems to be a lack of interest, however eventually silver will turn around and join the rest of commodities higher but at this point there’s just very little interest. Silver futures are trading below their 20 and 100 day moving average telling you that the trend is lower and as I’ve talked about many times before if you have deep pockets and you’re a longer-term investor I think prices down at these levels are relatively cheap and if prices went lower I would continue to dollar cost average as there is real demand for silver.
TREND: LOWER
CHART STRUCTURE: EXCELLENT

Here's our Critical Line in the Sand for Silver

Coffee futures in the July contract were sharply lower this week finishing down over 1150 points this Friday afternoon to close around 184.00 a pound and I’ve been recommending a long position in coffee for quite some time as we got stopped out at the 194 level today which was the 2 week low so sit on the sidelines and wait for another trend to develop as prices could possibly retest the recent lows of around 170. Coffee futures are trading below their 20 day and above their 100 day moving average as the trend is sideways to lower currently so look for another market that is in a stronger trend but keep a close eye on this market as I do think prices are limited to the downside and I would be an interested buyer around the 165 level which was hit in early April. Coffee prices broke above to new contract highs 3 weeks ago but prices have just petered out here in recent weeks as crop estimates start to come out in the next several weeks.
TREND: MIXED
CHART STRUCTURE: POOR

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Sugar futures finished the week down around 20 points trading in nonvolatile action as prices are testing support at 17.07 settling this Friday at 17.20 and if that level is broken then I would place my stop loss above the 10 day high which stands at 18.03 risking around 100 points or $1,100 dollars per contract. The chart structure is excellent at the current time as the trend is lower as prices are trading below their 20 & 100 day moving averages as prices have been in a 100 point trading range over the last month so keep a close eye on the 17 level for a possible short as the soft commodities have turned negative recently. TREND: MIXED
CHART STRUCTURE: OUTSTANDING

Why Are So Many Boomers Working Longer?

When Do You Add To Your Winning Trade? This has always been a very interesting question because it can create a situation of going from rags to riches or from riches to rags in a very short amount of time. Many times I see traders abuse pyramiding or adding to positions with utter lack of any type of money management system in place and letting it ride which usually ends up in a complete wipeout of capital and sometimes even worse.

Commodity prices can move very quickly with large gains or loses like we experienced in the 2008 crash of stock and commodity prices, so you always have to use stops and not fall in love or marry a position. In my opinion the answer to this question is add only once to the trade if that position has made you at least 2%-3% of your account balance while still having stop losses on all positions that equal 2% loss at a maximum risk. Remember your stop loses will be different on both positions because of the fact that you entered those trades at a different date and price.

There are many different theories about how long does a meaningful consolidation have to last before you enter a trade on the breakout to the up or downside? In my opinion I always want to see a consolidation that lasts at least 8 or more weeks before I would consider entering. The reason that I want a longer consolidation is to try and avoid a bunch of false breakouts such as a 10 or 15 day consolidations which happen all the time, so I am trying to put the odds in my favor by trading the breakout of at least 8 weeks or more and the longer such as a 11 or 13 week consolidation the better. At this present time cocoa is in a major consolidation.

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Is this Gold's "Best of the Breed" a Golden Rocket!

Gold and gold stocks have be stabilizing for months and have been quietly rising. Many gold stocks are up 30% even 50% in the past three months. The $HUI AMEX Gold Bugs Index is up over 30% from the lows.

If you think you have missed most of the move already you are wrong. The truth is most of the biggest rallies in stocks take place after a basing pattern with 30 -50% or more has formed. This is signaling massive accumulation in gold stocks and its happening right now by the institutions.

So in this exclusive report I want to share one golden rocket stock pick which I feel has huge upside potential “IF” the precious metals market and miners can breakout of this stage 1 pattern it has formed.

One thing that excites me is about precious metals and gold stocks is the fact that we have heard nothing about gold, silver or mining stocks in the media for months… almost like the big institutions have told the media to avoid putting the spot light on it until they accumulate all they can in terms of physical bullion and stock shares.

This is the same for a few other sectors I have been watching build massive stage 1 bases in over the past few months and will be investing and actively trading them also once they break out of the basing stage.


Gold Stock Trading & Investing Success Formula

1. KISS – Keep It Simple Stupid! – Non one likes or follows complicated trading strategies

2. Understand and know how to identify the four market stages – Read My Book: Click Here

3. Know why and how stages must be traded for timing your entry, profit taking and exits.

4. Scan the market for the top performing sectors and focus on stocks/ETFs within those sectors.

5. Review all stocks and funds to meet setup criteria and trade only the best looking charts primed to start a new bull market (low overhead resistance nearby, strong relative strength, strong volume on breakout, 30 week SMA moving up etc..) Get this done for you: Click Here

6. Sit back, watch and monitor position for possible change in the stage, to adjust stops and identify profit taking levels.


