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Volatility Ahead for Commodities


A day after major targets are met, the market pauses. Expect the volatility to accelerate.

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: A lot of choppy intraday volatility among various futures, one day after so many major targets were met. If this is a "pause that refreshes" the prevailing trends, then look for them to accelerate their paces.

Dollar Basket
Jun Contract DX; (UUP), (UDN)
The rally's 82.00 target that was met Wednesday served as support Thursday morning to launch an extension of the rally to fresh highs at 82.53. Potential to 82.70 remains alive so long as 82.25 holds as support.

Jun Contract EC; (FXE)
Fresh lows overnight tested 1.2515 before bouncing back up to 1.2545. There is still room up to 1.2655 before signaling the drop has ended.

Jun Contract GC; (GLD)
The $30 rally Wednesday's off of the decline's 1533.00 target left the pattern without a predictable next step. So it isn't surprising that extending the rally Thursday morning back to the original 1578.00 sell signal was reversed back down to 1551.00. Closing above 1561.00 would have been bullish, but there is still no predictable path.

Jun Contract SI; (SLV)
Overnight gains repeatedly tested 27.85 resistance before breaking higher ahead of Thursday's open, which quickly surged to 28.50. A bigger rally would be signaled by closing above 28.50, and so long as 28.00 were to hold as support.

30-year Treasury
Jun Contract US; (TLT)
Despite peaking Wednesday 4 ticks short of retesting last week's 148-22 overnight high, Thursday's open gapped down and the entire session ranged narrowly around 147-14 support. There is still no active signal.

Crude Oil
Jul Contract CL; (USO)
Wednesday's close confirmed that 86.00 is in-play. That didn't prevent Thursday's corrective bounce back up to 91.50. Its reaction down held 90.30 as support, whose break would signal the decline had resumed.

Natural Gas
Jun Contract NG; (UNG), (UNL)
Thursday's range was largely contained within 2.65-2.72. The EIA report didn't shake things up, and it should have been a catalyst for expanding volatility. This always makes me suspicious, so any further delay to extending the rally would suggest a corrective dip coming.

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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