Crude Oil Bounced Back to Its Bounce Limit Today

By Rod David  SEP 25, 2012 3:50 PM

A look at intraday action in commodities.


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: Tuesday failed in its early attempts to undo Monday’s efforts. This was especially true with crude oil’s bounce back to its bounce limit, which was retraced back down to Monday’s low.

Dollar Basket
Tuesday’s initial weakness extended to fill the gap back down to Friday’s 79.40 close. Its support held, allowing an afternoon bounce that retraced 61.8% of the drop from recent highs.

Dec Contract EC; (NYSEARCA:FXE)
Tuesday’s initial strength did not extend very far. And it was finally retraced into negative territory late in the day. But Tuesday’s extra gain up to 1.2983 allowed the reaction down to 1.2930 to hold a 61.8% retracement back to Monday’s 1.2902 low. Any immediate strength Wednesday would again be credible for extending higher.

Dec Contract GC; (NYSEARCA:GLD)
Monday’s extension down from Friday’s peak $32 higher may have ended the drop faster than it was signaled. But that required immediately resuming the rally effort to validate Friday’s highs. Tuesday’s opening attempt was retraced back to unchanged, keeping alive the potential recovery, but still not allowing any dip into negative territory.

Dec Contract SI; (NYSEARCA:SLV)
Apparently Monday did expend more selling pressure than could be expended so quickly. Tuesday’s open gapped up above Monday’s high. But a reversal dipped back into negative territory, threatening to close lower and confirm a new downleg was underway. Otherwise, back above 34.55 would trigger one final upleg targeting 35.40.

30-year Treasury
Dec Contract US; (NYSEARCA:TLT)
Despite retracing Tuesday’s gap up back into negative territory, the afternoon recovered to fresh highs at 148-13. This does not change the 147-04 sell signal, but back under 147-09 would offer an early warning that the sell signal should at least be probed.

Crude Oil
Nov Contract CL; (NYSEARCA:USO)
Tuesday’s gap up tested the 93.00 bounce limit, but subsequent weakness held it, and kept in-play the next lower targets at 89.75 and 87.00.

Natural Gas
Fresh highs tested 2.90 Tuesday for the first time in a week. Its recovery would resume the rally next targeting 3.25.

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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