(CME:ESH14) - Near-term target 1825; however we are still data dependent: Equities used an early dip against the 50-day moving average to sling shot reverse and the S&P 500 put in new yearly highs. As we have been discussing here, traders and investors need to look to dips as buying opportunities. The reality is the taper has started and will likely continue, but that means that economic conditions have improved enough to warrant this. The next upside targets are now 1825 and 1853; a close above previous highs at 1805.75 will help create a melt-up to this level. With the 20-day moving average now coming in at 1788, this will be a major momentum indicator; a close below here will signal a failed bullish leg.
Resistance - 1805.75***, 1825**, 1853***
Support -1793*, 1788**, 1779*, 1767*, 1755.75**, 1747.50-1750***
(NYMEX:CLG14) - Be patient; look for extreme highs to sell: Crude oil traded in a range just under $1 in reaction to the Fed’s decision to begin the taper but ultimately settled back in the middle of the day’s range at $97.86 for the February contract. With the January contract expiring today, everyone should be using the February contract that trades roughly a quarter higher. Resistance remains at yesterday’s high of $98.30, which coordinates closely with our $97.72-$97.90 level for January. A close above here is needed to signal a push higher that will test the 100-day moving average that comes in at $99.05 and aligns with the highs from Dec. 10 and Dec. 11 at $98.92 and a major 50% retracement at $99.16. The lows of yesterday’s session were $97.27. A close below here will bring the 50- and 200-day moving averages quickly into play, which come in at $96.69 and $96.25, and potentially create a death cross with a close below this level. With the dollar strengthening into the close of the session look for a move back above 81 to put downward pressure on crude.
Resistance – 98.30*, 98.92-99.16***, 100.82***
Support – 97.27*, 96.52-96.69***, 96.25***, 95.51**, 94.71***