Golden Rock Stock Pick

The chart below is top quality gold stock which has all the characteristics of a big winner. Just to be clear, I normally do not mention individual stocks within public reports. I am not compensated in any way to post this report. This is nothing more than my technical outlook on a stock and not investment advice. I do plan on buying some shares of this company this week or next.





Golden Rocket Conclusion:

While it still my be a little early for precious metals to bottom, it looks as though the stage (pardon the pun) has been set for a precious metals bull market to start. As they say, there is always a bull market somewhere… the key is finding it and taking the proper action.

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Sincerely,

Chris Vermeulen
Founder of Technical Traders Ltd. - Partnership Program

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Week Ending Commodities Market Summary - Crude oil, Natural Gas, Gold, Sugar and U.S. Dollar

April crude oil closed higher due to short covering on Friday as it consolidates some of this month's decline. Today's high range close sets the stage for a steady to higher opening when Monday's night session begins. Stochastics and the RSI are oversold but remain neutral to bearish hinting that sideways to lower prices are possible near term. If April extends this month's decline, the 62% retracement level of the January-March rally crossing at 96.76 is the next downside target.Closes above the 20 day moving average crossing at 101.62 would confirm that a short term low has been posted. First resistance is the 20 day moving average crossing at 101.62. Second resistance is March's high crossing at 105.22. First support is the 62% retracement level of the January-March rally crossing at 96.76. Second support is the 75% retracement level of the January-March rally crossing at 94.93.

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April Henry natural gas closed higher due to short covering on Friday as it consolidates some of the decline off March's high. Today's high range close sets the stage for a steady to higher opening when Monday's session begins trading. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term. If April extends the decline off February's high, the 62% retracement level of the November-February rally crossing at 4.131 is the next downside target. Closes above the 20 day moving average crossing at 4.632 would confirm that a short term low ghas been posted. First resistance is the 20 day moving average crossing at 4.632. Second resistance is February's high crossing at 5.209. First support is the 50% retracement level of the November-February rally crossing at 4.338. Second support is the 62% retracement level of the November-February rally crossing at 4.131.

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April gold closed higher on Friday as it extends this year's rally. The high range close sets the stage for a steady to higher opening when Monday's night session begins trading. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term. If April extends the rally off December's low, the 87% retracement level of the August-December decline crossing at 1398.00 is the next upside target. Closes below the 20 day moving average crossing at 1339.90 are needed to confirm that a short term top has been posted. First resistance is today's high crossing at 1388.40. Second resistance is the 87% retracement level of the August-December decline crossing at 1398.00. First support is the 10 day moving average crossing at 1353.30. Second support is the 20 day moving average crossing at 1339.90.

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May coffee closed lower due to profit taking on Friday. The low range close set the stage for a steady to lower opening on Monday. Stochastics and the RSI are overbought 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 18.45 are needed to confirm that a short term top has been posted. If May extends the rally off November's low, the 75% retracement level of the 2011-2013 decline crossing at 23.27 is the next upside target.

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May sugar closed lower on Friday and below the 20 day moving average crossing at 17.55 confirming that a short term top has been posted. The low range close set the stage for a steady to lower opening on Monday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term. If May extends this week's decline, the reaction low crossing at 16.62 is the next upside target. Closes above the 10 day moving average crossing at 17.91 would temper the near term bearish outlook.

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The June U.S. Dollar closed lower on Friday. The low range close sets the stage for a steady to lower opening when Monday's night session begins trading. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term. If June extends the decline off February's high, monthly support crossing at 78.91 is the next downside target. Closes above the 20 day moving average crossing at 80.13 are needed to confirm that a short term low has been posted. First resistance is the 20 day moving average crossing at 80.13. Second resistance is the reaction high crossing at 80.74. First support is Thursday's low crossing at 79.37. Second support is monthly support crossing at 78.91.

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Telephone Stocks Hang Up and Autos Run Us Over as Markets Head Lower. Here's our Summary - Gold, Crude Oil, Natural Gas, SP 500 and Coffee

The DOW closed sharply lower on Monday as it extends the decline off January's high. Today's sell off was triggered by a sharp decline in telephone stocks, disappointment over auto sales by Ford and General Motors and reports that Jos. A. Bank Clothiers will not enter into takeover talks.

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The SP500 closed sharply lower [March contract] on Monday and below the 2012-2013 uptrend line crossing near 1744.00 confirming that am intermediate trend change is taking place. The low range close sets the stage for a steady to lower opening when Tuesday's night session begins trading. Stochastics and the RSI are oversold but remain neutral to bearish signaling that additional weakness is possible near term. If March extends this year's decline, the 25% retracement level of the 25% retracement level of 2012's rally crossing at 1692.03 is the next downside target. Closes above the 20 day moving average crossing at 1811.38 are needed to confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 1791.33. Second resistance is the 20 day moving average crossing at 1811.38. First support is today's low crossing at 1735.50. Second support is the 25% retracement level of 2012's rally crossing at 1692.03.


