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Does Natural Gas Need to Push Back for a Little While?


Recent range's characteristics suggest its rally has bitten off more than it can chew for now.

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: Has natural gas's blowout blown itself out? Fluctuating widely between two relevant levels during a brief window -- after a sizable, brief rally -- is fomenting the likelihood for a corrective dip.

Dollar Basket
Extending its bounce Thursday tested 80.45 resistance that must hold to launch a new downleg targeting 79.80.

Mar Contract EC; (NYSEARCA:FXE)
Room for extending the dip down to 1.3700 was tested and retested Thursday morning, now needing no further delay to resume the prior decline if a retest of the highs can be avoided.

Apr Contract GC; (NYSEARCA:GLD)
Despite extending down overnight from Wednesday's relatively muted reaction to the FOMC minutes, Thursday's session only ranged narrowly around its shallower opening gap down. The "ineffectual pessimism" makes any initial strength Friday likely to extend higher intraday.

Mar Contract SI; (NYSEARCA:SLV)
Gapping down only slightly Thursday and ranging narrowly sideways held 21.65 support, whose break would suggest a deeper pullback underway targeting 20.70.

30-year Treasury
Mar Contract US; (NYSEARCA:TLT)
The reaction down from attacking 134-00 extended Thursday back to 132-12, which had triggered the original buy signal. The proximity to a gap outstanding below at 132-08 makes any recovery premature if not yet filling the gap to neutralize its attraction below.

Crude Oil
Apr Contract CL; (NYSEARCA:USO)
Still ranging around 103.00 as the front-month rolls from March to April. Two consecutive higher closes already confirmed a third eventual higher close outstanding, but resistance at 103.00 suggests a dip back toward 101.00 may precede fresh highs.

Natural Gas
Surging overnight to a fresh high at 6.40 from 5.89 was retraced to 5.89 intraday. That also produced a bounce, albeit to 6.30. Maintaining the rally's momentum and avoiding a corrective dip to 5.55 requires holding 6.03-6.06 as support.

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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