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Will Natural Gas Hand Off the Baton to Crude Oil Soon?


Critical targets, levels, and supports for major liquid 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: Natural gas met its target Wednesday by gapping up through it. The gap up didn't prevent closing negative; - if anything, gapping up while satisfying buying pressure made the reaction down more violent. But it's interesting that the natural gas target is being fulfilled while another energy (crude oil) is breaking higher prematurely.

Dollar Basket
Sep Contract DX; (UUP), (UDN)
Wednesday's probe of fresh highs was still possible since sellers had not gained traction for their efforts Monday or Tuesday. But buyers were not gaining new traction, either, so Wednesday's failure to maintain its probe of fresh highs is not surprising. There is still no sell signal.

Sep Contract EC; (FXE)
Tuesday's recovery from gapping down was in-line with Monday's gap down that had not extended down further. But Tuesday's recovery was not necessarily bullish. Similarly, Wednesday's gap down to retest Tuesday's low was not bearish. But the pattern continues to suggest that sellers are tired, and need some sort of bounce to refuel.

Aug Contract GC; (GLD)
A second consecutive lower close Wednesday would have confirmed that momentum had reversed down. Wednesday's fresh low down to 1563.00 certainly tried, but reacted up into positive territory testing 1584.00. The choppiness subsided somewhat to eventually settle slightly higher testing 1580.00. A rally to fresh highs above would be signaled underway by closing above 1584.00.

Jul Contract SI; (SLV)
Last week's low was attacked down to 26.60 in a choppy session that ultimately settled nearly unchanged. Back above 27.05 should extend higher to and through 27.50 to avoid entering a much larger decline.

30-year Treasury
Sep Contract US; (TLT)
Tuesday's session was almost an inside day but for the morning's slightly lower low. That slightly lower low. allowed Wednesday's session to actually be an inside day. Regardless, not reacting down while stocks rallied does suggest an eventual break above 149-18 is approaching. Perhaps one more intraday dip under 148-00 is needed to flush out remaining sellers.

Crude Oil
Aug Contract CL; (USO)
The recently formed Symmetrical Triangle has broken higher first, and not lower, leaving outstanding a final low under 78.25. Meanwhile, the break higher can still test 81.45 before suggesting a bigger corrective bounce may be underway.

Natural Gas
Jul Contract NG; (UNG), (UNL)
Wednesday's gap up above the rally's 2.83 target intraday to test 2.95 was nevertheless reversed back into negative territory under 2.75. Having fulfilled the pattern's target, and reacting down meaningfully (turning negative), a consolidation would now be appropriate before another signal can generate.

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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