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Crude oil closed lower due to profit taking on Monday as it consolidated some of the rally off January's low. Today's low range close sets the stage for a steady to lower opening when Tuesday's night session begins. Stochastics and the RSI are overbought but 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 95.00 would confirm that a short term top has been posted. If March extends the aforementioned rally, the 87% retracement level of the December-January decline crossing at 99.58 is the next upside target. First resistance is the 75% retracement level of the December-January decline crossing at 98.47. Second resistance is the 87% retracement level of the December-January decline crossing at 99.58. First support is today's low crossing at 96.26. Second support is the 20 day moving average crossing at 95.06.

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Natural gas [March contract] closed lower on Monday. The high range close sets the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are bearish hinting that a pause in the rally is possible or that a short term top has been posted. Closes below the 20 day moving average crossing at 4.528 would confirm that a short term top has been posted. If March renews this winter's rally, monthly resistance crossing at 6.108 is the next upside target. First resistance is last Wednesday's high crossing at 5.486. Second resistance is monthly resistance crossing at 6.108. First support is the 10 day moving average crossing at 4.843. Second support is the 20 day moving average crossing at 4.528.

Here's detailed analysis on the March Natural Gas contract

Gold closed higher [April contract] on Monday. The mid range close sets the stage for a steady opening when Tuesday's night session begins trading. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near term. If April extends last week's decline, the reaction low crossing at 1215.30 is the next downside target. If April renews the rally off December's low, the 50% retracement level of the August-December decline crossing at 1306.20 is the next upside target. First resistance is last Monday's high crossing at 1280.10. Second resistance is the 50% retracement level of the August-December decline crossing at 1306.20. First support is the reaction low crossing at 1230.80. Second support is the reaction low crossing at 1215.30.

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Coffee closed sharply higher on Monday [March contract] as it extends this rally off November's low. The high range close set the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. If March extends the rally off November's low, last July's high crossing at 13.80 is the next upside target. Closes below the 10 day moving average crossing at 11.87 would confirm that a short term top has been posted.

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Is it Buy Time for Halliburton? Wait for it.....wait for it....

Today we are going to be analyzing the stock of Halliburton Company (NYSE:HAL). On January 27th, a new red monthly Trade Triangle appeared, the first in 12 months for the stock. This indicates a significant technical development and changes the outlook and direction of Halliburton.

Today's in depth analysis is not to say the stock is going to collapse and go out of business, but rather we are noting a confluence of certain technical indicators that do not paint a positive picture for this stock.

There is an old adage in trading and it says "they slide faster than they glide." Translated that means stocks go down a lot faster than they go up.

What Does This Company Do?

Halliburton Company provides a range of services and products for the exploration, development, and production of oil and natural gas to oil and gas companies worldwide.

Chart Legend & Technical Picture (Black Numbers)

1. Classic long term trend line
2. Neckline of a Head and Shoulders Top
3. Head and Shoulders Top
4. Break below the 14 month trend line and Head and Shoulders Neckline
5. Fibonacci retracement levels
6. RSI divergence with price action below 50.

All of the Trade Triangles are red and negative.

To summarize, I expect the current downtrend in Halliburton Company (NYSE:HAL) to continue unless I see otherwise with the Trade Triangle technology.

If we are correct in our analysis, we could potentially see Halliburton move down to the following Fibonacci retracement levels:

38.2% @ $46.13
50% @ $43.00
61.8% @ $39.86

The 61.8% Fibonacci level of $39.86 nicely matches the Head and Shoulders target zone of $40.00. These two measurements confirm one another and make a strong case for this stock trading down to the $40 level in the next few months.


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Mid Week Market Summary - Crude Oil, Natural Gas, Gold, Wheat and Coffee

Crude oil closed sharply higher on Wednesday and above the 10 day moving average crossing at 93.53 signaling that a low might be in or is near. Today's high range close sets the stage for a steady to higher opening when Thursday's night session begins. Stochastics and the RSI are oversold but are turning neutral to bullish hinting that a short term low might be in or is near. Closes above the 20 day moving average crossing at 96.25 are needed to confirm that a short term low has been posted. If March resumes the decline off December's high, the June 2013 low crossing at 89.48 is the next downside target. First resistance is today's high crossing at 94.82. Second resistance is the 20 day moving average crossing at 96.25. First support is last Thursday's low crossing at 91.47. Second support is the June 2013 low crossing at 89.48.

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Natural gas closed lower on Wednesday as it consolidates some of the rally off last week's low. The low range close sets the stage for a steady to lower opening on Thursday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near-term. If March extends the aforementioned rally, the reaction high crossing at 4.403 is the next upside target. Closes below the 10 day moving average crossing at 4.213 would confirm that a short term top has been posted. First resistance is the reaction high crossing at 4.403. Second resistance is December's high crossing at 4.550. First support is the 10 day moving average crossing at 4.213. Second support is last Friday's low crossing at 3.936.

