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Natural Gas Confirmed Its Breakout


The breakout targeting slightly higher highs could itself trigger a much larger rally.

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: Thursday's natural gas surge fulfilled the two-day pivot reversal setup. Thanks to the tremendous intraday move, its target is only slightly higher. But also thanks to the tremendous intraday move, the pattern has potential to become a much more substantial rally.

Dollar Basket
The 82.80 bounce limit held as resistance Thursday to maintain potential for resuming the drop targeting 81.40.

Jun Contract EC; (NYSEARCA:FXE)
Thursday's flat-to-higher range only attacked 1.3105 instead of recovering it to fill the gap to 1.3200, or to resume the rally next targeting 1.3325.

Apr Contract GC; (NYSEARCA:GLD)
Wednesday night's break under the range's 1364.50-1372.00 lower-end extended $30 as was expected, plunging to test 1335.50. Also, as was expected, the reaction recovered entirely, testing the range's 1395.00-1400.00 upper-end. Regular trading hours consolidated around the upper-end, and any initial strength Friday would be credible for extending sharply higher into and out of the weekend, initially targeting 1428.00.

May Contract SI; (NYSEARCA:SLV)
Wednesday night's drop was recovered enough to hold tests of 22.45 intraday Thursday, keeping alive the attraction to 24.15 by the next rally attempt.

30-year Treasury
Mar Contract US; (NYSEARCA:TLT)
Thursday's consolidation was exclusively above the 148-00 pullback limit, maintaining the 149-16 target.

Crude Oil
Apr Contract CL; (NYSEARCA:USO)
Despite having bounced overnight up to 88.15 from Wednesday's 86.75 close, Thursday's open gapped up only modestly. The balance of the session recovered to probe the overnight high. The bounce must hold 89.00 as resistance to maintain its potential for extending down to 85.00.

Natural Gas
The two-day pivot reversal setup that completed on Wednesday required very sharp follow-through Thursday to prove a breakout was underway. The 4.18 pullback limit held a touch before reacting to EIA by surging to 4.33. The break extended higher to 4.41, targeting 4.50 so long as 4.33 now holds as support. Extended targets are 4.75-4.87 and higher.

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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