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Crude Oil Now Testing Major Resistance

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Gapping up expends buying pressure; testing a target fulfills buying pressure. Is it time to correct?

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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: Crude oil met its outstanding target at Wednesday's high, and in a very aggressive fashion. Extending higher without delay would start to suggest a much more substantial rally underway. Meanwhile, the natural reaction would be to at least back-and-fill down to recent support.

Dollar Basket
Jun Contract DX; (NYSEARCA:UUP), (NYSEARCA:UDN)
Slightly probing above Tuesday's high would have been optimal before reversing down. Wednesday reversed down sharply anyway. The rally's 83.33 target was not even attacked, so a little more weakness Thursday is likely.

Eurodollar
Jun Contract EC; (NYSEARCA:FXE)
A slightly lower low would have been optimal before trying to reverse up. Wednesday reversed up anyway, already attacking the decline's original target at 1.2955 as resistance. Extending higher to close above 1.3020 Thursday would signal that a bottom had already formed.

Gold
Aug Contract GC; (NYSEARCA:GLD)
Wednesday's third consecutive gap up was the first not to probe well above the prior session highs. Much of the session ranged around Tuesday's highs before dipping to fill the gap back down to Tuesday's close. A spike up to fresh highs above 1264.00 on FOMC minutes was retraced back to the spike's 1246.00 origin. Closing negative would have been optimal for signaling both that buyers were done and that sellers were already retaking control.

Silver
Sep Contract SI; (NYSEARCA:SLV)
Wednesday's ranging was choppy, and not at all trending, despite the volatility surrounding it. Fresh lows should still be tested before a rally effort can be very credible.

30-year Treasury
Sep Contract US; (NYSEARCA:TLT)
Wednesday's slide to 133-30 reacted up on FOMC minutes, then extended to fresh lows at 132-21, presumably on the way down to 128-10/128-14, so long as 133-04 holds as resistance.

Crude Oil
Aug Contract CL; (NYSEARCA:USO)
Wednesday extended up aggressively - spiking - fulfilling the appropriate behavior if momentum to the rally's 106.35 target was still intact. The target was met Wednesday afternoon up to 106.66, with the prior two sessions' 103.30 "lower prior highs" now being likely to attract price down for a test as support.

Natural Gas
Aug Contract CL; (NYSEARCA:UNG, UNL)
A surge to fresh highs above Monday's 3.76 high before Wednesday's open was retained only enough to produce a gap up to Tuesday's 3.71 high, which soon stumbled back to Tuesday's 3.66 close. A fresh low first would have been likelier to extend higher intraday. Reaction to Thursday's EIA report may continue to make that clear.

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.
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