Big Resistance Tests Being Taken Most Seriously by Crude Oil

By Rod David  SEP 04, 2012 4:20 PM

Crude oil may be the only pre-weekend trend capable of resuming.


The following are the latest daily summaries of my ongoing intraday coverage, providing context to interpret price action. Any prices listed are for a contract's current "front month." Their direction tends to correlate with any ETFs listed for each.

Today’s Highlight: The three-day weekend didn’t interfere with Friday’s trending attempts. But Tuesday’s extensions were not maintained. Crude oil may be the only pre-weekend trend capable of resuming because its ultimate reaction down Tuesday was a little too aggressive.

Dollar Basket
Sep Contract DX; (UUP), (UDN)
Tuesday’s weakness barely attacked Friday’s low, which was a reaction to Bernanke’s comments. This performance relative compared to the euro suggest that a turning point is still forming.

Sep Contract EC; (FXE)
Tuesday’s high attacked Friday’s Bernanke highs, again probing prior highs intraday, but failing again to close above them. This is distributive action, and filling gaps outstanding below at 1.2500-1.2515 may accelerate a reaction down into a bigger drop.

Dec Contract GC; (GLD)
Tuesday’s high fulfilled the 1700.00 target, and held it. Pullbacks have room all the way down to 1673.50 without reversing momentum down or invalidating potential for extending up to 1744.00. That’s a lot of room, especially with the euro’s current challenges to extending higher.

Sep Contract SI; (SLV)
Friday’s break above 31.00 that put into play the 33.00 target extended higher Tuesday to 32.44. There is room for noise down to 31.80, and room for a pullback down to 31.30 without reversing momentum down.

30-year Treasury
Sep Contract US; (TLT)
Fresh highs overnight held a test of 150-26 to allow a pullback or reversal to begin. But a close back under “lower prior highs” like 149-18 is needed before offering any compelling risk:reward ratio.

Crude Oil
Oct Contract CL; (USO)
An overnight probe above 97.00 resistance was rejected to avoid confirming a new rally leg underway. A session that contains a fresh high cannot also signal the trend reversing down. So probing under the 96.15 pullback limit down to 94.97 expended a lot of selling pressure without sellers gaining traction for their effort. Back above 96.50 should trigger a new and durable upleg. Closing under 94.80-94.85 would signal at least a deeper pullback underway.

Natural Gas
Oct Contract NG; (UNG), (UNL)
The 2.89 bounce target was tested almost immediately Tuesday. The balance of the session ranged narrowly, which allows the bounce to extend higher so long as 2.78-2.82 now holds as support.

Editor's note: Rod's analytical techniques are designed to efficiently identify targets and turning points for any liquid stock or market in any time frame. He applies his techniques live intraday, primarily to S&P futures, at RodDavid .com.
No positions in stocks mentioned.

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