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Daily Commodity Spot: Was Monday's Wild Currency Action a Taste of Things to Come?


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 Currencies started the week with a warning shot across the bow. Probably a taste of things to come, but is there room for one new trend extreme first?

Dollar Basket
Mar Contract DX; (UUP), (UDN)
Monday's gap up held the 79.55 resistance from last week's prior highs. The open reacted back down to fill the gap back to Friday's 79.10 close. Friday's close held as support, leaving no unfinished business below to attract price down. Now any close above Monday's 79.65 high would trigger a new upleg targeting 81.50.

Mar Contract EC; (FXE)
Monday's gap down to 1.3045 held its test of last week's prior low. The reaction up filled the gap back to Friday's 1.3145 close. There is no unfinished business above to attract price higher, not without closing above the 1.3200 area, which would put into play 1.3333.

Apr Contract GC; (GLD)
An overnight bounce to the 1740.00 objective launched another drop Monday to fresh lows down to 1714.00. The close held 1720.00-1722.00, which had been support during the rally targeting 1748.00. This probably robbed buyers of their traction, so that 1748.00 can be retested before a bigger downleg can begin.

Mar Contract SI; (SLV)
Monday's gap down to prior lows at 33.00 was retraced entirely back into positive territory at 33.87. The reaction up suggests that a downleg is not quite yet ready to begin. But the gap down did create new business below - to retest its open, - which will inhibit any recovery effort and probably cause its failure.

30-Year Treasury
Mar Contract US; (TLT)
After Friday's tumble, a corrective bounce was likely to test 143-04 up to 143-10 or 143-16. Monday's gap up to 143-04 was retraced to fill the open's gap, and then recovered to resume the corrective bounce. The 143-17 session high reacted down to end the session testing 143-10. The decline is free to resume, having completed the corrective bounce and holding its limit, although closing under 143-04 would have signaled it already.

Crude Oil
Mar Contract CL; (USO)
Friday's corrective bounce reacted down immediately Monday, even if the reaction down did not necessarily resume the decline. But now, having corrected up, and then having reacted down to the correction, the appropriate behavior for resuming the decline would be to accelerate under 96.35 to new relative lows.

Natural Gas
Mar Contract NG; (UNG)
While Friday's action helped to form a more durable bottom, it did not trigger a rally and it did not require Monday to trigger a rally. In fact, Monday's action repeated much of the same pattern and continued to form a more durable bottom. Now any delay in rallying would start to undermine the recovery potential.

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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