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Goodbye, Crude Oil Bounce


Cease fire rumors coming from Gaza Tuesday helped 89.60 resistance hold Monday's test.

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: Monday's crude oil rally could have extended slightly higher, but it was not expected to last, regardless. Tuesday's reaction down showed the risk of holding a speculative long based on a story when it has already tested resistance.

Dollar Basket
Tuesday firmed back up to 81.00-81.05 resistance, which had acted as support to produce the prior high. Its recovery would be bullish, but the decline is otherwise free to resume.

Dec Contract EC; (NYSEARCA:FXE)
Not immediately rejecting Monday's surge on Tuesday does not necessarily validate it. A second consecutive higher close would have been bullish. Extending higher Wednesday would require gapping up.

Dec Contract GC; (NYSEARCA:GLD)
No second consecutive higher came Tuesday that would have confirmed momentum reversing up. Back under 1714.50 would still signal a new downleg underway.

Dec Contract SI; (NYSEARCA:SLV)
The test of 33.00 resistance endured through Tuesday. At least no probe of a higher high was rejected, and the pullback held "lower prior highs" as support, so the rally is free to resume.

30-Year Treasury
Dec Contract US; (NYSEARCA:TLT)
Monday's consolidation under 151-18 resolved down under 151-04 to confirm momentum had reversed down. The drop extended to 150-12. Any lower close would target 149-26.

Crude Oil
Dec Contract CL; (NYSEARCA:USO)
Cease fire rumors coming from Gaza Tuesday helped 89.60 resistance hold Monday's test. The reaction down to 86.20 fell back under the 87.20 prior highs, which held as resistance. Extending under 85.75 might be enough to produce new lows targeting 81.85-82.50.

Natural Gas
Having spent enough time through Monday absorbing Thursday's wide ranging session, a breakout above 3.80 was all but required. It was probed intraday Tuesday up to 3.84, and a second consecutive higher close Wednesday would confirm a new rally leg underway.

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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