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Crude Oil's Retracements Suggest Range Is Ready to Resolve


Take a look at the intraday action in commodities.

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 consecutive 61.8% retracements suggest the range is ready to resolve, in one direction or the other. I would hope that means down, because upside breakouts like the one indicated typically begin with some geopolitical event.

Dollar Basket
Monday's narrow inside day consolidated Thursday's and Friday's decline from Tuesday's and Wednesday's test of 81.00-81.05 resistance. At least one lower low to 79.75 is likely before any recovery could be considered credible.

Dec Contract EC; (NYSEARCA:FXE)
Monday's narrow inside day consolidated last week's surge up to 1.2995. Resuming the rally would have potential up to 1.3050.

Dec Contract GC; (NYSEARCA:GLD)
Friday's $20 surge to fresh highs above 1735.00 was consolidated Monday. The rally should also visit 1763.00, where the pattern will decide between reversing back down, or else extending to new highs at 1802.50 or higher.

Dec Contract SI; (NYSEARCA:SLV)
By consolidating Friday's rally Monday around 34.00 instead of already rejecting it, the rally is likely also to test 34.50. Closing any higher would target 36.00 and higher.

30-year Treasury
Dec Contract US; (NYSEARCA:TLT)
Sunday night's rally through the 150-14 bounce limit was never touched intraday -- almost, to within 2 ticks, when the 151-05 high was retraced into the close. Extending down immediately would be credible for resuming the decline.

Crude Oil
Jan Contract CL; (NYSEARCA:USO)
Friday's bounce back to 88.55 retraced 61.8% of the drop from last Monday's 89.80 high. This Monday's drop back to 87.25 retraced 61.8% of Friday's bounce. This pattern should now be ready to resolve. Under 86.70 would signal a new downleg underway, but above 88.50 would target new highs.

Natural Gas
Last Tuesday and Wednesday's buy signal and confirmation have yet to produce a higher close than 3.90. That's still likely, despite Monday's open gapped back down to 3.75 where last Tuesday's session began. But now a close back above 3.82 is needed to resume the rally.

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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