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Energies Getting In Synch to Launch a Rally?


Natural gas and crude are getting in synch, which could signal a rally.

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 reacted down Tuesday after the morning's fresh high fulfilled the rally's initial target. The timing is interesting compared to crude oil, which finally reacted down from testing resistance. Could both markets be getting in synch with each other to rally in unison?

Dollar Basket
Sep Contract DX; (UUP), (UDN)
Tuesday's weakness did not extend down, which would have confirmed Monday's gap up was not "ineffectual optimism." That remains relevant Wednesday because a fresh high for the week could gain traction to extend higher. There is otherwise no active signal.

Sep Contract EC; (FXE)
Tuesday's open gapped up instead of down, testing 1.2320 resistance. Monday's gap down would be invalidated if its low were not broken through Wednesday's close. Fresh highs Wednesday would be difficult to gain traction for extending higher.

Aug Contract GC; (GLD)
The rally's 1622.00 target was probed temporarily Tuesday up to 1627.50 before reversing back down to new lows for the week at 1610.00. The failure to close above 1622.00 suggests that momentum is reversing down.

Sep Contract SI; (SLV)
Tuesday's probe above 28.25 was rejected to close back under 28.00, avoiding a buy signal targeting 30.00-30.35.

30-year Treasury
Sep Contract US; (TLT)
Monday's corrective bounce retracing Friday's plunge extended higher Tuesday, but only temporarily before reversing back down into negative territory. The close was essentially testing Monday's 151-06 high as resistance. Closing back under 150-13 would signal the decline had resumed.

Crude Oil
Sep Contract CL; (USO)
Ongoing narrow ranging at 90.00 resistance finally pushed back when Tuesday dipped down to attack 87.50. Now 89.25's recovery should suffice to trigger a rally that initially targets 92.65-92.75.

Natural Gas
Sep Contract NG; (UNG), (UNL)
Probing the rally's 3.26 target by $.02 Tuesday reacted down sharply to 3.16. Closing any lower would target the gap back down to Friday's close at 3.00.

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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