Dollar Closes Below 10 Day Moving Average, Sets Up Higher Open For Crude Oil Wednesday

Crude oil closed higher on Tuesday and above the 25% retracement level of the 2008-2009 decline crossing at 68.49. The high range close sets the stage for a steady to higher opening on Wednesday.

Stochastics and the RSI are overbought, diverging but are turning neutral signaling that sideways to higher prices are possible near term.

If July extends the rally off April's low, the 38% retracement level of the 2008-2009 decline crossing at 82.38 is the next upside target. Closes below the 20 day moving average crossing at 63.77 would confirm that a short term top has been posted.

First resistance is last Friday's high crossing at 70.32.
Second resistance is the 38% retracement level crossing at 82.38.

First support is the 10 day moving average crossing at 67.34.
Second support is the 20 day moving average crossing at 63.77.

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The U.S. Dollar closed sharply lower on Tuesday due to profit taking as it consolidated some of the rally off last week's low. The low range close sets the stage for a steady to lower opening on Wednesday.

Stochastics and the RSI remain bullish signaling that sideways to higher prices are still possible near term. However, today's close below the 10 day moving average crossing at 79.85 tempers the near term friendly outlook in the market.

If June extends the rebound off last week's low, the reaction high crossing at 83.33 is the next upside target.

First resistance is Monday's high crossing at 81.53
Second resistance is the reaction high crossing at 83.33

First support is today's low crossing at 79.70
Second support is last Tuesday's low crossing at 78.18

Video: “How Low Can The Dollar Go”

Natural gas closed slightly higher on Tuesday due to light short covering as it consolidated some of Monday's decline. The mid range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near term.

If July renews last month's decline, April's low crossing at 3.395 is the next downside target. Closes above the 20 day moving average crossing at 3.988 would confirm that a short term low has been posted.

First resistance is the 10 day moving average crossing at 3.871
Second resistance is the 20 day moving average crossing at 3.988

First support is last Thursday's low crossing at 3.550
Second support is the reaction low crossing at 3.500

Crude Oil Closes Above $70, First Time Since November

"Crude Oil Rises for First Time in Three Days on Dollar Decline"
Crude oil rose for the first time in three days as the dollar fell against the euro, bolstering the appeal of energy and metals as an alternative investment. Oil advanced more than 3 percent as rising stock prices reduced the need for holding the U.S. currency as a refuge. The U.S. Energy Department will probably report tomorrow that refiners boosted operating rates to meet summer gasoline demand, according to a Bloomberg News survey.....Complete Story


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"Economy, Higher Oil Prices May Restart Shelved Projects"
A rebound in oil prices and signs of economic recovery are renewing interest in exploration and production, but producers are still wary of volatility and determined to cut construction and service costs, which surged last year after oil prices spiked to record levels. Crude oil prices have risen back above $60 a barrel, from a low of around $42 earlier this year, and are expected to rise further in the next few years as supply.....Complete Story

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"U.S. Senate Panel Approves More Offshore Drilling"
A U.S. Senate panel approved expansion of offshore oil and natural gas drilling, opening more of the eastern Gulf of Mexico to energy development. The Senate Energy and Natural Resources Committee voted 13-10 today in favor of an amendment to expand drilling, as part of its debate over pending energy legislation. Former President George W. Bush removed a presidential moratorium on offshore drilling last year, and Congress let a ban expire after oil prices reached a record $147.27 a barrel. The amendment.....Complete Story

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Lower Prices Still Possible For Natural Gas

Natural gas was higher in overnight trading Monday night as it consolidated below the 10 day moving average crossing at 3.875. Stochastics and the RSI are neutral to bearish signaling that sideways to lower prices are possible near term.

If July extends last week's decline, the reaction low crossing at 3.500 is the next downside target. Closes above the 20 day moving average crossing at 3.990 would signal that a short term low has been posted.

Closes above last Tuesday's high are needed to renew the rally off the late May low and would open the door for a possible test of May's high crossing at 4.690.