Gold closed lower due to profit taking on Wednesday as it consolidated some of the rally off December's low. The high range close sets the stage for a steady to higher opening when Thursday's night session begins trading. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term. If April extends the rally off December's low, December's high crossing at 1266.70 is the next upside target. Closes below the 20 day moving average crossing at 1223.90 would confirm that a short term top has been posted. If April renews the decline off August's high, weekly support crossing at 1179.40 is the next downside target. First resistance is Tuesday's high crossing at 1255.20. Second resistance is December's high crossing at 1266.70. First support is the 20 day moving average crossing at 1223.90. Second support is December's low crossing at 1182.30.

Coffee closed lower on Wednesday and the mid range close set the stage for a steady opening on Thursday. Stochastics and the RSI are diverging and are turning neutral to bearish signaling that sideways to lower prices are possible near term. Closes below the 20 day moving average crossing at 11.65 would confirm that a short term top has been posted. If March extends the rally off November's low, September's high crossing at 12.40 is the next upside target.

Wheat closed lower on Wednesday ending a two day short covering bounce off last Friday's low. Today's low range close sets the stage for a steady to lower opening when Thursday's night session begins trading. Stochastics and the RSI are diverging but are turning neutral to bullish signaling that sideways to higher prices are possible near term. Closes above the 20 day moving average crossing at 5.98 1/4 would confirm that a short term low has been posted. If March extends the decline off October's high, weekly support crossing at 5.54 3/4 is the next downside target. First resistance is the 20 day moving average crossing at 5.98 1/4. Second resistance is the reaction high crossing at 6.12 3/4. First support is last Friday's low crossing at 5.60 1/2. Second support is weekly support crossing at 5.54 3/4.

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Commodities Close the Week on a High Note - Crude Oil, Natural Gas, Gold, Corn and Coffee

Crude oil closed higher due to short covering on Friday as it consolidated some of the decline off last August's high. Today's mid range close sets the stage for a steady opening when Monday's night session begins. Stochastics and the RSI are oversold but remain neutral to bearish signaling that additional weakness is possible. If February extends the aforementioned decline, the June 2013 low crossing at 90.05 is the next downside target. Closes above the 20 day moving average crossing at 96.76 would confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 95.12. Second resistance is the 20 day moving average crossing at 96.76. First support is Thursday's low crossing at 91.24. Second support is the June 2013 low crossing at 90.05.

Natural gas closed higher due to short covering on Friday as it consolidated some of the decline off December's high. The high range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices are possible near term. If February extends the decline off December's high, the 62% retracement level of the November-December rally crossing at 3.897 is the next downside target. Closes above the 20 day moving average crossing at 4.328 would confirm that a short term low has been posted. First resistance is the 20 day moving average crossing at 4.328. Second resistance is the reaction high crossing at 4.430. First support is today's low crossing at 3.953. Second support is the 62% retracement level of the November-December rally crossing at 3.897.

Gold closed higher on Friday as it extends the rally off December's low. The high range close sets the stage for a steady to higher opening when Monday's night session begins trading. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near term. If April extends the rally off December's low, December's high crossing at 1266.70 is the next upside target. If April renews the decline off August's high, weekly support crossing at 1179.40 is the next downside target. First resistance is today's high crossing at 1249.00. Second resistance is December's high crossing at 1266.70. First support is December's low crossing at 1182.30. Second support is weekly support crossing at 1179.40.

Corn closed sharply higher on Friday following today's USDA report. The USDA caught the trade leaning the wrong way after releasing a lower than expected corn crop estimate for 2013's crop production and lower than expected ending stocks. The USDA estimated the 2013 corn crop at 13.925 billion bushels. The USDA juggled its harvested acreage and yields, putting the average for the crop nationwide at 158.8 bpa, which was down 1.6 bpa from its last estimate, though acreage went up 436,000. The USDA came in with a lower than expected figure on Dec. 1st corn inventories, which suggests feed usage in the first quarter of the marketing year was good despite the late harvest. That raised the total forecast for feeding during the marketing year by100 million bushels.

The USDA also increased its forecasted usage for ethanol by 50 million bushels due to strong demand. The increase usage from ethanol was offset by a 50 million bushel decline in other industrial usage, leaving ending stocks at 1.631 billion. Today's key reversal up along with the close above the previous reaction high crossing at 4.30 confirmed that a short term low has been posted. The high range close sets the stage for a steady to higher opening when Monday's night session begins trading. Stochastics and the RSI are diverging but are turning neutral signaling additional strength is possible near term. Closes above December's high crossing at 4.40 3/4 are needed to confirm that a seasonal low has been posted. First resistance is the reaction high crossing at 4.36. Second resistance is December's high crossing at 4.40 3/4. First support is today's low crossing at 4.06 1/4. Second support is weekly support crossing at 3.99 3/4.

