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Have the 'Fear' Commodities Gotten Too Far Ahead of the War?


Gold and crude oil show weakness at Tuesday night's highs.

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: Overnight follow-through to Tuesday's beating war drum was less relevant intraday Wednesday. Could markets have been too confident that hostilities were coming, or that they would have an effect?

Dollar Basket
Recovering to 81.45 and ranging around it Wednesday now must follow-through without delay Thursday to become a new upleg. Otherwise, another downdraft will have become much likelier for the near-term.

Sep Contract EC; (NYSEARCA:FXE)
Wednesday's dip ranged around Tuesday's 1.3333 low, whose break would also signal a new downleg underway. That's now two attempts to trend down without result. Almost any early rally Thursday would be credible for at last probing fresh highs, if not trending up.

Oct Contract GC; (NYSEARCA:GLD)
Probing sharply higher Tuesday night was retraced entirely, ranging narrowly sideways intraday Wednesday around Tuesday's close. That prevented a second consecutive higher close, putting the rally in jeopardy of reversing down.

Sep Contract SI; (NYSEARCA:SLV)
The overnight rally through 25.00 was retraced to close in negative territory Wednesday, forming a "key reversal" setup that often triggers a multi-session trend reversal.

30-year Treasury
Sep Contract US; (NYSEARCA:TLT)
Wednesday's gap down retraced all of Tuesday's flight-to-safety back to 132-10. Closing under 131-30 would signal momentum reversing down, targeting new lows.

Crude Oil
Oct Contract CL; (NYSEARCA:USO)
Tuesday night's multi-dollar rally probed above 112.00, but only Wednesday's open touched the rally's 110.65 target. The balance of the session consolidated around 110.00. There is no new signal.

Natural Gas
Firming to the recent range's upper-end ahead of Thursday's EIA report does position the market for a favorable reaction to extend sharply higher. It also requires a favorable reaction in order to avoid a significant decline.

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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