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Crude Oil Has More Support to Work Through


Session-long bounce from gapping down reflects too much optimism for a bottom.

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 quickly met its next lower target after having spent so long before breaking under its last consolidation range. Such a steep near-term adjustment suggests a major paradigm shift in economic perceptions.

Dollar Basket
Ranging narrowly Wednesdayranging didn't confirm Tuesday's drop, so no third lower close is required. That doesn't preclude the drop from extending anyway, and there is no active reversal signal. And not reversing down quickly would make Wednesday's hesitation irrelevant.

Dec Contract EC; (NYSEARCA:FXE)
Wednesday's narrow sideways ranging didn't confirm Tuesday's rally, so no third higher close is required. That doesn't preclude the rally from extending anyway, and there is no active reversal signal. And not reversing down quickly would make Wednesday's hesitation irrelevant.

Dec Contract GC; (NYSEARCA:GLD)
Tuesday's extra push to 1341.00 without closing above it (still overlapping it at the close) proved to be its undoing, at least for this effort. Wednesday's open gapped down to test 1329.50 support. But 1329.50 missed the opportunity to break lower, similar to the 1341.00 test. Now closing under 1321.50 is needed to signal momentum reversing back down.

Dec Contract SI; (NYSEARCA:SLV)
Gapping down Wednesday only attacked the month's "lower prior highs" at 22.50, despite coming close early and then hovering through the day. That optimism is potentially bearish, unless rejected almost immediately Thursday by new highs for the rally.

30-Year Treasury
Dec Contract US; (NYSEARCA:TLT)
The rally extended Wednesday to a new high at 135-23, targeting 136-28 so long as pullbacks now hold 135-12. But momentum won't reverse down without closing under 134-24.

Crude Oil
Oct Contract CL; (NYSEARCA:USO)
The next lower target at 96.35 was tested at Wednesday morning's low. The balance of the session firmed, holding the 97.35 bounce limit that keeps alive potential for extending to the next lower target at 92.85-93.15.

Natural Gas
Wednesday's gap up helped to refuel sellers for extending the decline to fulfill its minimum third lower close, which was put into play by Tuesday's confirmation. There is potential for bottoming at 3.53-3.55, but closing under would signal new lows in-play.

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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