Coffee closed higher on Friday and the high range close set the stage for a steady to higher opening on Monday. Stochastics and the RSI are diverging but remain neutral to bullish signaling that sideways to higher prices are possible near term. If March extends the aforementioned rally, September's high crossing at 12.40 is the next upside target. Closes below last Thursday's low crossing at 11.02 would confirm that a short term top has been posted.

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Crude Oil, Natural Gas, Gold and Coffee Market Summary for Monday January 6th

Crude oil closed lower on Monday as it extends the decline off December's high. Today's low range close sets the stage for a steady to lower opening when Tuesday's night session begins. Stochastics and the RSI remain bearish signaling that additional weakness is possible. If February extends last week's decline, November's low crossing at 92.10 is the next downside target. Closes above the 20 day moving average crossing at 97.84 are needed to temper the near term bearish outlook. First resistance is the 20 day moving average crossing at 97.84. Second resistance is December's high crossing at 100.75. First support is today's low crossing at 93.20. Second support is November's low crossing at 92.10.

Natural gas closed slightly lower on Monday. The mid range close sets the stage for a steady opening on Tuesday. Stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices are possible near term. If February extends last week's decline, the 38% retracement level of the November-December rally crossing at 4.158 is the next downside target. Closes above the 10 day moving average crossing at 4.388 would temper the near term bearish outlook. First resistance is the 10 day moving average crossing at 4.388. Second resistance is December's high crossing at 4.532. First support is last Friday's low crossing at 4.206. Second support is the 38% retracement level of the November-December rally crossing at 4.158.

Gold closed slightly higher on Monday as it extends the rally off December's low. The high range close sets the stage for a steady to higher opening when Tuesday's night session begins trading. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. If February extends the aforementioned rally, December's high crossing at 1267.50 is the next upside target. If February renews the decline off August's high, weekly support crossing at 1179.40 is the next downside target. First resistance is today's high crossing at 1247.70. Second resistance is December's high crossing at 1267.50. First support is December's low crossing at 1181.40. Second support is weekly support crossing at 1179.40.

Coffee closed sharply higher on Monday renewing the rally off November's low. The high range close set the stage for a steady to higher opening on Tuesday. Stochastics and the RSI are diverging but turning bullish signaling that sideways to higher prices are possible near term. If March extends the aforementioned rally, September's high crossing at 12.40 is the next upside target. Closes below last Thursday's low crossing at 11.02 would confirm that a short term top has been posted.

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Crude Oil Closes Sharply Lower to Start 2014

Crude oil bulls got slaughtered right out of the gate to get 2014 started as crude oil closes sharply lower on Thursday and below the 20 day moving average crossing at 98.23 confirming that a short term top has been posted. The low range close sets the stage for a steady to lower opening when Friday's night session begins. Stochastics and the RSI have turned bearish signaling that additional weakness is likely. If February extends this week's decline, November's low crossing at 92.10 is the next downside target. Closes above the 10 day moving average crossing at 98.77 are needed to temper the near term bearish outlook. First resistance is the 10 day moving average crossing at 98.77. Second resistance is last Friday's high crossing at 100.75. First support is today's low crossing at 95.34. Second support is November's low crossing at 92.10.

Natural gas closed higher due to short covering on Thursday as it consolidated some of Tuesday's sharp decline. The high range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term. If February extends Tuesday's decline, the 38% retracement level of the November-December rally crossing at 4.158 is the next downside target. Closes above the 10 day moving average crossing at 4.403 would temper the near term bearish outlook. First resistance is the 10 day moving average crossing at 4.403. Second resistance is December's high crossing at 4.532. First support is today's low crossing at 4.213. Second support is the 38% retracement level of the November-December rally crossing at 4.158.

Gold closed higher on Thursday due to a short covering rally. The high range close sets the stage for a steady to higher opening when Friday's night session begins trading. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near term. Closes above the 20 day moving average crossing at 1224.00 are needed to confirm that a low has been posted. If February extends the decline off August's high, weekly support crossing at 1179.40 is the next downside target. First resistance is the 20 day moving average crossing at 1224.00. Second resistance is the reaction high crossing at 1267.50. First support is Tuesday's low crossing at 1181.40. Second support is weekly support crossing at 1179.40.

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Commodity Markets Summary for Thursday December 19th

Crude oil closed higher on Thursday renewing the rally off November's low. The high range close sets the stage for a steady to higher opening when Friday's night session begins. Stochastics and the RSI are diverging but are turning neutral to bullish signaling that sideways to higher prices are possible near term. If January renews the rally off November's low, the 50% retracement level of the August-November decline crossing at 99.87 is the next upside target. Closes below the 20 day moving average crossing at 96.19 are needed to confirm that a short term top has been posted. First resistance is today's high crossing at 99.17. Second resistance is the 50% retracement level of the August-November decline crossing at 99.87. First support is the 20 day moving average crossing at 96.19. Second support is November's low crossing at 91.77.

