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Crude Oil Signaling a Strong Week Ahead


Fresh highs suggest the shallow pullback won't be extended.

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: While Wednesday's FOMC news enabled or triggered strong moves among several markets such as Gold, that strength may have produced trend extremes. Durable reversals, and new trends, are another story.

Dollar Basket
Blipping up momentarily at Friday's open was reversed into negative territory instead of extending higher to confirm Thursday's break had resumed the rally. Another break higher Monday would still be likely to extend higher intraday, but still not requiring that it be confirmed.

Mar Contract EC; (NYSEARCA:FXE)
Friday's opening blip-down was reversed into positive territory Friday, just enough to avoid confirming Thursday's break had resumed the decline. A fresh low close Monday is no less likely.

Feb Contract GC; (NYSEARCA:GLD)
Although Thursday's post-close low wasn't revisited, Friday's open briefly probed a fresh intraday low to fulfill the pattern's minimum downside requirement. The reaction up to 1205.00 resistance suggests as much. This is not a permanent bottom, but back above 1217.00 would target a test of 1232.50 resistance. Backing-and-filling first down to 1195.00-1197.00 would be helpful.

Mar Contract SI; (NYSEARCA:SLV)
Without probing any lower than Thursday's intraday lows, Friday's bounce signaled room up to 19.70 just as noise without yet reversing momentum up.

30-year Treasury
Mar Contract US; (NYSEARCA:TLT)
Ranging around 129-16 revisited its upper end Friday at 130-04, further delaying the attraction back to the lows but not invalidating it.

Crude Oil
Feb Contract CL; (NYSEARCA:USO)
[ROLLING COVERAGE FORWARD FROM JAN TO FEB] Friday's second consecutive higher close above the prior rally leg's 98.65 target has confirmed the pullback targeting the 94.00 area already ended and that 101.75 is in play. Pullbacks must now hold 98.15 as support.

Natural Gas
Thursday's surge on the EIA report extended higher overnight to test the 4.48-4.51 target's lower end. Its reaction down Friday held lower prior highs down to 4.41, maintaining the rally's momentum.

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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