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Energy Sector Gets Another Boost

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Monday's market action resets commodity targets.

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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: Very interesting action continues in the energy sector. Crude oil swallowed another gap down that probed support, only to reverse into positive territory. Meanwhile, natural gas fulfilled its intraday objective to retest last week's high. Seems like a "put up, or shut up" moment for each.

Dollar Basket
Jun Contract DX; (UUP), (UDN)
Monday's gap up did not extend higher, but the entire session developed in positive territory. This is essentially "ineffectual optimism" that makes a retest of recent lows likely. No bounce would be very credible for gaining traction otherwise.

Eurodollar
Jun Contract EC; (FXE)
Monday's gap down and session-long ranging in negative territory nonetheless held 1.3220 "lower prior highs" as support. The gap back to Friday's 1.3260 close remains open, and likely to be filled. Both 1.3260 above and 1.3215 below should be tested before extending in either direction.

Gold
Jun Contract GC; (GLD)
Closing above 1661.00 again Friday confirmed a bigger bounce underway. That didn't prevent Monday's gap down from sliding through 1657.00 and extending down quickly to 1645.00. But Friday's signal did help to reverse Monday's steep drop back up into positive territory. Still targeting 1688.50, so long as 1657.00 holds through any close.

Silver
Jun Contract SI; (SLV)
Gapping down Monday under 31.05 support undermines the recovery's potential up to 32.30. Immediately recovering 31.05 through Tuesday's open would reinstate the bounce potential, and possibly extend its target. There is otherwise no active sell signal.

30-year Treasury
Jun Contract US; (TLT)
Only a last-minute spike down Monday probed back under Friday's 142-30 high. Almost any initial weakness Tuesday would target 142-10, whose break would renew the decline. There is otherwise no active buy signal.

Crude Oil
Jun Contract CL; (USO)
Friday's recovery from probing lows bought the recovery a little more time before it must become obvious. Monday's gap down to probe 104.00 was recovered back up to another fresh high testing 105.00, so there should be no further delay in extending higher.

Natural Gas
Jun Contract NG; (UNG), (UNL)
Opening almost any firmer Monday was likely to retest last week's attack on 2.30 high. The target was met by a Rising Wedge into the close. The pattern is likely to resolve up sharply when it appears in an uptrend.

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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