Natural gas closed sharply higher on Thursday renewing the rally off November's low. The high range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are diverging but are turning neutral signaling that sideways to higher prices are possible near term. If January extends the rally off November's low, the 75% retracement level of this year's decline crossing at 4.487 is the next upside target. Closes below the 20 day moving average crossing at 4.104 would confirm that a short term top has been posted. First resistance is today's high crossing at 4.471. Second resistance is the 75% retracement level of this year's decline crossing at 4.487. First support is the reaction low crossing at 4.172. Second support is the 20 day moving average crossing at 4.104.

The March S&P 500 closed lower due to light profit taking on Thursday as it consolidated some of this week's rally. The high range close sets the stage for a steady to higher opening when Friday's night session begins trading. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. If March extends this year's rally into uncharted territory, upside targets will be hard to project. If March renews the decline off November's high, the reaction low crossing at 1738.70 is the next downside target. First resistance is today's high crossing at 1806.10. Second resistance is unknown. First support is Monday's low crossing at 1755.00. Second support is the reaction low crossing at 1738.70.

Gold closed lower on Thursday renewing the decline off August's high. The low range close sets the stage for a steady to lower opening when Friday's night session begins trading. Stochastics and the RSI are diverging but bearish signaling that sideways to lower prices are possible near term. If February renews the decline off August high, June's low crossing at 1187.90 is the next downside target. Closes above last Tuesday's high crossing at 1267.50 are needed to confirm that a low has been posted. First resistance is last Tuesday's high crossing at 1267.50. Second resistance is the reaction high crossing at 1294.70. First support is today's low crossing at 1190.00. Second support is June's low crossing at 1187.90.

COT Fund fav coffee closed lower on Thursday as it consolidates some of the rally off November's low. The low range close set the stage for a steady to lower opening on Friday. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near term. If March extends this month's rally, the reaction high crossing at 12.10 is the next upside target. Closes below the 20 day moving average crossing at 11.04 would confirm that a short term top has been posted.

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The use of cycles is perhaps the most misunderstood areas of technical analysis. And is widely miss used within automated trading systems. This is because there are a wide variety of approaches ranging from magnetic, to astrology to time based cycles.

The purpose of this tutorial on cycle analysis and implementation into automated trading systems is to present a logical perspective on what cycles and how they enhance your technical analysis studies.

Originally I was attracted to cycle analysis back in 2001. Back then, there was very little information about cycle analysis and even less on how to identify them within financial instruments. Cycles can be somewhat measured using conventional indicators such as RSI, stochastics and moving averages.

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Mid Week Market Commentary - Crude Oil, Natural Gas and Gold for Tuesday Evening December 3rd

Crude oil closed sharply higher on Tuesday and above the reaction high crossing at 95.63 confirming that a low has been posted. The high range close sets the stage for a steady to higher opening when Wednesday's night session begins. Stochastics and the RSI are diverging and have turned bullish signaling that sideways to higher prices are possible near term. If January extends the rebound off last week's low, the 38% retracement level of the August-November decline crossing at 97.96 is the next upside target. If January renews the decline off August's high, the 75% retracement level of the April-August rally crossing at 91.18 is the next downside target. First resistance is today's high crossing at 96.19. Second resistance is the 38% retracement level of the August-November decline crossing at 97.96. First support is last Wednesday's low crossing at 91.77. Second support is the 75% retracement level of the April-August rally crossing at 91.18.

Natural gas closed lower due to profit taking on Tuesday as it consolidates some of the rally off October's low. The mid range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term. If January extends the rally off November's low, the reaction high crossing at 4.045 is the next upside target. Closes below the 20 day moving average crossing at 3.731 would confirm that a short term top has been posted. First resistance is the reaction high crossing at 4.045. Second resistance is October's high crossing at 4.092. First support is the 10 day moving average crossing at 3.838. Second support is the 20 day moving average crossing at 3.731.

Gold closed lower on Tuesday as it extends the decline off August's high. The mid range close sets the stage for a steady to lower opening when Wednesday's night session begins trading. Stochastics and the RSI are oversold, diverging but remain neutral to bearish signaling that additional weakness is still possible near term. If February extends the decline off August's high, June's low crossing at 1187.90 is the next downside target. Closes above the 20 day moving average crossing at 1266.60 are needed to confirm that a low has been posted. First resistance is the 10 day moving average crossing at 1243.60. Second resistance is the 20 day moving average crossing at 1266.60. First support is today's low crossing at 1214.60. Second support is June's low crossing at 1187.90.

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Mid Week COT Market Summary for Thursday November 14th

December Nymex crude oil Stochastics and the RSI are diverging but have turned bearish signaling that sideways to lower prices are possible near term. If December extends the decline off August's high, the 75% retracement level of the April-August rally crossing at 91.54 is the next downside target. Closes above the 20 day moving average crossing at 96.14 are needed to confirm that a short term low has been posted. First resistance is the 10 day moving average crossing at 94.18. Second resistance is the 20 day moving average crossing at 96.14. First support is Tuesday's low crossing at 92.86. Second support is the 75% retracement level of the April-August rally crossing at 91.54.

