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Euro's Short-Squeeze Signal: More Than Meets the Eye

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Critical targets, levels, and supports for major 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: My comment about currencies wasn't a brief statement, but it was an understatement: "Almost any strength Friday was likely to trigger a steep and substantial surge into Monday's open." Eurozone news overnight triggered an attack on the prior week's lows. Most interesting is that these are only corrective legs.

Dollar Basket
Sep Contract DX; (UUP), (UDN)
The "buyers are tired" setup proved out Friday in stunning fashion. News of Europe being saved sent the dollar tumbling under 82.75 to trend down sharply. 82.00. Avoiding a second consecutive lower close would suggests a corrective dip had ended.

Eurodollar
Sep Contract EC; (FXE)
Europe's overnight news triggered a surge through the 1.2470 signal to trend up sharply to 1.2640. The rally remains intact so long as 1.2645 holds as support.

Gold
Aug Contract GC; (GLD)
Friday was unlikely to confirm Thursday's second fresh low close of the week at 1551.00, since Tuesday's break wasn't confirmed Wednesday. Another understatement for the day. An overnight rally triggered a gap up above Thursday's high to 1584.00 and through Wednesday and Thursday's highs, extending higher to 1608.00. The rally can persist so long as 1594.00 were to hold as support.

Silver
Sep Contract SI; (SLV)
The 26.45 buy signal was recovered easily overnight to test 27.50 up to 27.84. There is a lot of resistance above, but one more higher close would confirm a test of 30.00-30.35 underway.

30-year Treasury
Sep Contract US; (TLT)
Having rallied Thursday prior to refueling buyers with a fresh low, the rally effort could not afford to hesitate. It did. The 149-18 sell signal triggered a plunge to 147-24, under 148-00 whose test first would have made Thursday's rally durable. Now a close above 148-18 would trigger a retest of 149-24 and higher.

Crude Oil
Aug Contract CL; (USO)
The recovery wasted no time appearing after Thursday's new low closed finally fulfilled the decline's unfinished business below. A slightly lower low under 76.00 was possible, but not required. Europe's news made it impossible. Friday's 84.20 high can now absorb pullbacks down to 82.50, needing a break above 85.50 to signal a new rally leg underway. A downleg would be signaled under 81.60.

Natural Gas
Aug Contract NG; (UNG), (UNL)
Another intraday bounce Friday attacked the rally's 2.83 target. It can be tested up to 2.88 without resuming the rally - and probably wouldn't on its first test.

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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