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Daily Commodity Spot: Tuesday New Currencies Extremes Are Trend's Last Gasps


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 That answers that, sort of… Currencies gapped open to key levels Monday morning, threatening to reverse recent trending. The opens were retraced entirely intraday. Tuesday's action extended the retracements, back through their origins from Friday's close. Monday's open was a "warning shot across the bow" that recent trends will soon reverse, regardless of one more trend extreme being in-play.

Dollar Basket
March Contract DX; (UUP), (UDN)
Monday's 79.10 low bottomed upon filling the gap back to Friday's close. That didn't prevent Tuesday's session from extending lower, to new relative lows at 78.58. But last week's 78.75 prior low was still being tested at the close, so sellers gained no traction for the extra effort. If there were another new low, its origin would require a complete recovery.

March Contract EC; (FXE)
Tuesday's probe of higher highs up to 1.3272 closed above 1.3200 to signal a fresh high in-play at 1.3333. If there is no second consecutive higher confirming close Wednesday, then a quick reversal back down to Monday's ~1.3030 low would become likely.

April Contract GC; (GLD)
Despite retesting Monday's 1714.00 low down to 1712.60, Tuesday's open held the critical 1720.00-1720.00 support to launch a rally to the 1748.00 objective. It was tested already intraday, up to 1752.60. A second consecutive higher close Wednesday would put into play 1778.00. There is otherwise no unfinished business above, and closing back under 1740.00 would trigger a new downleg.

March Contract SI; (SLV)
Tuesday's gap down soon recovered from 33.15 back through Monday's 33.77 close, to retest last week's 33.37 prior highs. Its outperformance vs. gold persists.

30-year Treasury
March Contract US; (TLT)
Having completed its corrective bounce to 143-16 Monday by touching 143-17, the pattern became vulnerable to resuming the decline to fresh lows next targeting 141.28. While I did not expect the corrective bounce to resolve in only one day, which it did, I still did not expect the drop to resume the next day. Which it did, by touching 141-27. Regardless, closing under 142-05 would signal the downleg has resumed, next targeting 140-00. Closing above 142-12 would trigger a retest of 142-24.

Crude Oil
March Contract CL; (USO)
Monday's rejection of Friday's corrective bounce left much to be desired at its 96.22 close. That could have been provided by sufficient weakness Tuesday. Gapping down to test 96.00 started things right, but that was quickly reversed up to fresh highs above 99.00. Any higher close would target 100.50, whose recovery would target 103.00 and 111.00. But closing back under 97.80 would resume the decline.

Natural Gas
March Contract NG; (UNG)
Early strength touched the 2.61 buy signal, but reversed down sharply instead of surging through it. That's the very definition of an "inflection point." The inflection was already productive, probing back under Monday's low to 2.45. That allows a rally to be credible, but it must begin by recovering 2.61.
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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