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Did Thursday's Dip Kill Crude Oil's Recent Up Leg?


No, but almost -- the next breath the chart takes needs to lift up, and quickly.

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: Currencies fulfilled an interesting setup we've been tracking recently. Gold reacted well to its support/resistance. Natural gas responded very well to a favorable setup at the prior close. Now let's see whether crude oil will honor its pullback limit.

Dollar Basket
Thursday's gap up fulfilled the setup we've been tracking by then reversing back down under Tuesday's prior high. Falling into negative territory wasn't required. The assumption now is that the rally will correct.

Jun Contract EC; (NYSEARCA:FXE)
Gapping down Thursday reacted up almost instantly back to Tuesday's high, as was suggested by the setup we've been tracking. There's no requirement to extend higher immediately, but some sort of a corrective phase should now begin before resuming the decline. So a fresh low on Friday would be less likely to extend down and likelier to reverse positive before the close.

Jun Contract GC; (NYSEARCA:GLD)
Thursday's open did what Wednesday's close did not, which is break under the 1301.70-1303.00 pullback limit, invalidating Wednesday's rally. Its drop to 1291.00 was retraced entirely to fill the gap back up to 1303.00. Reversing down again to 1293.00 hasn't reversed momentum back down, but that's the likely resolution, signaled back under 1289.00 and confirmed under 1285.00.

May Contract SI; (NYSEARCA:SLV)
Despite holding 19.75 support Wednesday, Thursday's open gapped down back under the "lower prior high" to test the 19.45 support that had launched Wednesday's gap up to 20.00. Back above 19.75 would launch a new up leg, but there's otherwise no active signal.

30-year Treasury
Jun Contract US; (NYSEARCA:TLT)
Extending higher Thursday to 138-04 fulfilled the highest calculable resistance above last week's highs. That was probably encouraged by a flight to safety while stocks fell through the morning. The balance of the session reacted down to 137-18, with potential for extending deeper down to 136-08 regardless of the ultimate resolution.

Crude Oil
May Contract CL; (NYSEARCA:USO)
Thursday's test of the 101.40 pullback limit held, keeping alive the rally targeting a new high above the 104.00 prior high.

Natural Gas
The constructive setup going into Thursday morning's EIA report reacted up sharply on the news. There being no unfinished business below, and the past two sessions forming a key-reversal setup, closing above 4.41 suggests that the decline has ended. Closing above Thursday's high on Friday would confirm.

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.
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