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Daily Commodity Spot: Are Crude Oil and Natural Gas Reversing Roles?


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 Are Crude Oil and Natural Gas reversing their roles? While Crude Oil is now breaking under support to new relative lows, Natural Gas is bouncing off of support and perhaps also launching a new upleg.

Dollar Basket
Mar Contract DX; (UUP), (UDN)
Fluctuating narrowly around unchanged Thursday does not add to any pattern that may be forming. But it does reflect pessimism - which is potentially bullish from a contrarian perspective - for not being attracted higher to fill the gap back up to Tuesday's 79.40 close. Any initial strength Friday would be credible for extending higher, and for launching a new upleg.

Mar Contract EC; (FXE)
Thursday's gap down nearly filled the gap back to Tuesday's 1.3092 close. The optimism that prevented it could be bearish from a contrarian perspective. Absent a close above 1.3215 to reinstate momentum for the 1.3333 target, closing under 1.3090 would suggest at least a corrective drop is underway.

Apr Contract GC; (GLD)
Shallow bounces weren't gaining traction. Neither was neutralizing unfinished business above, which kept reacting back down under prior highs. But sellers never gained traction either by reacting back down under prior lows. Buyers exploited that Thursday by firming to fresh highs at almost 1764.00. Now a pullback has room down to 1745.00 area without yet signaling momentum has reversed down. There is otherwise no active buy signal.

Mar Contract SI; (SLV)
Thursday morning's action eventually trended up to probe fresh highs up to 34.35. A reaction down back under prior highs was recovered back above them to test 34.20. While this action is more vulnerable to extending higher, there is no active buy signal.

30-Year Treasury
Mar Contract US; (TLT)
Wednesday's "inside day" did not produce any meaningful reaction Thursday. The session fluctuated relatively narrowly around unchanged. Recovering 145-05 would still trigger a probe of fresh highs targeting 145-28 and potentially 146-22.

Crude Oil
Mar Contract CL; (USO)
Gapping down to fresh lows and extended down throughout the day helped Thursday's price action confirm Wednesday's close under prior lows. Bounces should now hold tests of 96.70 to maintain the break's momentum. The bounce limit may be probed to fill the gap back to Wednesday's 97.60 close, but it must be rejected.

Natural Gas
Mar Contract NG; (UNG)
Without bothering to probe under two week-old prior lows, Thursday's action absorbed the negative knee-jerk reaction to EIA that touched 2.34, then rallied back up to 2.57. Closing above 2.61 Friday would confirm a bottom has formed, and that momentum is reversing up, with potential on this leg up to 3.03.

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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