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Crude Oil Is Starting to Look Attractive


It should be obvious by Thursday's close that crude oil is attracting gold's action.

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: I noted yesterday that gold's $35 surge reaction to Bernanke's first day of Humphrey-Hawkins testimony was probably an isolated incident. Wednesday's reversal confirmed that, already meeting its objective. Now gold should range choppily as it absorbs the volatility. So I expect it to be obvious by Thursday's close that crude oil is attracting gold's action.

Dollar Basket
Wednesday's gap down only tested lower prior highs at 81.55, whose break would target a temporary dip to 81.25 before retesting the 82.05 resistance.

Mar Contract EC; (NYSEARCA:FXE)
Tuesday's ranging persisted through Wednesday, and narrowed. Back above 1.3140-1.3185 would target 1.3300, but only as a corrective bounce before resuming the decline.

Apr Contract GC; (NYSEARCA:GLD)
Wednesday's drop confirmed that Tuesday's reaction to Bernanke was an isolated incident. Having held 1618.00 resistance, the reaction probed under its 1595.50-1601.00 objective down to 1594.00. A bounce has room up to 1610.00, and a further dip has room down to 1584.00, without either one signaling trending underway.

Mar Contract SI; (NYSEARCA:SLV)
Wednesday's gap down extended to test 28.85, natural support where Monday's open had gapped up. The 29.85 objective remains in-play, preferably to be tested by the weekend if valid.

30-year Treasury
Mar Contract US; (NYSEARCA:TLT)
Not gapping down Wednesday back into 145-03/145-06 to begin a new downleg, the pattern followed its likelier path of ranging sideways to retest 146-06 resistance. Its reaction down filled the gap back to Tuesday's 145-16 close.

Crude Oil
Apr Contract CL; (NYSEARCA:USO)
Still ranging narrowly around 93.00, but starting to behave impatiently. The first trending attempt beyond either end of the 92.00-94.00 is likely to be false, and rejected more substantially in the opposite direction.

Natural Gas
No pullback from Tuesday's 3.42 close down to 3.36 intervened before Wednesday's open gapped up to 3.47 and extended higher intraday to 3.55. The lack of a pullback might be why the entire rally was retraced back down to 3.42. Now there is big resistance at 3.47, and an attraction outstanding back down to 3.30-3.33.

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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