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Back-to-Back Intraday Sell-Offs May Have Earned Crude Oil a Rally Leg


Trapped shorts need to be squeezed.

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: Crude oil's two consecutive deep intraday/overnight drops probably have earned at least an obligatory fresh high, presumably by a minimum $2 margin, if not much more.

Dollar Basket
Despite having retraced Monday's fresh highs back to the 82.80 bounce limit, Tuesday's open gapped up and ranged sideways around Monday's 83.05 high. Delaying the decline's resumption any longer would all but require extending the rally to fresh highs.

Jun Contract EC; (NYSEARCA:FXE)
Tuesday's gap down recovered only enough for the balance of the session to range around the 1.3020 prior low. Its immediate recovery is not only likely, but also required in order to resume the rally before testing 1.2955 and probably breaking lower.

Apr Contract GC; (NYSEARCA:GLD)
Monday's dip to 1418.00-1420.00 was probed overnight instead of recovering the 1432.50 buy signal. The deeper dip to 1408.00 and 1404.00 still closed back above the 1409.00 prior highs. Recovering 1421.00 would now trigger another rally leg targeting 1441.00 and 1556.00.

May Contract SI; (NYSEARCA:SLV)
Recovering Monday back above 23.25 had failed to close above the 23.55 buy signal, so Tuesday's open wasn't inhibited from gapping down under 22.90 and probing new intraday lows at 22.55. That's still above last week's 22.43 overnight low, and now back above 23.25 would signal momentum reversing up.

30-Year Treasury
Mar Contract US; (NYSEARCA:TLT)
The 149-14 target attracted price higher overnight to 149-06, but Tuesday once again was more about testing and holding the 148-00 pullback limit.

Crude Oil
Apr Contract CL; (NYSEARCA:USO)
Despite having recovered back above the morning's highs, Monday's volatile dip into negative territory was retraced overnight. And despite retracing the dip to produce a gap down Tuesday, the balance of the session recovered back to Monday's highs. A fresh high targeting at least 91.05 remains likely.

Natural Gas
The retracement of Thursday's surge extended lower Monday night to test 4.21. Any lower would require a new accumulation pattern to form before triggering a buy signal.

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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