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Has Crude Oil Bottomed?


Tuesday morning will prove it if it has.

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: Immediately rejecting last Wednesday's plunge hasn't yet been converted into a bottom for crude oil. This is an interesting pattern to monitor not only for the consolidation's resolution, but also for the implications its resolution presumably would have on other markets.

Dollar Basket
Monday's gap up began the more substantial reversal up that has been forming. A second consecutive higher close Tuesday above 81.00 would confirm, next targeting 81.60 and 81.90.

Dec Contract EC; (NYSEARCA:FXE)
Gapping down Monday from last week's resistance test suggests a new downleg is forming. Confirmed by a second consecutive lower close Tuesday, preferably under 1.3495, would next target 1.3333.

Dec Contract GC; (NYSEARCA:GLD)
The outstanding retest of 1228.10 was fulfilled Monday morning, while Friday's rally to 1254.50 was being rejected by fresh lows down to 1225.00. Closing back under 1230.50 two consecutive sessions would mean the recent ranging was resolving down, and not even launching a corrective bounce.

Dec Contract SI; (NYSEARCA:SLV)
Monday's gap down to last week's 19.70 lows extended down intraday to 19.26. Not immediately rejecting Monday's drop Tuesday would essentially confirm a the consolidation is resolving down, next targeting 18.90.

30-Year Treasury
Dec Contract US; (NYSEARCA:TLT)
Third time was a charm Monday as the bounce up to resistance resolved down to within four ticks of fresh lows targeting 129-16. Closing any lower -- which is increasingly likely, considering the struggle not to -- would next target 128-10.

Crude Oil
Oct Contract CL; (NYSEARCA:USO)
Friday's gap up wasn't extended higher Monday, but the day was largely spent testing Friday's 94.00 area highs. Closing above 94.60 would signal momentum is reversing up, targeting 97.15. Pullbacks must meanwhile hold 93.00 as support.

Natural Gas
Friday's probe of fresh highs was not rejected Monday, helping to confirm the rally is next targeting 4.25. The confirmation wasn't optimal, in that the trend didn't extend higher, so back under 3.88 and 3.82 could still launch a deeper retracement instead.

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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