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Crude Oil Won't Get Out of This Hole Too Easily


Friday's bounce didn't gain any traction for its effort.

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: Crude oil's bounce into the weekend didn't leave any unfinished business below, and faced two days of illiquidity, but buyers weren't very enthusiastic. They did neutralize an upside attraction, but gained no traction for the effort. The lows should be retested, whether to form a more durable bottom, or to extend the decline.

Dollar Basket
Fresh lows overnight disappeared before Friday's open, but the session only ranged sideways around unchanged. Probing above Friday's highs would target a test of 80.05-80.10 as resistance.

Dec Contract EC; (NYSEARCA:FXE)
The sequence suggested not confirming Thursday's fresh high close, and although higher highs were probed to test 1.3835 before Friday's open, the session only ranged sideways around Thursday's close. Almost any break under 1.3770 would be credible for launching a downleg.

Dec Contract GC; (NYSEARCA:GLD)
Friday's gap down recovered back above 1341.00 into positive territory to confirm the rally next targeting 1360-1362.00. A delay in extending higher should hold any test of Friday's 1339.40 opening gap as support before recovering to resume the rally, which now requires at least one more higher close.

Dec Contract SI; (NYSEARCA:SLV)
Gapping down Friday held a test of 22.50 to avoid signaling that momentum was reversing down. The gap back to Thursday's close should attract price higher to resume the rally next targeting 23.35.

30-Year Treasury
Dec Contract US; (NYSEARCA:TLT)
Narrow ranging still contained with the high session's range further reflects "ineffectual optimism" that undermines any attempt to resume the rally.

Crude Oil
Oct Contract CL; (NYSEARCA:USO)
Friday's shallow gains fulfilled expectations for bouncing further before resuming the decline. The 98.05 high even filled the gap back to Tuesday's close, neutralizing its attraction above that might otherwise inhibit a decline. Closing back under 97.35 would signal the decline had resumed.

Natural Gas
Despite gapping up and closing at a fresh high Friday, and despite Thursday's test of 3.55 support, it's tough taking buyers seriously when the decline created the requirement for at least one more fresh low close. But closing Monday above the 3.71-3.72 "higher prior lows" resistance would get every benefit of the doubt for extending higher. Otherwise, closing under 3.63 would signal the drop had resumed, targeting fresh lows.

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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