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Is a Peak Coming for Natural Gas?


A breakdown of yesterday'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: Natural Gas extended its bounce yesterday, suggesting a peak coming on its third day, - Wednesday.

Dollar Basket
Mar Contract DX, ETF: (UUP, UDN)
Tuesday's gap up peaked at 80.35 resistance, which had been very relevant support when tested last week. Its entire post-open gain was retraced, leaving outstanding the gap back to Monday's close. Even if the lower were in, a durable bottom has not formed.

Mar Contract EC, ETF: (FXE)
Monday's test of the 1.3050 target had room to react down to 1.2955. Tuesday's low was 1.2956. Apparently that was close enough since yesterday's morning test launched a bounce back up to 1.3032. The rally is free to extend higher without delay, although that is not required.

Feb Contract GC, ETF: (GLD)
Gapping down Tuesday after missing the 1684.00 target by only $2 Monday suggests the target will be met.

Mar Contract SI, ETF: (SLV)
Tuesday's open avoided gapping down and the morning avoided any weakness. This helps Monday's range avoid becoming a bearish Island Reversal. An immediate drop is still possible, but likely to recover.

30-year Treasury
Mar Contract US, ETF: (TLT)
Firming only slightly at Tuesday's open made any significant follow-through unlikely at this stage of the pattern. But the balance of the session didn't extend down. So, now a corrective bounce with potential to 142-00 would be targeted above 141-14.

Crude Oil
Mar Contract CL, ETF: (USO)
Despite gapping down and essentially trading the entire session in negative territory, Tuesday's session did not invalidate Monday's gap up.A break under 98.25 is needed to resume the decline.

Natural Gas
Mar Contract NG, ETF: (UNG)
The second day of the (up)crash(down) setup extended higher again, all but ensuring another fresh high Wednesday - and for that fresh high to be reversed and close in negative territory.

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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