December Henry natural gas trades lower as it consolidates some of the rally off last Tuesday's low. Stochastics and the RSI are neutral to bullish signaling that a low might be in or is near. Closes above the 20 day moving average crossing at 3.623 are needed to confirm that a short term low has been posted. If December renews this year's decline, weekly support crossing at 3.178 is the next downside target. First resistance is the 20 day moving average crossing at 3.623. Second resistance is the reaction high crossing at 3.835. First support is last Tuesday's low crossing at 3.379. Second support is weekly support crossing at 3.178.

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December gold was higher due to short covering on Wednesday night as it consolidates some of the decline off October's high. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term. If December extends the decline off October's high, October's low crossing at 1251.00 is the next upside target. Closes above the 20 day moving average crossing at 1316.40 are needed to confirm that a short term top has been posted. First resistance is the 10 day moving average crossing at 1294.80. Second resistance is the 20 day moving average crossing at 1316.40. First support is Tuesday's low crossing at 1275.80. Second support is October's low crossing at 1251.00.

The December U.S. Dollar traded higher in Wednesday evenings trading but remains below the 38% retracement level of the July-October decline crossing at 81.41. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term. If December extends the rally off October's low, the 50% retracement level of the July-October decline crossing at 82.14 is the next upside target. Closes below the 20 day moving average crossing at 80.26 would confirm that a short term top has been posted. First resistance is last Friday's high crossing at 81.58. Second resistance is the 50% retracement level of the July-October decline crossing at 82.14. First support is the 10 day moving average crossing at 80.96. Second support is the 20 day moving average crossing at 80.26.

How much lower can COT favorite Coffee go? December coffee closed down 295 points at 102.85 cents on Wednesday. Prices closed nearer the session low and scored a bearish “outside day” down on the daily bar chart. The coffee bears have the solid overall near term technical advantage.

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COT Week Ending Market Summary - Crude Oil, Natural Gas, SP 500 nad Gold

October crude oil closed lower on Friday. The high range close sets the stage for a steady to higher opening when Monday's night session begins. Stochastics and the RSI are neutral to bearish hinting that sideways to lower prices are possible near term. Multiple closes below Tuesday's low crossing at 106.39 are needed to confirm that a short term top has been posted. If October renews this summer's rally, weekly resistance crossing at 114.83 is the next upside target. First resistance is August's high crossing at 112.24. Second resistance is weekly resistance crossing at 114.83. First support is Tuesday's low crossing at 106.39. Second support is the reaction low crossing at 103.50.

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October Henry natural gas closed higher on Friday. The high range close sets the stage for a steady to higher opening on Monday. Stochastics and the RSI are turning neutral to bullish signaling that sideways to higher prices are possible near term. If October renews the rally off August's low, the 50% retracement level of the May-August decline crossing at 3.842 is the next upside target. Closes below the 20 day moving average crossing at 3.568 would confirm that a short term top has been posted while opening the door for additional weakness near term. First resistance is the 38% retracement level of the May-August decline crossing at 3.680. Second resistance is the 50% retracement level of the May-August decline crossing at 3.842. First support is the 20 day moving average crossing at 3.568. Second support is August's low crossing at 3.154.

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The December S&P 500 closed higher on Friday. The high range close sets the stage for a steady to higher opening when Monday's night session begins trading. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term. If December extends the rally off August's low, the reaction high crossing at 1684.40 is the next upside target. Closes below the 20 day moving average crossing at 1648.00 would confirm that a short term top has been posted. First resistance is Thursday's high crossing at 1683.00. Second resistance is the reaction high crossing at 1684.40. First support is the 10 day moving average crossing at 1657.60. Second support is the 20 day moving average crossing at 1648.00.

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October gold closed sharply lower on Friday extending the decline off August's high. The low range close sets the stage for a steady to lower opening when Monday's night session begins trading. Stochastics and the RSI remain neutral to bearish signaling that sideways to lower prices are possible near term. If October extends this week's decline, August's low crossing at 1272.10 is the next downside target. Closes above the 20 day moving average crossing at 1380.40 would temper the near term bearish outlook. First resistance is the 20 day moving average crossing at 1380.40. Second resistance is August's high crossing at 1432.90. First support is today's low crossing at 1304.60. Second resistance is August's low crossing at 1272.10.

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COT Market Summary for Wednesday Sept.11th - Crude Oil, Natural Gas, SP 500, Gold and Coffee

October crude oil closed higher due to short covering on Wednesday as it consolidates some of this week's decline. The high range close sets the stage for a steady to higher opening when Thursday's night session begins. Stochastics and the RSI are turning neutral to bearish hinting that sideways to lower prices are possible near term. Multiple closes below the 20 day moving average crossing at 107.45 are needed to confirm that a short term top has been posted. If October renews this summer's rally, weekly resistance crossing at 114.83 is the next upside target. First resistance is August's high crossing at 112.24. Second resistance is weekly resistance crossing at 114.83. First support is the 20 day moving average crossing at 107.45. Second support is the reaction low crossing at 103.50.

