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Daily Commodity Spot: This Morning's Euro Action Was Not Unexpected


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 is not currencies. Sure, the morning's action was unusually extreme, albeit long-awaited. But it was brief, and not unexpected. Meanwhile, Natural Gas has finally neutralized an important attraction below, allowing me to calculate a buy signal.

1. Dollar Basket
March Contract DX, ETF: (UUP)
After five days of ranging narrowly, Wednesday's surge compensated for the delay. With a vengeance. A surge above the 80.40 signal almost immediately met the 80.85 target. Its test was not rejected, and a second consecutive higher close Thursday would confirm the probe above 81.25 is underway.

2. Eurodollar
March Contract EC, ETF: (FXE)
Wednesday's drop extended back to lower-end of the past week's trading range. And then through it. Outstanding gaps below were filled, and probed. This leg's next objective is to test 1.2870, potentially down to 1.2650, so long as 1.2975 is not recovered.

3. Gold
Febuary Contract GC, ETF: (GLD)
Closing under 1598.00 Tuesday essentially renewed Thursday's sell signal that triggered under 1610.50, keeping in-play 1575.50. Its test did not consolidate for long before plunging further to 1557.60, then later to test 1551.00. Bounces should now hold any test of 1568.00 to maintain the decline's momentum, next targeting 1520.00. Closing above 1575.50 would signal instead that the bottom was in, and an aggressive upleg was underway.

4. Silver
March Contract SI, ETF: (SLV)
Wednesday's plunge to the 27.90 target extended down to test 26.90. The decline's momentum remains intact and next targeting 26.30 so long as 27.40 holds any test as resistance. A break under 26.30 would be very bearish, but also very difficult.

5. 30-Year Treasury
March Contract US, ETF: (TLT)
Testing the 143-04 bounce limit Wednesday already expended a great deal of energy from Tuesday's 142-13 close. Much more energy was expending probing it intraday up to 144-16. Although the bounce far exceeded expectations, it did peak (so far) upon retracing 61.8% of the drop from 146-08. The bounce could extend up to 145-06 before considering it to be more durable than only a bounce. Otherwise, back under 143-18 and 143-12 would resume the decline.

6. Crude Oil
March Contract CL, ETF: (USO)
Tuesday's 101.88 high was never probed Wednesday before price tumbled down to 99.25. The 99.40 pullback limit ultimately held through the close to maintain the rally's momentum. But closing under 99.00 Thursday would undermine the rally, and start to reverse momentum down.

7. Natural Gas
March Contract NG, ETF: (UNG)
Dec 19's 3.15 opening gap was finally retested Wednesday. Its test included a probe of fresh lows for good measure. There is now no unfinished business below. Its first reaction up to 3.21 has already retraced back under prior lows. Closing Thursday back above 3.21 would be credible for sealing a bottom. The weekly EIA report is scheduled, and pessimism ahead of it would also be optimal.

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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