Tuesday's pivot point for natural gas is 3.76

First resistance is the 10 day moving average crossing at 3.875
Second resistance is the 20 day moving average crossing at 3.990

First support is last Thursday's low crossing at 3.550
Second support is the reaction low crossing at 3.500

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Crude Oil Trading Higher, Is $70 Our Near Term High

Crude oil was higher overnight as it consolidates around the 25% retracement level of the 2008-2009 decline crossing at 68.49. Stochastics and the RSI are turning bearish hinting that a short term top might be in or is near.

As of 8:51 a.m. eastern standard time Globex traders were trading crude oil at 69.34, very close today's first resistance.

Closes below the 20 day moving average crossing at 63.71 are needed to confirm that a short term top has been posted.

If July extends this spring's rally, the 38% retracement of the 2008-2009 decline crossing at 82.38 is the next upside target.

Tuesday's pivot point, our line in the sand is 67.94

First resistance is last Friday's high crossing at 70.32
Second resistance is the 38% retracement level crossing at 82.38

First support is the 10 day moving average crossing at 67.23
Second support is the 20 day moving average crossing at 63.71

4:30 AM ET. June 5 API Oil Industry Report

....Crude Stocks (Net Change) (previous -828K)

....Gasoline Stocks (Net Change) (previous +99K)

....Distillate Stocks (Net Change) (previous +3.44M)

....Refinery Runs (previous 82.9%)

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Crude Oil Struggles As The U.S. Dollar Closes Higher

Nothing is more important to trading crude oil than the U.S. Dollar. And the Dollar closed higher on Monday, above the 20 day moving average crossing at 80.80 confirming that a short term low has been posted, spelling trouble for crude oil bulls.

Profit taking tempered early gains and the low range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term.

If June extends the rebound off last week's low, the reaction high crossing at 83.33 is the next upside target. Closes below the 10 day moving average crossing at 79.88 would temper the near term friendly outlook in the market.

First resistance is today's high crossing at 81.53
Second resistance is the reaction high crossing at 83.33

First support is the 10 day moving average crossing at 79.88
Second support is last Tuesday's low crossing at 78.18

If you would like to trade the dollar itself your best choice of tickers would be the UUP. Here is a Free Stock Analysis for UUP.

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Natural Gas Closes Lower, Even Lower Prices Still Possible

Natural Gas closed lower on Monday as it extended last week's decline. The low range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI are bearish signaling that sideways to lower prices are possible near term.

If July renews last month's decline, April's low crossing at 3.395 is the next downside target. Closes above March's high crossing at 4.721 are needed to confirm that an important bottom has been posted.

First resistance is the 20 day moving average crossing at 4.021
Second resistance is last Tuesday's high crossing at 4.284

First support is last Thursday's low crossing at 3.550
Second support is the reaction low crossing at 3.500

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Crude Oil Falls, Brazil Proposes New Tax, Natural Gas at it's Cheapest

"Crude Oil Falls, Following Stocks Lower, as Dollar Strengthens"
Crude oil fell for a second day, following global equities, as a stronger dollar reduced the appeal of commodities as an alternative investment. Prices declined as much as 2.4 percent after stocks fell and the U.S. currency gained against the euro for a second day. The stronger currency undermines demand for dollar priced assets such as oil and gold. Oil futures touched a seven-month high of $70.32 on June 5 after a Labor Department report.....Complete Story

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"Brazil to Propose New Tax on Newfound Offshore Oil"
The Brazilian government will propose an additional tax on crude oil produced from the country's newfound offshore deposits, the O Estado de S. Paulo newspaper reported Monday. The tax will be part of a new regulatory regime proposed by a government panel studying possible changes to Brazil's oil laws, the report said. The proposals are expected.....Complete Story

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"Natural Gas Cheapest to Oil Since 1992 Signals Gain"
This year’s 31 percent decline in natural gas made it the worst performing commodity and the cheapest next to oil since the fall of the Soviet Union. That’s about to change, if history is any guide. Natural gas lost 72 percent in 11 months as the U.S. fell into the deepest recession in 50 years and drillers failed to idle rigs fast enough to control inventories. Stockpiles are 22 percent larger than the five year average.....Complete Story

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Crude Oil Inventories For This Week

Oil prices moved higher last week lead by traders feeling that the economy may be recovering. There is just no real evidence that the recession has even come close bottoming out. Fundamentals do not support the current price of oil, it is inflated as fundamentals have been ignored.