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October Henry natural gas closed lower on Wednesday. The mid range close sets the stage for a steady opening on Thursday. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near term. Closes below the 20 day moving average crossing at 3.543 would confirm that a short term top has been posted while opening the door for additional weakness near term. If October renews the rally off August's low, the 50% retracement level of the May-August decline crossing at 3.842 is the next upside target. First resistance is the 38% retracement level of the May-August decline crossing at 3.680. Second resistance is the 50% retracement level of the May-August decline crossing at 3.842. First support is the 20 day moving average crossing at 3.543. Second support is August's low crossing at 3.154.

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The December S&P 500 closed higher on Wednesday as it extends the rally off August's low. The high range close sets the stage for a steady to higher opening when Thursday's night session begins trading. Stochastics and the RSI are overbought but remain bullish signaling that sideways to higher prices are possible near term. If December extends the rally off August's low, the reaction high crossing at 1684.40 is the next upside target. Closes below the 20 day moving average crossing at 1646.12 would confirm that a short term top has been posted. First resistance is today's high crossing at 1680.70. Second resistance is the reaction high crossing at 1684.40. First support is the 20 day moving average crossing at 1646.12. Second support is August's low crossing at 1621.00.

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October gold closed lower on Wednesday extending yesterday's breakout below the 20 day moving average. The high range close sets the stage for a steady to higher opening when Thursday's night session begins trading. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term. If October extends this week's decline, the reaction low crossing at 1351.60 is the next downside target. Closes above the 10 day moving average crossing at 1390.00 would temper the near term bearish outlook. First resistance is the reaction high crossing at 1432.90. Second resistance is May's high crossing at 1489.00. First support is the reaction low crossing at 1351.60. Second resistance is August's low crossing at 1272.10.

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And we just can't help ourselves.....December coffee closed higher on Wednesday and above the 20 day moving average crossing at 118.88 confirming that a low has been posted. The high range close set 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 December extends today's rally, August's high crossing at 12.70 is the next upside target.

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Wednesdays market summary and a U.S. response. Wait for it, wait for it.

It's no surprise that yesterday's news that the U.S. was going to have a military response to Syria spooked the markets and sent the indices to their biggest loss in some time. Today, it looks like the markets are digested what they went through yesterday.

October crude oil closed higher on Wednesday as it extends this summer's rally. Profit taking tempered early session gains and the low range close sets the stage for a steady to lower opening when Thursday's night session begins. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. If October extends this summer's rally, weekly resistance crossing at 114.83 is the next upside target. Closes below the 20 day moving average crossing at 106.04 would confirm that a short-term top has been posted. First resistance is today's high crossing at 112.24. Second resistance is weekly resistance crossing at 114.83. First support is the 20 day moving average crossing at 106.04. Second support is the reaction low crossing at 103.50.

October Henry natural gas closed higher on Wednesday as it extended this month's rally. The high range close sets the stage for a steady to higher opening on Thursday. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term. If October extends this month's rally, the 38% retracement level of the May-August decline crossing at 3.680 is the next upside target. Closes below the 20 day moving average crossing at 3.421 would confirm that a short term top has been posted. First resistance is today's high crossing at 3.628. Second resistance is the 38% retracement level of the May-August decline crossing at 3.680. First support is the 20-day moving average crossing at 3.421. Second support is August's low crossing at 3.154.

October gold closed lower due to profit taking on Wednesday as it consolidated some of the rally off June's low. The low range close sets the stage for a steady to lower opening when Thursday's night session begins trading. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term. If October extends the aforementioned rally, May's high crossing at 1489.00 is the next upside target. Closes below the 20 day moving average crossing at 1346.80 would confirm that a short term top has been posted. First resistance is today's high crossing at 1432.90. Second resistance is May's high crossing at 1489.00. First support is the 10 day moving average crossing at 1383.50. Second resistance is the 20 day moving average crossing at 1346.80.

The September Dollar closed higher on Wednesday. The high range close sets the stage for a steady to higher opening when Thursday's night session begins trading. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near term. Closes above the reaction high crossing at 81.99 are needed to confirm that a short term low has been posted. If September renews the decline off July's high, June's low crossing at 80.61 is the next downside target. First resistance is the reaction high crossing at 81.99. Second resistance is August's high crossing at 82.61. First support is last Tuesday's low crossing at 80.77. Second support is June's low crossing at 80.61.

And last but not least.....September coffee closed higher on Wednesday as it consolidated some of this summer's decline. The high range close set the stage for a steady to higher opening on Thursday. Stochastics and the RSI are oversold but remain neutral to bearish signaling that sideways to lower prices are possible near term. If September renews this month's decline, monthly support crossing at 10.21 is the next downside target. Closes above the 20 day moving average crossing at 118.11 would confirm that a low has been posted.

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