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Crude Oil Met Its Target -- Now What?


The rally is finally getting aggressive, just when crude's longstanding target is met.

Editor's note: Beginning next week, this column can be read daily at

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: Wednesday's volatility enabled crude oil to essentially meet its target, for the euro to potentially resume its decline, and for natural gas to discount Thursday's coming EIA report. None of which need extend Thursday. But gold's balancing act is getting old.

Dollar Basket
Last Thursday's 80.31 opening gap was filled Wednesday, and held. The reaction down has room to 80.00 before suggesting the rally won't extend.

Jun Contract EC; (NYSEARCA:FXE)
Wednesday's low retested last week's low, and held. There is no requirement to retest Wednesday's low, except that the decline has likely resumed so long as 1.1.3700 isn't recovered.

Jun Contract GC; (NYSEARCA:GLD)
Gapping down Wednesday just enough to retest 1289.00 without breaking lower wasn't "ineffectual pessimism," since prior sessions' lows weren't probed intraday. And the session remained in negative territory, so 1289.00 seems to have lost its elasticity. Downtrending shouldn't be far behind.

May Contract SI; (NYSEARCA:SLV)
Wednesday's hovering just above 19.25 support wasn't necessarily bullish, but its break isn't any likelier to extend down.

30-Year Treasury
Jun Contract US; (NYSEARCA:TLT)
Tuesday's recovery from fresh lows had been retraced entirely before Wednesday's open, and extended down to probe fresh lows attacking 136-08. That's one of the last two lines of defense against already beginning a bigger decline instead of first waiting to retest last week's high.

Crude Oil
May Contract CL; (NYSEARCA:USO)
The targeted retest of prior highs up to the 104.00 area was fulfilled Wednesday. The day's range expansion suggests that buyers have more energy to at least test 104.50 either Thursday or Friday, and closing above it would signal a much bigger leg underway.

Natural Gas
Wednesday was the last safe day for a pullback ahead of Thursday's EIA report, but a dip back to the last relative low wasn't rejected in time to signal the pullback was complete. Immediately testing the 4.42 area Wednesday would help to launch a bullish reaction.

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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