Markets Close Lower, Bulls Maintain The Advantage For Wednesday Morning

The S&P 500 index closed lower due to profit taking on Tuesday as it consolidates some of last week’s rally. The low range close sets the stage for a steady to lower opening on Wednesday. Stochastics and the RSI remain bullish signaling that additional gains are possible near term. If September extends last week’s rally, August’s high crossing at 1127.50 is the next upside target. Closes below the 10 day moving average crossing at 1067.21 would confirm that a short term top has been posted. First resistance is today’s high crossing at 1107.10. Second resistance is August’s high crossing at 1127.50. First support is the 20 day moving average crossing at 1074.61. Second support is the 10 day moving average crossing at 1067.21.

Crude oil closed lower on Tuesday due to profit taking but remains above the 10 day moving average crossing at 73.66. The mid range close sets the stage for a steady opening on Wednesday. Stochastics and the RSI remain bullish signaling that sideways to higher prices are possible near term. Closes above the reaction high crossing at 75.58 are needed to confirm that a short term low has been posted. If October renews the decline off August’s high, May’s low crossing at 70.35 is the next downside target