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Daily Commodity Spot: Is This the Euro's Chance for a Reversal?


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 the second time (in a week) the charm for the euro to reverse up? Last week's bounce probed resistance too aggressively for being so close to the lows. And a long-standing target was outstanding. Wednesday's probe of those resistance levels has a better chance to gain traction.

1. Eurodollar
March Contract EC, ETF: (FXE)
One more chance at a bottom… Tuesday's gap up ranged entirely in positive territory, and entirely within Friday's range. Buyers gained no traction for their efforts, so the only way to extend any higher would have been to gap up above Tuesday's high. Wednesday's open did gap up above Tuesday's high, and probed higher highs in the afternoon. In fact, Wednesday's close recovered both 1.2750 and 1.2825 resistance. A second consecutive higher close Thursday would confirm whether momentum has actually reversed up, which would be very bullish near-term.

2. Dollar Basket
March Contract DX, ETF: (UUP, UDN)
Wednesday's open gapped down to its lowest levels in two weeks, at 80.85, which had previously served as resistance to the rally. The afternoon's close under the morning's low does suggest that sellers are gaining traction. A second consecutive lower close under 80.55 would confirm that momentum has reversed down.

3. Gold
February Contract GC, ETF: (GLD)
The 1647.00 pullback limit was probed at Wednesday's open, but held its test. The afternoon rallied back into positive territory, attacking 1665.00 resistance. Just closing above 1659.50 should have been enough to signal the next upleg underway, targeting 1684.00.

4. Silver
March Contract SI, ETF: (SLV)
Birds of a feather can sink together, too… Recovering back to the range's highs Wednesday has allowed silver to momentarily outperform gold. This relationship requires that both extend up sharply without delay, or else tumble simultaneously. So, almost any initial strength Thursday would be credible for rallying throughout the day.

5. 30-Year Treasury
March Contract US, ETF: (TLT)
Live by "flight-to-safety," die by it, too… RSIs diverged negatively throughout overnight tests of the 145-10 resistance area. A fresh post-open high was rejected back down to and through Tuesday's 144-05 opening gap. It was still being tested at the close to avoid signaling momentum reversing back down to last week's lows. At least, for now.

6. Crude Oil
March Contract CL, ETF: (USO)
Tuesday's gap up did not really extend any higher intraday. True to form, Wednesday's gap up to a fresh high was retraced back into Tuesday's range. But Tuesday's range held the dip, so momentum has not yet reversed down, which would be signaled by closing under 99.40.

7. Natural Gas
March Contract NG, ETF: (UNG)
Since breaking to new lows under 3.00 two weeks ago, price has tumbled precipitously to new lows at . In fact, all but two of the last 10 sessions closed lower, and neither of the two non-consecutive gainers recovered a prior high. These conditions happen to form my "crash(up)" setup. Within one to two days, this market should print a session whose measurement exceeds any two to three cumulative days of the decline. A downday that extends the decline would likely flush out remaining sellers, while an upday would begin the process of forming a bottom.

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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