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Crude Oil Poised at Support, Preparing to Strike

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Our expert identifies targets and turning points for several commodities.

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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: It's working already! Crude oil dropped nearly $3 from yesterday's high. This was only one day after the announcement of a crackdown on its speculators. One day after having gapped up ahead of the crackdown threat. But one day does not a make a trend. Especially when that one day holds a test of critical support, despite beginning with such forcible selling pressure.

Dollar Basket
Jun Contract (DX, ETF: (UUP), (UDN)
The rally was free to resume, and Wednesday's open did gap up sharply to test 80.00. But the gap back down to Tuesday's 79.62 close was soon filled, and the balance of the session ranged just above it. While the rally could still resume, Wednesday's false start suggests at least a little more intraday weakness coming first.

Eurodollar
Jun Contract EC; (FXE)
Despite Tuesday's hesitation suggesting one more fresh high was likely to test 1.3200, Wednesday's open gapped down to 1.3100 and through support. Closing any lower would signal a new downleg underway, but the gap back to Tuesday's close was filled. There remains potential to test 1.3200.

Gold
Jun Contract GC; (GLD)
Tuesday's recovery from its deep 1635.00 intraday lows was not necessarily bearish. And it wasn't bullish enough to offset being a second consecutive lower close under 1657.00. But it did earn enough respect that gapping open Wednesday above 1661.00 would have still been bullish. Nevertheless, Wednesday's open gapped down, testing and retesting 1640.00, suggesting a new downleg was underway.

Silver
May Contract SI; (SLV)
Ranging Wednesday between 31.45-31.75 continued to prevent any buy or sell signal from being identified.

30-Year Treasury
Jun Contract US; (TLT)
Tuesday's session-long narrow consolidation at 141-06 undermined its relevance as a sell signal. And although not required, Wednesday's highs filled the gap back up to Monday's 141-27 close. Now closing under 141-06 would once again be credible for triggering a sell signal targeting 139-08. There is otherwise no buy signal active.

Crude Oil
May Contract CL; (USO)
One day after testing the 104.70 bounce target up to 105.20, the gap back down to Monday's 102.95 close was filled. The 102.25 support was tested. But the 102.25 support held. Now just closing above 104.70 would target 107.75 and potentially 111.75. Closing under 102.25 would still target 98.85.

Natural Gas
May Contract NG; (UNG)
Tuesday's 1.94 new intraday lows were "ineffectual pessimism" for only testing Friday's 1.96 prior lows. But Wednesday's bounce to 1.99 was retraced entirely back down to 1.94, so no bottom has yet formed.


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.
No positions in stocks mentioned.
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