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It's Time to Put Natural Gas Bulls to the Test


Natural gas has had a very optimistic week. Plus: a look at gold, the euro, crude oil, and more.

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: Natural gas has had a very optimistic week. A lot of buying was expended, just to test resistance. That's not necessarily bearish. In fact, I'll be very bullish if a reaction down Thursday were absorbed.

Dollar Basket
Wednesday's shallow ranging around 79.85 maintains the 80.50 objective.

Mar Contract EC; (NYSEARCA:FXE)
The pullback's 1.3260 pullback objective was attacked, triggering a reaction back into positive territory above 1.3300. First probing the pullback objective, or at least not being so quick to bounce, would launch a more reliable rally. So, I am suspicious of whether the pullback has actually yet ended.

Feb Contract GC; (NYSEARCA:GLD)
Wednesday's gap down held test of 1675.00 instead of extending below it. The gap was filled intraday. Neutralizing its attraction above has allowed an extra day for sellers to retake control. Almost any further delay or higher close would all but require extending up to 1720.00 before next threatening to retest recent lows at 1637.40.

Mar Contract SI; (NYSEARCA:SLV)
Wednesday's gap down was retraced entirely. Filling the gap back to Tuesday's close has neutralized its attraction above. Probing higher highs - especially if that were to test 31.65 - and closing negative would now trigger a reversal down.

30-Year Treasury
Mar Contract US; (NYSEARCA:TLT)
Wednesday's gap up probed fresh highs without extending higher intraday, all for the third consecutive. Either the bounce is ending, or it is about to accelerate sharply higher. The latter, bullish scenario would be likely Thursday from any initial strength, if not from any delay in reversing down. Jobless claims are due pre-open.

Crude Oil
Feb Contract CL; (NYSEARCA:USO)
Resistance at 94.20 was chipped away further Wednesday. The ongoing choppy range already lost its timing in last Thursday's inside day, but a failed break higher would still target 91.25, while maintaining a breakout would target 99.00.

Natural Gas
Having rallied uninterrupted to fully test 3.37-3.44 resistance without a dipping to refuel along the way, 3.44 resistance held for the second consecutive day. Thursday's EIA report should shake the pattern loose.

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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