Here is a quick look at crude oil inventories for the last week.....



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Stronger Dollar Overnight Threatens Crude Oil Rally On Monday

July crude oil was lower overnight due to profit taking as it consolidates some of this spring's rally. Stochastics and the RSI are overbought and are turning bearish hinting that a short term top might be in or is near.

Day traders will continue to look for bullish set ups until they fail, and will until we close below the 20 day moving average crossing at 63.21. Which is needed to confirm that a short term top has been posted.

If July extends this spring's rally, the 38% retracement of the 2008-2009 decline crossing at 82.38 is the next upside target.

Monday's pivot point, our line in the sand is 68.77

First resistance is last Friday's high crossing at 70.32
Second resistance is the 38% retracement level crossing at 82.38

First support is the 10 day moving average crossing at 66.53
Second support is the 20 day moving average crossing at 63.21

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The June Dollar was higher overnight and trading above the 20 day moving average crossing at 80.82. Stochastics and the RSI are bullish signaling that sideways to higher prices are possible near term. Closes above the 20 day moving average crossing at 80.82 would confirm that a short term low has been posted.

If June renews the decline off April's high, the 75% retracement level of the aforementioned rally crossing at 77.55 is the next downside target.

First resistance is the overnight high crossing at 81.53
Second resistance is the reaction high crossing at 83.33

First support is the 10 day moving average crossing at 79.93
Second support is last Tuesday's low crossing at 78.37

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The S&P 500 was lower overnight due to profit taking as it consolidates some of this spring's rally. Stochastics and the RSI are overbought but remain neutral to bullish signaling that sideways to higher prices are possible near term.

Day traders will continue to look for bullish set ups until they fail. Monday's pivot point is 944 but day traders will be looking at 934.50 as a critical level of support to give serious market direction indication. If we break through 944 look for the next daily target of 957.50 as an exit point.

If the overnight strength in the dollar takes the market lower look for the first battle ground at 927.50, the trading hours only previous highs.

If June extends this spring's rally, the 38% retracement level of the 2008-2009 decline crossing at 1040.33 is the next upside target. Closes below the 20 day moving average crossing at 910.58 would confirm that a short term top has been posted.

Monday's pivot point, our line in the sand is 944

First resistance is last Friday's high crossing at 957.50
Second resistance is the 38% retracement level crossing at 1040.33

First support is the 10 day moving average crossing at 927.50
Second support is the 20 day moving average crossing at 910.58

The June S&P 500 Index was down 8.30 points. at 932.20 as of 6:00 AM CST. Overnight action sets the stage for a lower opening by the June S&P 500 index when the day session begins later this morning.

And Where The S & P 500 Went, Crude Oil Was Sure To Follow

Well, maybe it won't "always" follow. But let's take a look at this conundrum wrapped in an enigma… that’s the S&P 500 index.

We were just looking at the S&P 500 index as we came to the close for the week of June 6th. While the market appears to be higher for the week, it also appears that we’re losing momentum on the upside.

This can be seen in the second attempt to close over the 950 level. Also some of our momentum indicators are showing negative divergences. This means that while the S&P 500 is making new highs for the move, the momentum indicators are not showing the same configuration and making new highs. This can often be the first clue of a potential market correction.

In this short video on the S&P 500, you’ll will see exactly what we are looking at and why.

The video is free to watch and there is no need to register. We would love to get your feedback about this video and your own predictions about these markets. So please feel free to leave a comment and let our readers know what you think.

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