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Thursday, March 26, 2015

SELF-DIRECTED TRADING & INVESTING MADE SIMPLE

April gold closed higher on Wednesday as it extends the rally off last week'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 bullish signaling that sideways to higher prices are possible near-term. If April extends the rally off last week's low, the 38% retracement level of the January-March-decline crossing at 1205.50 is the next upside target. Closes below the 10-day moving average crossing at 1168.50 would confirm that a short-term top has been posted. First resistance is today's high crossing at 1199.30.

Second resistance is the 38% retracement level of the January-March-decline crossing at 1205.50.

First support is the 10-day moving average crossing at 1168.50. Second support is March's low crossing at 1141.60.

Crude Reports

May crude oil closed higher on Wednesday as it extends the rally off March's low. The high-range close sets the stage for a steady to higher opening when Thursday's night session begins.

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 49.30 would confirm that a short-term low has been posted.

If May resumes this month's decilne, weekly support crossing at 39.44 is the next downside target.

First resistance is the 20-day moving average crossing at 49.30. Second resistance is March's high crossing at 54.00.

First support is last Wednesday's low crossing at 44.03. Second support is weekly support crossing at 39.44.

•Crude oil futures surged on Wednesday, amid increasing geopolitical risks related to the advance of the Iranian-backed Houthi rebels in Yemen.

•Global oil prices spiked by more than a dollar on Wednesday afternoon, as reports surfaced that Saudi Arabia is moving heavy military equipment, including artillery to its border with Yemen.

The buildup came in response to the seizure of the al-Anad base, a Yemen airbase that had previously been used by U.S. troops in their fight against Al-Qaeda.

•Yemen is strategically located on the Bab el-Mandab, a strait that connects the Gulf of Aden with the Red Sea. In mid-November, the Energy Information Administration (EIA) ranked the Bab el-Mandab the fourth-largest chokepoint in the world for global oil transport (3.8 million barrels per day).

•Oil traders are sensitive to risky geopolitical news involving Saudi Arabia, which has 16% of the world's oil reserves and maintains the world's largest crude oil production capacity.

The developments in Yemen offset relatively soft inventory data released on Wednesday afternoon. In its weekly report, the EIA said that U.S. crude inventories for the week ending March 20, increased by 8.2 million barrels from the previous week.