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Daily Commodity Spot: Crude Oil Hits Target Level


A breakdown of the day's seven most active commodity futures.

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: It took more saber-rattling to get there, but crude oil finally met its $103 target Tuesday. The pattern has become vulnerable to reversing down sharply… or to extending the rally to truly frightening levels.

1. Dollar Basket
March Contract; DX: (UUP), (UDN)
Bouncing off of 80.40 support Friday did not prevent gapping down to 80.20 Tuesday. The balance of the session extended down to the lowest levels in three weeks testing 79.85. There is no buy signal under 80.05, only the vulnerability to the slide extending down to 79.40, which can be avoided by immediately recovering back above 80.05.

2. Eurodollar
March Contract; EC (FXE)
Despite Thursday's intraday recovery not gaining traction above 1.2950, and despite reversing most of Friday's fresh highs from 1.3000, Tuesday's open gapped up to a fresh high and extended higher to 1.3085. That essentially retraces last Wednesday's capitulation sell-off, which is natural resistance. Its recovery would be bullish because it is more difficult and so less likely.

3. Gold
February Contract; GC (GLD)
Bouncing sharply to 1583.00 from last week's 1524.00 lows did not gain traction. Bouncing further Tuesday almost to 1609.00 came closer, nearly recovering the 1610.50 sell signal that had set the decline in motion. Closing under 1593.50 Wednesday would at least signal the bounce had ended, if not also reverse momentum down. But that may be the last opportunity for either.

4. Silver
March Contract; SI (SLV)
Tuesday's gap up above Friday's 28.46 high immediately overcame any likelihood for retesting last week's lows. The rally extended sharply higher to 29.43, where the last downleg originated, probably robbing the pattern of volatility for a couple of days.

5. 30-Year Treasury
March Contract; US (TLT)
Friday's probe above 144-18 did not prevent a reversal down, and probably made it more likely. Sell signals were raised to 144-09. Tuesday's big drop down to 143-01 proved that buyers had gained no traction. But a close Wednesday back under the original 143-04 bounce limit is still needed to prove that sellers are regaining traction.

6. Crude Oil
March Contract; CL (USO)
The 103.00 target was met Tuesday, and then retested while relative strength indices diverged negatively. But it was not rejected, not yet. The setup (technical deterioration at resistance) is not in itself a sell signal. It does, however, require the rally to extend higher uninterrupted to prevent a decline from gaining traction. And extending higher uninterrupted could suddenly challenge the $111 area.

7. Natural Gas
March Contract; NG (UNG)
Tuesday's fresh low at 2.96 was recovered to close in positive territory. That is not the signal for a bottom and recovery, which still requires closing above 3.09, but it's a start.

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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No positions in stocks mentioned.
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