Dec Gold: Gold prices continue to post new record highs with Thursday’s move stretching to 13881 before pulling in to close at 13776 on the day. This market is a runaway train right now and it’s tough to step in front of it on the short side, however, daily charts are beginning to send out warnings. Thursday’s session ended with the formation of a ‘Shooting Star’ candlestick, a potentially bearish signal. In addition, the RSI has been running overbought and now showing negative divergence in a similar pattern seen in Nov. 2009 that resulted in a violent $150 correction.
We are not suggesting going short, but the thinking is to lighten long positions or buy some protection, possibly puts. All that being said, we still need to see confirmation, starting with a settlement below 13700 on the week that would indicate the beginning of a peaking turnover. If the 13881 record high is violated, anticipate a run at 14000 while still remaining cautious with the overbought RSI.
Today’s bias is Flat to Lower based on the ‘shooting star’ pattern with scalping opportunities on both sides. Sellers can look to scalp against the 13790 Pivot and the 13830 X Resistance zone with a target at 13711-13700 XX Support if 13757 is penetrated. A drop below 13700 accelerates selling today targeting XXX Support at 13660-13650.
On the upside, buyers can scalp against 13776-13575 X and 13711-13700 XX Support using objectives at 13830 X to 13881 XX Resistance. A punch through 13881 renews Bull forces triggering the next leg up to 13960 XXX target with a strong chance to print 14000.
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Nov Crude Oil: Crude prices ended lower on Thursday after rally efforts were halted at the 8400 area resulting in a choppy defensive session. The market settled down 72 cents at 8269. The failed rally left last week’s Bearish Engulfing pattern in play which signals Mixed to Lower action for today. A settlement below 8100, the low of the Bearish Engulfing pattern, confirms a turnover developing into next week. A close above 8443 is needed to fully invalidate the pattern.
Heading into the pit session, trade is slightly lower and battling the 8235-8200 X Support range. If the Bulls defend here early on, expect an early bounce targeting 8265-8270 X and 8300 XX Pivot Resistance zones. Cover longs as we’ll need a break above 8310 to generate rallies to 8350-8365 XXX up to 8400-8412 XXXX.
On the sell side, sellers can scalp against 8265-8270 X and 8300 XX Pivot Resistance zones using 10-15 cent suggested Stops above each range. Overall, failures to trade above 8310 keeps the action defensive while threatening to break 8200. Trade below 8200 opens the door to Bearish momentum targeting 8165-8150 XX and 8100-8088 XXX Support zones.
Nov Cracks: Both cracks fell on Thursday led by heavy selling in the Gas while the Heat chopped around in negative territory for the session. Overnight action shows the cracks pulling in opposite directions with the Gas modestly higher and Heat slightly lower.
The Gas Crack is biased to the Bulls with trade set to open above the 700 level after holding the 14-day uptrend line overnight at 680. The 700 level is key to sustaining a Bull bias today while trade solidifying above the 720 Pivot sparks rallies to 750 XX and 775-782 XXX Resistance targets. On the downside, a turn back through 700 will likely generate a retest of 680-665 XX Support (14-day trend and yest. Low). Failures to reclaim 704 Settlement thereafter calls for drives to 650-630 XXX support with a chance to sweep down to 600-585 XXXX extension target.
The Heat Crack is Flat to Higher today with trade hovering around the 1307 triple bottom ahead of the pit open. If trade can hold 1307, expect sideways to higher action working into the 1323-1345 X Resistance range. Trade above 1345 is moderately Bullish in intra-day action targeting this week’s key highs at 1362-1385 XX Resistance with only a slight chance to breakout to 1415-1450 XXX Resistance. On the downside, trade falling below 1307-1315 X Support alerts for a Bear Flag breakdown initially targeting weekly and 4Q lows at 1290-1280 XX Support. A punch through 1280 is Bearish on the crack igniting sharp sell offs to 1250-1225 XXX Support target with a chance for sweeps to 1200-1175 XXXX extension target.
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Nov Natural Gas: Rally efforts on Thursday continued to hit a Resistance wall at 3760-3800 area resulting in late day selling and a lower close on the day. Natty prices settled at 3657 losing 3.9 cents on the day. The inability to post a close above 3705 Weekly Pivot leaves the outlook Bearish today. Trade above 3705 is neutral to modestly bullish with retesting of the weekly highs at 3760-3777 possible.
Heading into the pit session, trade is around unchanged with a sell rallies bias to start against 3670 to 3705 X Pivot Resistance. Failures from X Resistance will look to spark selling against 3633-3620 X and 3595-3583 XX Support targets. A punch through 3583 drives prices to the 4Q low at 3545 XXX with a good chance to post new 4Q lows at the 3500 XXXX target.
On the upside, trade above 3705 alerts for another upward attempt targeting 3735-3777 XX Resistance with room to 3800. We’ll be looking for pullbacks from there to hold 3705-3670 as an indication the Bulls will mount a strong attack on 3800. Breakout trade above 3800 opens the door to a solid rally targeting 3888-3910 XXX Resistance.
Dec E-mini S&P: S&P’s traded mixed on Thursday, selling off from a double top at 1181 to 1163 before recovering to close unchanged on the day at 1174. Pre-market action is gaining steam ahead of the primary open though with a double top in place at 1181, we’re looking at a Flat to Lower bias today. If 1181 is taken out, the Bulls will resume control today.
Sellers can look to short failures at 1180-1181 X Resistance, playing the double top, with Stops above 1182 suggested while looking for corrective trade to kick in. Initial objective to test 1173 settlement/Pivot. Trade below 1173 generates selling pressure targeting 1169 XX Support and 1165-1163 XXX Support. With the 34-day uptrend line at yesterday’s 1163 low, a punch through there opens the flood gates for a washout to 1153-1152 XXXX.
On the upside, maintaining dips against 1173 X Pivot/Settlement Support offers buy scalping opportunities for continued testing of 1180-1181 X Resistance. A break above 1181 triggers the next round of solid buying targeting 1184 XX to 1188-1190 XXX while bringing the 1200 mark in range for next week.
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