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Did the Recent Natural Gas Decline Clean Out Sellers?


The week's low was very capitulative. Almost any initial strength could squeeze shorts.

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: Natural gas' two consecutive breakout closes required at least one more lower close eventually. Fulfilling it before Thursday's wide-ranging session allowed its price action to be considered as accumulative. Friday's action can also be considered accumulative. None of which is a buy signal, not without actually breaking higher.

Dollar Basket
Thursday's retest of Tuesday's gap up created potential for trending sharply higher Friday, if only the open were rallying at all. The open gapped down, keeping in play the attraction to retest recent lows.

Dec Contract EC; (NYSEARCA:FXE)
Potential to fulfill a probe of fresh highs up to 1.3580 was kept alive Friday when the open gapped up and away from Thursday's retest of Tuesday's low.

Dec Contract GC; (NYSEARCA:GLD)
Friday's early morning surge back up to and through Wednesday's highs held its test of 1341.00 resistance. Closing above it and then a second higher confirming close are still needed to signal the 1321.00-1341.00 range has broken out.

Dec Contract SI; (NYSEARCA:SLV)
Friday's gap up to 22.15 quickly reversed down from retesting Thursday's opening peak, and the balance of the session ranged narrowly just under the 21.88-21.95 buy signal.

30-year Treasury
Dec Contract US; (NYSEARCA:TLT)
Thursday's shallow dip easily held the 132-22 pullback limit. Friday's recovery tested Wednesday's high still needing to produce at least one more higher close to fulfill the pattern's minimum requirement.

Crude Oil
Oct Contract CL; (NYSEARCA:USO)
Thursday's extra dip back to 102.35 already made a break lower likely. Friday's extra bounce attacking 104.00 was retraced back to 102.35, still likelier to extend down.

Natural Gas
Having already produced a third lower close, Thursday's recovery from its EIA reaction left only one piece of "unfinished business below" at the open's gap down. Friday's own gap down immediately fulfilled it, and recovered back into positive territory. Any initial strength above 3.59 Monday would target 3.71-3.75.

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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No positions in stocks mentioned.
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