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Are Commodities Ready for a Corrective Dip?

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Gold is still ranging around last week's bounce target while crude oil gets extended.

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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: It's probably too early for gold to extend its recovery, unless this has been only a temporary corrective bounce. That didn't stop it from trying, and crude oil seemed to come along prematurely for the ride. If a a corrective dip is coming anytime soon, then it should be obvious by no later than Wednesday's open.

Dollar Basket
Jun Contract DX; (NYSEARCA:UUP), (NYSEARCA:UDN)
Friday's reaction down from the 82.80 bounce limit extended down sharply Monday to fresh lows at 82.10. Any lower would continue targeting 81.80, but closing back above 82.45 could now end the pullback.

Eurodollar
Jun Contract EC; (NYSEARCA:FXE)
The door still remained open to a rally, and Sunday night compensated for the delay by gapping up above Friday's 1.3040 high and rallying sharply up to 1.3120. Back under 1.3065 would start to signal momentum reversing down. Otherwise, the rally's momentum remains intact.

Gold
Apr Contract GC; (NYSEARCA:GLD)
While Friday's volatility suggests that ultimately the recovery intends to continue, a deeper pullback first became likely. That didn't prevent Sunday night's double-digit rally back up toward 1478.50. But the balance of the session ranged narrowly sideways, forming an inside day, that remains more vulnerable to reversing back down next.

Silver
May Contract SI; (NYSEARCA:SLV)
Monday's gap up ranged sideways under Friday's highs, dipping back to the rally's original 24.20 target (basis Jul, 2415 basis May).

30-year Treasury
Mar Contract US; (NYSEARCA:TLT)
Monday's narrow ranging around Friday's high got up to 149-05, but ultimately failed to extend any higher. There remains potential up to 149-14, so long as 148-16 were to hold support. And now the sell signal can be raised from 147-26 up to 148-06.

Crude Oil
Apr Contract CL; (NYSEARCA:USO)
Although Friday's dip to 92.05 ultimately recovered enough to maintain the rally's momentum, its immediately resumption wasn't likely. It resumed immediately anyway, probing fresh highs Monday testing 94.70. Avoiding any near-term weakness back under 93.25 to signal momentum reversing down would instead target 95.30 and 96.00.

Natural Gas
Apr Contract NG; (NYSEARCA:UNG), (NYSEARCA:UNL)
Friday's recovery from its deep intraday dip kept open the same setup that any initial strength Monday would be likely to extend sharply higher intraday. The open gapped up sharply, itself, but still extended from 4.30 to attack 4.40. This leg has potential to 4.48 and 4.53.

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.
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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