Why the Market Should Pay More Attention to Sports and Poker

Did your coach ever tell you not to signal before you made a move, or do you know why it’s so important to have a good poker face if you’re trying to bluff? It’s because it’s pretty hard to trick a person that can see what you’re going to do next. What does this have to do with trading the markets for consistent profit?


The market signals before just about every move it makes.


So, why doesn’t this make the market incredibly easy to predict? It’s because most traders don’t know the market’s “tell.” That’s why you learn to watch your opponent’s position in sports, or to watch your opponent’s pulse and face in poker. If you don’t know that a nervous twitch means your neighbor is trying to bluff you with his pair of twos, then how do you know he doesn’t have the cards? On the other hand, if you know his “tell”, you can anticipate his bluff even if the rest of the table thinks he’s got a strong hand. Doc Severson spent a lot of time (and a lot more money) looking for those signs in the market, but as James Bond remarks in Casino Royale, “It was worth it to discover his tell.”


Learn the Market’s Tell
 

After years of study and testing (he was an engineer, after all), Doc Severson found a way to see the market “signal” before it makes a move. He used it to position himself before the 2013 S&P rally, and he is seeing the market signal another big move now. He’s already preparing his positions for this move, and he wants to show you how to anticipate them as well.


How to Predict the Next Big Move for Yourself (Free Video)

 

How to Momentum Trade Gold & Silver Stocks

Back on April 9th I posted a short tutorial on how to momentum trade gold along with my short term gold forecast.

Today I wanted to do a follow up video for my gold market traders for three reasons:

1. I had lots of great feedback from traders taking advantage of what I showed to profit in the past week.
2. To show you how and why this strategy works better with gold stocks and silver stocks.
3. To provide my short term gold forecast so you are on the right side of the market for next week.
4. Also you should see my major long term Gold Forecast

 

Get my gold forecast and gold trade alerts at The Gold & Oil Guy

See you in the markets!
Chris Vermeulen


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Understanding Covered Calls

By Dennis Miller

The strategy I’m writing about today is one of my favorite, guaranteed moneymakers. These are trades we can all easily make, requiring no capital outlay and guaranteed to make a profit or you don’t make them. What’s the catch? We might occasionally find ourselves lamenting how much more money we might have made.


Experienced investors have likely figured out that I’m talking about a stock option called a “covered call.” Buying options is for speculators, and that’s not what I’m talking about today. I want to show you the one and only option trade that meets my stringent criteria for comfort.
Covered calls:

• Are easily understood;
• Are easy to implement;
• Require no market timing to make your predetermined profit; and
• Require minimal time for investors to manage.

In addition, you can calculate your profit clearly at the time of the trade (if there’s no hefty gain, you pass on it); the risks are financially and emotionally manageable; and the upside potential is excellent with covered calls. Let’s begin with the boilerplate stuff first before we discuss strategy.

There’s an options market that allows people to buy and sell options on stocks. Speculators have made millions of dollars trading options without owning a single share of stock. That’s the wrong place to be with your retirement nest egg. I’m going to show you how an average investor with an online brokerage account can supplement his income in a safe, easy, responsible, and conservative manner.

Let’s start with a basic premise: money is consistently made on the sell side of the transaction. Selling one type of option is the only strategy that will meet our stringent criteria.

Before we proceed, here’s a need-to-know glossary for covered calls:

Stock option. An option is a right that can be bought and sold. There are markets for trading options in an orderly manner. Two transactions may occur between the buyer and seller. The first is the transaction when the right (option) is sold. The second transaction is “optional” and at the discretion of the buyer. If the buyer exercises his right (option), the seller is required to complete an agreed-upon stock transaction. Today we’re focusing on covered call options.

Covered Calls. When you sell a covered call, the buyer purchases the right to buy a certain number of shares of stock which you own, at an agreed upon (strike) price, at any time before the option expires (known as the expiration date). The option buyer is not obligated to buy your stock; he has the right to do so. You’re obligated to sell the stock if the buyer exercises the option. The term for this is your stock gets “called away.” Regardless, you keep the money you were paid when you sold your option.

There are four elements to an option transaction:

1. the price of the option in the market (what you can buy or sell it for);
2. the number of contracts (each contract is 100 shares);
3. the price of the underlying stock (referred to as strike price); and
4. the expiration date.

