Crude Oil's Fresh Low May Merit Lowering Targets

By Rod David  OCT 03, 2012 3:35 PM

Take a look at the 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: Crude oil’s corrective bounce ended abruptly Wednesday. The reaction seemed somewhat outsized compared to the news that triggered it, so I may be lowering my next target soon.

Dollar Basket
Dec Contract DX; (NYSEARCA:UUP), (NYSEARCA:UDN)
Tuesday’s touch of 70.55 support did prove to be the range’s lower-end when Wednesday gapped up to test the 80.10 prior high at the range’s upper-end. A breakout must trigger without delay Thursday to extend the rally, or else a drop back to and through the range’s lower-end would become likely.

Eurodollar
Dec Contract EC; (NYSEARCA:FXE)
Tuesday’s temporary intraday probe above prior highs did prove to be “ineffectual optimism” when Wednesday slid back to Monday’s 1.2900 close. That’s less damaging than the session could have been, so a bounce back above 1.2955 would be credible for triggering a rally targeting the 1.3100 area.

Gold
Dec Contract GC; (NYSEARCA:GLD)
Wednesday’s narrow intraday ranging offered no new information, other than to confirm the rally’s momentum is not reliable.

Silver
Dec Contract SI; (NYSEARCA:SLV)
Like gold, Wednesday’s narrow intraday ranging offered no new information, other than to confirm the rally’s momentum is not reliable.

30-year Treasury
Dec Contract US; (NYSEARCA:TLT)
Overnight strength up to 150-06 was erased before Wednesday’s open to range narrowly intraday. That would have sufficed for the false break we have been monitoring, but the non-reaction disqualifies it. Still awaiting a fresh high to be rejected, or an open under 148-10, to reverse momentum down.

Crude Oil
Nov Contract CL; (NYSEARCA:USO)
Two-three days spent ranging in and around 91.20-93.00 did contain the corrective bounce from testing the drop’s 89.75 target. The 87.00 target remained in-play, as Wednesday’s gap down that extended to fresh lows at 88.00 has confirmed.

Natural Gas
Nov Contract NG; (NYSEARCA:UNG), (NYSEARCA:UNL)
The 3.58 target was denied in favor of opening $.01 under the 3.45 pullback limit and extending down another dime. Back above 3.45 Thursday would reinstate the rally’s momentum.

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.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.