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Daily Commodity Spot: What Happens to the Market When the Influence of Options Expiration Wears Off?


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: The stock market's narrow range Friday stood in stark contrast to several bigger moves among futures markets. Bonds extended their downleg, while crude oil may have begun one. What happens Monday when expiration's influence wears off?
1. Dollar Basket
March Contract DX, ETF: (UUP, UDN)
Thursday's test of 80.35 had to hold as support to avoid a much bigger downleg. It did. But Friday's gap up settled back to Thursday's close and only ranged sideways throughout the day. Initial strength Monday would be credible for extending higher, but fresh lows would suggest the decline was resuming.

2. Eurodollar
March Contract EC, ETF: (FXE)
Fresh highs overnight disappeared by Friday's open. The balance of the session ranged sideways around unchanged. Not reacting down hard intraday suggests that impatient buyers were corrected, and any initial strength Monday would be credible for extending higher.

3. Gold
February Contract GC, ETF: (GLD)
Friday morning's dip to 1647.00 support was recovered intraday to probe above 1665.00. Now the pattern should hold 1660.00 to maintain its potential for extending up to 1684.00.

4. Silver
March Contract SI, ETF: (SLV)
The outperformance versus gold was on clear display Friday as gold recovered intraday back to prior highs, while silver extended sharply higher to fresh highs. The rally has potential for extending up to 33.55 so long as 31.05 were to hold as support.

5. 30-Year Treasury
March Contract US, ETF: (TLT)
The reaction down from 145-10's resistance persisted into the weekend. Extending lower Friday to probe under 142-05 further confirms that a much more sizable decline is underway, targeting 140-00, so long as 142-12 were to hold as resistance.

6. Crude Oil
March Contract CL, ETF: (USO)
Gapping down Friday to 99.75 and through the 99.40 sell signal extended intraday down to 98.00. That was a prior low, so it offered natural support. Closing under it Monday would confirm a new downleg underway, targeting 95.45 and 91.45.

7. Natural Gas
March Contract NG, ETF: (UNG)
Holding its ground Friday was no small victory compared to the relentless extended decline. But it did not at all fulfill the (up)crash(down) setup's expectation for an unusually steep session. Regardless, this market tends to repeat Friday's behavior on Monday morning, so any strength should be credible for extending higher.

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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