Option price. This is the price the option is bought or sold for. This changes as the price of the underlying stock moves in the market and the time frame moves closer to the expiration date. Readers will see that there are two prices: “bid” and “asked,” just like stocks. When you sell an option, this completes the first part of the transaction. The money changes hands and is yours to keep, regardless of what happens later. Cha-ching!

Strike price. This part of the transaction is agreed upon when the option is bought/sold. Let’s assume the buyer purchased a call (a right to your stock) at a strike price of $55/share. Should the buyer choose to exercise his option, the buyer pays you $55/share, and you (through your broker) deliver the stock, regardless of the current market price of the stock.

Expiration date. Options generally expire on the third Friday of every month. When looking at the options trading platform on any major stock, you’ll find options available for several months in advance. You’ll notice that the longer the remaining time, the higher the price of the option.

At the time the stock option is bought/sold, all of the elements above are agreed upon. The buyer has until the expiration date to exercise his option. The numbers of shares and selling price have already been determined. If your stock is called away, you’ll see the cash come in to your brokerage account, and the shares will automatically be delivered to the buyer.

Never sell a call option without owning the underlying stock; it’s much too risky for your retirement nest egg.
Option contract. An option contract is for 100 shares of the underlying stock. Options are sold in contracts, and the prices are quoted per share. For example, if you see an option price of $1.15, the contract will cost $115 ($1.15 x 100 shares). If a buyer/seller wants to have an option on 500 shares, he buys five contracts.

There are two types of options: puts and calls. We’re going to discuss the only option strategy that meets our stringent, conservative criteria: selling a covered call.

Why would an investor buy a call option? Buyers of call options are generally speculators who believe that a stock will appreciate above the strike price before the option expires. If they guess right, they can make a lot of money.

The vast majority of call options expire worthless. The rules are simple. Don’t sell an option unless you own the underlying stock. (This is referred to as a “naked call”.) Don’t buy options—period!

A Savvy Strategy

We’ll use a fictional company – ABC Products – for an example. Say we bought the stock in October 2012 for $40; the market price one year later (in November 2013) was $55/share. Why would we want to sell a covered call?

In November, ABC was $55/share. We’ll say its current dividend is $0.55/share. The March call option at a strike price of $57 is selling for $1.10/share—twice as much as the current dividend.

Assume that on December 20, you either called your broker or went online and brought up ABC in your trading platform. You would have seen the current bid and asked prices. Assume it sold for $1.10/share.
Now, one of four things could have happened:

1. The stock didn’t go over the $57 strike price, so the stock was not called away. In approximately 90 days, you’d have received $0.55/share in dividends, plus $1.10 for the option, for a total of $1.65. You just added more than double the dividend to your yield without spending a penny more of your investment capital. What do we do when the option expires? Look for another juicy opportunity for the June options and do it again!
2. Let’s take the worst case scenario: the market tanked. You had a 20% trailing stop in place. You got stopped out at $44—$11/share lower than the November price. But wait a minute, what about the covered call? The value of the option would also have dropped and sold for mere pennies. If you got stopped out of the stock, you could have bought back the option at the same time. For the sake of illustration, say you bought it back for $0.04. You netted $1.06/share profit. Instead of losing $11/share, your loss became $9.94. If you didn’t buy back your option, you’d have had huge risk exposure should the stock jump back up. It isn’t worth the risk, so you’d spend the few pennies it takes to close out your position.
3. You wanted to exit your position before the expiration date. If the stock rises above the strike price of the option, generally the price of the option will move right along with it. If the stock moved to $59/share, you would “buy to close.” The market price should be close to $2/share; however, that would be offset by the fact that you sold your stock for $59.00 share. If the stock remained stagnant or started to drop and you wanted to exit your position, the market price of the option would decline more rapidly. You’d likely buy back your option at a profit.
4. The most difficult situation emotionally is when the stock rises well above the strike price and gets called. Let’s assume that in March, ABC has appreciated to $59/share. Your option is called at $57 (the strike price). You make a profit of $2/share from the time you sold the option, plus the $1.10/share for the option and the $0.55 dividend, for a total of $3.65/share. For the 90-day time frame, you earned 6.3% on your money ($55/share), or 24.9% on an annualized basis, net of brokerage commission. Yet we’ll lament the fact that you could have made more.

In each case, you haven’t invested any more capital. You make 100% profit on the call in two cases. The worst case is you generally break even on the options should you want to exit early. In the vast majority of cases, selling covered calls is straight profit on top of your dividends.

