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Crude Oil Futures Rally Despite Attack on Speculators


While the president was describing his plan, futures were about $1.50 higher to levels not seen in two weeks. Plus the indications for other 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 laughed off Tuesday's announced efforts to reign in speculators. While the president was describing his plan, futures were about $1.50 higher to levels not seen in two weeks. It's as if speculators aren't really to blame for higher oil. It's as if the market doesn't think Congress will pass any legislation supporting the President's plan. It's as if other forces may be to blame... Naaaah.

Dollar Basket
Jun Contract DX; (UUP), (UDN)
Choppy ranging Tuesday around Monday's lows did not impact the pattern. Nor did it extend the 61.8% pullback from Thursday's low, still allowing for the rally to resume.

Jun Contract EC; (FXE)
Tuesday ranged narrowly around the 1.3145 resistance that contained Monday's rally. Not yet rejecting its test suggests that a higher resistance will be tested next, which would fill the gap back to 1.3200 - but probably not close above 1.3180. Closing under 1.3100 should instead resumed the decline.

Jun Contract GC; (GLD)
Gapping up Tuesday above 1661.00 would have resumed the rally. But 1657.00 held the gap up, launching an intraday dip to 1635.00. A second consecutive close under 1657.00 has confirmed that last week's bounce had ended. But the afternoon's $23 recovery to test 1658.00 leaves the door open to resuming the rally anyway, by gapping open Wednesday above 1661.00.

May Contract SI; (SLV)
Monday's test of 31.45 launched another bounce Tuesday. Despite its gap up extending to 31.90, the gap back to Monday's close was filled. Its reaction recovered back to session highs. But ultimately 31.75 held as resistance to prevent triggering a signal either way.

30-Year Treasury
Jun Contract US; (TLT)
Since Monday's close was testing last week's 141-27 high, Tuesday's gap down leaves no unfinished business above. Still, the sell signal is 141-06, and Tuesday ranged narrowly around it instead of triggering or rejecting it. Now a close under 104-22/104-29 would be needed to confirm momentum had reversed down.

Crude Oil
May Contract CL; (USO)
The long-standing 104.70 target was met by Tuesday's gap up, after Friday and Monday's pullbacks held tests of 102.25 support. Closing above 105.90 would signal a new upleg underway, next targeting 107.75 and 111.75.

Natural Gas
May Contract NG; (UNG)
Tuesday's gap down under 2.00 rejected Monday's bounce up to 2.02. The morning extended down to new lows under 1.95. The low was retested into the close. But more importantly, the balance of the session ranged around Friday's 1.96 lows. Sellers did not gain traction for their efforts. New lows are not a buy signal, but Tuesday's pessimism could serve as a bottom.

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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