Absorbing Its EIA Report Should Trigger a Rally in Natural Gas

By Rod David  OCT 17, 2012 3:35 PM

Natural gas walked right up to its tipping point Wednesday, but couldn't push the bounce any higher.

 


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: Natural gas walked right up to its tipping point Wednesday, but couldn’t push the bounce any higher. Will it have better luck Thursday with the EIA report?

Dollar Basket
Dec Contract DX; (NYSEARCA:UUP), (NYSEARCA:UDN)
Closing under Tuesday’s 79.40 low would have targeted 79.00, which was tested almost immediately Wednesday morning. Any lower close would target a retest of prior lows at 78.65, and then new lows at 78.30.

Eurodollar
Dec Contract EC; (NYSEARCA:FXE)
Wednesday’s gap up followed Tuesday’s, being a second consecutive higher close that confirms 1.3200 and potentially 1.3425 are in-play. Being within a prior range, the rally would be invalidated by closing back under 1.3100 support.

Gold
Dec Contract GC; (NYSEARCA:GLD)
Dipping down to 1744.00 intraday Wednesday was recovered back up to Tuesday’s 1754.00 highs. Buyers gained no new traction in preventing sellers from signaling a momentum reversal, so the next dip should extend down.

Silver
Dec Contract SI; (NYSEARCA:SLV)
Tuesday’s bounce back to the relevant 33.00 level was exceeded Wednesday to fresh highs at 33.30. Back under 33.00 would trigger a retest of this week’s 32.57 low.

30-year Treasury
Dec Contract US; (NYSEARCA:TLT)
The drop extended much further to 146-21. That is deep enough to prove the prior rally was only a corrective bounce. That allows another corrective bounce, only shallower, triggered above 147-04 and targeting 148-00.

Crude Oil
Nov Contract CL; (NYSEARCA:USO)
Without quickly exceeding 93.00 at Wednesday’s open, attacking it to within only $.15 was retraced entirely back down into negative territory. Now closing under 91.50 and 91.20 would signal momentum reversing down.

Natural Gas
Nov Contract NG; (NYSEARCA:UNG), (NYSEARCA:UNL)
Closing above 3.48 would signal that momentum had reversed up, but it held as resistance Wednesday despite being pierced intraday by $.02. It was tested up to 3.50, whose recovery now would put into play 3.75.

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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