Here are some guidelines:

• Sell covered calls for stocks you own and would gladly keep.
• Sell covered calls to expire after the dividends are paid.
• Sell covered calls at a strike price above the current market price of the stock, referred to as “out of the money.”
• Don’t lament the times your stock gets called. You took a nice profit, and there are plenty more opportunities out there.
• Use stocks that are heavily traded, as they are more liquid.
• To calculate gains for any stock and option price combination, please use our option calculator, which you can download here.

Selling selected covered calls is a great way to turbocharge yield without any additional investment. At the same time, it will mitigate a bit of risk. If you have a 20% trailing stop in place and the stock gets stopped out, your 20% will be offset by the profit you made on the option sale. While most investors are starved for yield, you can find yield in the safest and easiest manner possible.

Each month, we look at the Miller’s Money Forever portfolio and recommend and track covered calls on some of our positions. If you're not a current subscriber, I highly recommend taking advantage of our 90-day, no-risk offer. Sign up at the current promotional rate of $99/year, and download my book and all of our special reports—really take your time and look us over. If within the first 90 days you feel we're not for you, feel free to cancel and receive a 100% refund, no questions asked. You can still keep the material as our thank-you for taking a look. Click here to subscribe risk-free today.

The article Covered Calls was originally published at Millers Money

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Two Gold Stocks You’ll Wish You Owned in 2013… and Should Still Buy Now

By Laurynas Vegys, Research Analyst

Looking back on 2013, we have to conclude that it was one of the worst years for precious metals stocks in recent memory—despite all the reasons why it should have been a great one.


Here's a sober look at the performance of the most widely followed indices in the precious metals (PM) sector.

It's obvious that 2013 was an extremely painful year for precious metals investors.
Why? Here's a shortlist of some of the most notable reasons.

• We didn't see significant levels of price inflation in the US—the very thing that gold is a good hedge for—so there was no major flow into precious metals in America.

• Precious metals ETFs, like GLD, flooded the market with a massive amount of gold liquidations.

• The European sovereign debt crisis eased up (unless, of course, you live in the PIIGS countries, Cyprus, or pretty much anywhere else in the Eurozone).

• Rumors of the Fed tapering QE continued throughout the year, depressing the gold market and causing extreme volatility. (Oddly enough, the actual taper in December did much less harm than the rumors that preceded it, suggesting it was already priced in when it arrived.)

You can probably think of other reasons, but these no doubt contributed to the industry's precipitous decline.
In such a depressed environment, it's not surprising that almost all gold stocks were down, though our International Speculator portfolio outperformed the market indices. And in fact, two of our portfolio companies—both 2013 recommendations—saw their share prices rise substantially.

Here's how these two stocks performed last year relative to gold and the indices:

The good news is both of these stocks are still "Buys" today, and we're convinced there's much more joy to come…

2014 Winner #1: Profit at Just About Any Price

Never mind simply beating the indices; this company gained a whopping 47.9% last year, due to its unique business model of processing third party gold ore at its plant in South America.

We'd previously been skeptical of this model because ore suppliers are typically small scale and operate with no mine plan. This often causes irregularities in the quantity and quality of the ore received by the mill, which can lead to output and earnings seesawing wildly.

A very compelling angle to this story emerged, however, when the jurisdiction where the company operates decided to crack down on illegal and environmentally unsound ore processing practices. This instantly created a bottleneck, allowing the company to pick and choose its potential suppliers and accept only the highest grade deals.

Our 2014 Winner #1 has been steadily increasing output while keeping tight control over its ore grade and gross margin. One of the most attractive characteristics of its model: The company has been able to lock in a margin that remains stable even when the gold price fluctuates.

On the exploration side, our pick recently delivered high grade drill results at its South American gold project, including some bonanza grade hits. A large, high-grade discovery here could easily drive this stock to become a 10 bagger (i.e., produce gains of 1,000% or more).

However, successful exploration is not required for the shares to continue rising in the coming years, as the company will continue to profit from its gold processing operation.

This gold processor is still one of our favorite International Speculator picks. It will continue to earn record profits this year, even if the gold price goes nowhere—in other words, this stock still has plenty of upside with almost no downside risk.

2014 Winner #2: High-Grade Metal with Proven People

 

Our second favorite pick in 2013 was a new high-grade copper-gold producer in Colombia.

