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Daily Commodity Spot: Is Tuesday's Euro Rally a One-Day Wonder?


A breakdown of the five most active commodity futures from today.

I maintain opinions for various futures markets. 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: Yesterday's euro drop either had "opened the floodgates to a new downleg, or else Tuesday will reject Monday's weakness with a vengeance" (see yesterday's Daily Commodity Spot). In fact, Tuesday's open gapped up sharply above Monday's high, then extended more sharply above Friday's prior high. But if vengeance is a dish best served cold, then Tuesday's rally may have have been a one-day wonder. A second consecutive higher close Wednesday would qualify as a rally.

Dollar Basket March Contract (DX, ETF: (UUP)) -- Tuesday's steep drop retraced all the way back down to last Tuesday morning's low, which had launched a steep surge into that afternoon. This underperformed the euro, which retraced only the move from last Tuesday afternoon. Closing under 80.15 would extend the decline targeting 79.25. While a bounce has room up to 80.70 before assuming new highs are in-play, just rallying out of Tuesday's pattern would suggest the week-long decline had ended.

Gold February Contract (GC, ETF: (GLD)) -- The bounce had potential for extending to one more higher high at 1620.00, which was retested Tuesday while RSIs diverged negatively. Closing back under 1610.50 would target 1596.00, possibly as a new down leg targeting 1575.50 and lower.

Silver March Contract (SI, ETF: (SLV)) -- Initial weakness Tuesday would have trended down, but Tuesday's open gapped up to avoid a decline. The gap back to Friday's close was filled, and held. And the entire session was spent in positive territory. Gapping up, testing prior highs, exclusively positive… that's a lot of optimism, except for actually closing above a prior high. So, Tuesday's pattern was "ineffectual optimism," and a break under its 29.26 low would trigger a down leg targeting new lows.

30-Year Treasury March Contract (US, ETF: (TLT)) -- No longer being needed as a flight-to-safety, Tuesday's open gapped down 11 ticks. The 145-22 sell signal triggered immediately, and the balance of the session slid to 144-00. More than just a pullback, a trend change is triggered by closing under 144-12. But that is contingent upon a second consecutive lower close, especially considering how much selling pressure was expended Tuesday.

Crude Oil March Contract (CL, ETF: (USO)) 95.25's recovery overnight launched a surge to open Tuesday testing 97.00. The balance of the session firmed flat-to-higher. A second consecutive higher close above 98.00 would confirm a bigger up leg underway targeting 103.00. Reacting down from probing 98.00 intraday would instead trigger a pullback to 94.75, and probably a steep one.

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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