Crude Oil Market Continues to Tease Us With It's Sideways Action

The crude oil market continues to tease us with its sideways action. While this market has been trending to the upside, we want to pay particular attention to the uptrend line from August 9th through today. We do not think that the crude oil market is ready to go higher based on our long term monthly Trade Triangle, which continues to be negative for this market.

The $90 a barrel resistance continues, as the market has had a difficult time moving over that area and maintaining a positive close above that zone. Look for crude oil to continue to move in a sideways to lower manner.

Crude oil closed higher on Thursday and remains poised to extend the rally off August's low. The high range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI are overbought, diverging but are neutral to bullish signaling that sideways to higher prices are still possible near term.

Closes above the May-July downtrend line crossing near 92.64 would confirm an end to this summer's decline. Closes below Monday's low crossing at 85.17 would confirm an end to the corrective rally off August's low.

First resistance is Tuesday's high crossing at 90.60. Second resistance is the May-July downtrend line crossing near 92.64. First support is Monday's low crossing at 85.17. Second support is the reaction low crossing at 83.47.

Monthly Trade Triangles for Long Term Trends = Negative
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short Term Trends = Positive
Combined Strength of Trend Score = + 70

Get My Free Weekly Index & Commodity Forecast

Crude Oil and Natural Market Commentary For Thursday Morning

Crude oil was higher overnight as it extends the rally off this month's low. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term.

If February extends this rally, the reaction high crossing at 80.40 is the next upside target. Closes below the 20 day moving average crossing at 75.47 are needed to confirm that a short term top has been posted.

Thursday's pivot point, our line in the sand is 79.18

First resistance is the overnight high crossing at 79.98
Second resistance is the reaction high crossing at 80.40

First support is the 10 day moving average crossing at 76.77
Second support is the 20 day moving average crossing at 75.47

Just click here for your FREE trend analysis of USO

Natural gas was higher due to short covering overnight as it consolidates some of Wednesday's decline but remains below broken support marked by the 10 day moving average crossing at 5.801. Stochastics and the RSI are overbought, diverging and are turning bearish signaling that sideways to lower prices are possible near term.

Closes below the 20 day moving average crossing at 5.475 are needed to confirm that a short term top has been posted. If February resumes this month's rally, the 87% retracement level of the October-December decline crossing at 6.077 is the next upside target.

Natural gas pivot point for Thursday is 5.770

First resistance is Tuesday's high crossing at 6.038
Second resistance is the 87% retracement level of the October-December decline crossing at 6.077

First support is the overnight low crossing at 5.679
Second support is the 20 day moving average crossing at 5.475

Just click here for your FREE trend analysis of UNG

The U.S. Dollar was lower overnight and is trading below initial support marked by the 10 day moving average crossing at 78.20. Stochastics and the RSI have turned bearish hinting that a short term top might be in or is near.

Closes below the 20 day moving average crossing at 77.36 are needed to confirm that a short term top has been posted. If March renews this month's rally, the 38% retracement level of the 2008-2009 decline crossing at 79.72 is the next upside target.

First resistance is last Tuesday's high crossing at 78.77
Second resistance is the 38% retracement level of the 2008-2009 decline crossing at 79.72

First support is Tuesday's low crossing at 77.67
Second support is the 20 day moving average crossing at 77.36

Just click here for your FREE trend analysis of UUP


Share