We had been following the story for a while, primarily because we know and trust management (and if you've read Doug Casey for any length of time, you know that "People" is the first and foremost of his Eight Ps of Resource Stock Evaluation).

We didn't recommend the stock the first time we were on site, as metals prices were falling and the company had a big property payment coming due. Flash forward to today: The company raised the money it needed, the resources in the ground have been expanding and at excellent grade, mine upgrades are under way, and the keys to the plant have just been handed over.

The dual copper-gold production is a real boon in our current, low-price environment: Even if gold were to stay down for the rest of the year, the cash flow from the copper (a base metal and, therefore, subject to different economic factors than the precious metals) should keep the company's profits humming along.
We have yet to see financial results from the operation, but we have a great deal of confidence in this mine-building team, one that has delivered for us repeatedly in the past.

Cash flow, and soon thereafter net profits, are an imminent push in this story—though the real jackpot potential comes from the large land package surrounding the company's mine, which holds multiple outcrops of high-grade mineralization that have never been drilled.

Currently, the company is busy expanding its mine, so that exploration work probably won't happen until later this year. But we do think there's a good possibility of some very big news in the second half of 2014—so you'll want to position yourself now, while prices remain relatively low.

Why You Should Own These Stocks This Year

 

Both of the companies—and their share prices—are poised to benefit greatly from increased cash flow, a ramp-up in production, and high-grade drill results.

In addition, 2014 Winner #1, with its ingenious long  term growth model and its ability to profit at just about any gold price, offers minimal downside risk. This company found a creative and profitable way to not only survive last year's downturn but to thrive in the midst of it—and with an effective model in place, it will continue to prosper this year. The tide doesn't need to turn in the precious metals sector for this stock to continue to do well.

Out of fairness to paying subscribers, we can't give you the names of these two companies. But you can find out all about them—plus how to invest and what to expect this year—without any risk to you whatsoever.
Here's what I suggest: Take us up on our 100% satisfaction guarantee and try Casey International Speculator for 3 months. If it's not everything you expected and more, simply cancel for a prompt, courteous refund of every penny you paid.

Even if you decide to cancel ANY TIME after the 3 months are up, you'll still get a prorated refund on the remainder of your subscription. That's our iron clad guarantee, so what do you have to lose? Just click here to get started.


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How Many Day Trading Strategies Do You Need?

Our trading partners at MarketGauge have developed a simple, low risk approach to trading that has rewarded them with amazing profits using simple techniques that leverage the Opening Range. 

And they did it with a maximum risk of only $150 on each trade in a documented account! 

Follow the link below to watch a short video from MarketGauge that shows you how their Opening Range approach allows them to end each month in the black, plus see how you can statistically improve your trading for more consistent gains. 
  
Watch The Short Video Here 

 

During the video you'll discover:

• One simple indicator that dramatically improves the profitability of trading the Open Range 
• How to determine when to trade breakouts vs. reversals for maximum profit 
• How to avoid breakouts that fail AND profit from the reversals
• The ‘best’ way to determine stops and targets for consistent returns 
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After the video be sure to register for a ‘Live’ event with MarketGauge where they will demonstrate these powerful methodologies and show you the ‘only’ day trading strategy you’ll ever need…  Plus see documented proof that their strategy truly creates an advantage for your trading. 

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New video.....How to Profit From Momentum by Trading Market Phases

Today Michelle "Mish" Schneider and the great staff at MarketGauge put their years of experience commodity trading and managing hedge funds to use for us. Showing us how when you define the market phases you put yourself at an advantage on how to approach your trading, because market phases help you determine which direction the market is headed next.
 

Come learn how professional traders apply specific  ‘trade rules’ depending on what phase the market is in to produce greater gains.

Follow the link below to watch a quick video from my friends at MarketGauge that highlights how you can ‘Trade With The Wind At Your Back’. It’s easier than you think to use market phases to gain momentum, and pack BIG gains in your portfolio.

See It Here

In the video you’ll discover how to:

·          Define the market phases to put yourself in a position of power when trading each day.

·          Apply specific ‘trend trade rules’ to current conditions that develop positive momentum for your trading.

·            Identify when the phases will change, leading to massive profit opportunities.

·            Pinpoint the most profitable time to trade for immediate gains.

·        Enter a trend trade before the big move starts, leading to greater gains.

·        Safely trade retracements with HUGE profit potential.
  
       And More…

Don’t just ride the ebbs and flows of the market, get in front of them for larger gain opportunities. Discover how to ‘trade with the wind at your back’ by watching this powerful video.
 

Watch This Video

After the video, be sure to register for special training event from MarketGauge where you will see the ‘Anatomy Of A Perfect Swing Trade’ and learn strategies used by a successful hedge fund manager to read the market, anticipate market swings and ride them with limited risk, and for maximum profit.

See It Here

Welcome aboard Michelle "Mish" Schnieder

We here at the Crude Oil Trader are proud to introduce our newest contributor, Michelle "Mish" Schneider. Mish is well known from her 30 years as an oil/commodities trader as well as being an active hedge fund manager.

And we are lucky enough to have her on board to bring her daily calls to our readers. Make sure you click here to sign up for her "Mish's Market Minute". She will include trade alerts, watch lists, tools, training videos and so much more. Mish's Daily is a concise daily email which gives you insight into what to expect for upcoming short and long term trading opportunities in ETFs that cover the major markets and industry trends.

She is also making her new eBook on swing trading methods available to us.....free of charge.

Just some of the topics she covers in this great eBook are.....

*    Identify (And Trade) Current Market Phases
*    Pinpoint The Most Profitable Time to Trade a Trend
*    Overcome Big Losses And Create Consistent Returns
*    Define Enter And Exit Rules For Maximum Profit
*    Avoid The Common Trader Mistakes That Kill Profits
*     Identify "Super Trends" That Lead to Home Run Trade

And Much More!

So click here and download your copy and welcome Mish aboard!

See you in the markets,
Ray @ The Crude oil Trader

Washington's Goal For Crude Oil Prices.......Everybody Sing "Can You Take Me Higher"

Preparing for our post this morning and another great day of trading I again was struck by the stark contrast in energy policies coming out of Washington and the policies....or should I say PROFITS coming out of CNPC. PetroChina's parent company.

Bloomberg News reported this morning....China National Petroleum Corp., the parent of the country’s biggest oil and gas producer, increased its profit by 30 percent last year as oil prices rose. The majority shareholder in Hong Kong listed PetroChina Co. earned 167.6 billion yuan ($25.4 billion), President Jiang Jiemin said in a statement on CNPC’s website today, without specifying whether the income was before or after tax. Profit reached 128.6 billion yuan in 2009, its annual report shows.

CNPC benefited from the 15 percent jump in oil prices last year and higher output from fields outside China. The Beijing based company, which holds assets and interests in 30 countries, said overall crude output may rise by an average of 2 million metric tons annually during the next five years, and CNPC is targeting a “rapid” increase in gas production.

“The estimated increases make sense,” Yin Xiaodong, chief oil analyst at Beijing based Citic Securities Co., said by telephone. “Gas production growth will definitely outpace increases in oil, and overseas acquisitions will give CNPC a strong boost in the long term.” CNPC’s oil and gas production in countries including Kazakhstan rose 14 percent last year. PetroChina said this week its venture with BP Plc met their 2010 output target for the Rumaila oilfield in southern Iraq.

All of this while oil prices soared after the release of the final scathing report by the White House oil spill commission. Co-Chairman William Reilly alluded to in a press conference that if you thought that the panel investigating the Deep Water Horizon disaster would fade away, well you have another think coming. Mr. Reilly says that he plans to make a “lot of noise”! This of course will send major oil companies scurrying to find oil in far away places that China has been doing business with for years now.

The energy policy coming out of Washington is simple. Make oil as expensive as possible making current food supply issues worldwide and for Americans an even larger burden. And keep the U.S. as reliant as possible on foreign oil and energy. And China just keeps expanding it's oil exploration at alarming rates, and good for them. I found this great website that we all might find very useful. Learn to Speak Chinese, if we are going to need to beg for food we better be using the right language. And yes, our fund has taken larger positions in both etf's MOO and DBA. Our favorite way to play food.

Let's try to make some money today so maybe we can afford that food and here is the numbers we are using........

Crude oil was lower due to profit taking overnight as it consolidates some of this week's rally. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term. If February extends this week's rally, this year's high crossing at 92.58 is the next upside target. Closes below last Friday's low crossing at 87.25 would confirm that a short term top has been posted. First resistance is this year's high crossing at 92.58. Second resistance is weekly resistance crossing at 93.87. First support is last Friday's low crossing at 87.25. Second support is the reaction low crossing at 84.09. Crude oil pivot point for Thursday morning is 91.68.

Natural gas was lower overnight hinting that the two day correction off Monday's low might be ending. Stochastics and the RSI are neutral to bullish signaling that sideways to higher prices are possible near term. If February renews the rally off December's low, the 50% retracement level of the June-October decline crossing at 4.876 is the next upside target. Closes below the 20 day moving average crossing at 4.343 are needed to confirm that a short term top has been posted. First resistance is last Tuesday's high crossing at 4.707. Second resistance is the 50% retracement level of the June-October decline crossing at 4.876. First support is the 20 day moving average crossing at 4.343. Second support is December's low crossing at 3.985. Natural gas pivot point for Thursday morning is 4.510.

Gold was lower overnight as it consolidates some of this week's rally. However, stochastics and the RSI have turned bullish hinting that a short term low might be in or is near. Closes above the 20 day moving average crossing at 1388.10 are needed to confirm that a short term low has been posted. If February renews last week's decline, the reaction low crossing at 1331.10 is the next downside target. First resistance is the 20 day moving average crossing at 1388.10. Second resistance is last Monday's high crossing at 1424.40. First support is last Friday's low crossing at 1356.50. Second support is the reaction low crossing at 1331.10. Gold pivot point for Thursday morning is 1383.70.

Don't miss our latest video "3 Smart Indicators To Trade Crude Oil With Synergism"

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Stock Market and Commodities Commentary For Thursday Evening Nov. 18th

The S&P 500 index closed sharply higher on Thursday as it consolidates some of the decline off last week's high. The high range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term. If December extends the decline off last week's high, the 25% retracement level of the July-November rally crossing at 1169.37 is the next downside target. Closes above the 10 day moving average crossing at 1201.82 would temper the near term bearish outlook. First resistance is the 10 day moving average crossing at 1201.82. Second resistance is this month's high crossing at 1224.50. First support is Tuesday's low crossing at 1175.20. Second support is the 25% retracement level of the July-November rally crossing at 1169.37.

Crude oil closed higher due to short covering on Thursday as it rebounded off the 50% retracement level of the August-November rally crossing at 80.49. The high range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term. If December extends the decline off last week's high, the 62% retracement level of the August-November rally crossing at 78.56 is the next downside target. Closes above the 10 day moving average crossing at 85.05 are needed to confirm that a short term low has been posted. First resistance is the 20 day moving average crossing at 84.04. Second resistance is the 10 day moving average crossing at 85.05. First support is Wednesday's low crossing at 80.06. Second support is the 62% retracement level of the August-November rally crossing at 78.56.

Natural gas closed lower on Thursday as it consolidates some of Wednesday's rally. Stochastics and the RSI are turning bullish signaling that sideways to higher prices are possible near term. If December renews the rally off October's low, the 38% retracement level of the June-October decline crossing at 4.362 is the next upside target. Closes below the reaction low crossing at 3.743 are needed to confirm that a short term top has been posted. First resistance is last Wednesday's high crossing at 4.249. Second resistance is the 38% retracement level of the June-October decline crossing at 4.362. First support is Monday's low crossing at 3.710. Second support is the reaction low crossing at 3.500.

Gold closed higher due to short covering on Thursday as it consolidated some of decline off last week's high. The high range close sets the stage for a steady to higher opening on Friday. Stochastics and the RSI remain bearish signaling that sideways to lower prices is possible near term. If December extends the decline off last week's high, the reaction low crossing at 1315.60 is the next downside target. Closes above the 10 day moving average crossing at 1377.50 would temper the near term bearish outlook. First resistance is the 20 day moving average crossing at 1361.40. Second resistance is the 10 day moving average crossing at 1377.50. First support is Tuesday's low crossing at 1329.00. Second support is the reaction low crossing at 1315.60.

The U.S. Dollar closed lower due to profit taking on Thursday as it consolidates some of this month's rally. The mid-range close sets the stage for a steady to lower opening on Friday. 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 77.75 are needed to confirm that a short term top has been posted. If December extends this month's rally, the 38% retracement level of this year's decline crossing at 80.54 is the next upside target. First resistance is Tuesday's high crossing at 79.59. Second resistance is the 38% retracement level of this year's decline crossing at 80.54. First support is the 20 day moving average crossing at 77.75. Second support is this month's low crossing at 75.24.


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