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Natural Gas Dipping Into a Base


This pullback could be constructive longer term. Nearer term...not quite yet.

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 pulled back hard from retesting its high. That's not necessarily bearish. But it's not yet bullish.

Dollar Basket
Thursday's gap up extended higher intraday, but still peaked short of filling the gap back to last Wednesday's close. The attraction remains outstanding, and in play, so any pullback should be recovered.

Mar Contract EC; (NYSEARCA:FXE)
The rejection of last Thursday's false break higher was almost completed at this Thursday's gap down to 1.3580. The gap back to last Wednesday's 1.3545 was filled by extending down through the session. A lot of unfinished business below was neutralized, which might allow a bounce. But the resolution should be down, especially considering that the gap was barely filled at the session low.

Apr Contract GC; (NYSEARCA:GLD)
Rallying prematurely Wednesday to attack 1270.00 resistance didn't relieve the pattern of its likelihood for pulling back further to test 1240.00, which Thursday morning's drop fulfilled. That would have been bullish Wednesday morning, and may still resolve higher. But delaying the pullback created resistance above at 1256.00, and further downside potential to test 1226.00.

Mar Contract SI; (NYSEARCA:SLV)
Failing to recover 19.70 kept the door open to extending the decline, which Thursday's gap down to 19.10 ranged narrowly sideways. Avoiding a second consecutive lower close Friday would help the break to be false, and to launch a recovery.

30-year Treasury
Mar Contract US; (NYSEARCA:TLT)
The reaction down from fulfilling the 133-16 target Wednesday was almost immediate, dipping to 132-25 intraday. But closing back above the 133-02 pullback limit would prevent a downleg from beginning.

Crude Oil
Mar Contract CL; (NYSEARCA:USO)
Overnight strength extended to fulfill the pattern's 98.55 target Thursday morning. Potential for extending higher remains intact so long as pullbacks now hold 97.65 as support. Closing above 98.80 would suggest the rally is extending.

Natural Gas
Wednesday's retest of Sunday night's high had held its 5.40 resistance, and then reacted down Thursday to test 5.00, which is a 61.8% retracement of the upleg from Monday's 4.65 low. Back above 5.34 would resume the rally. Otherwise, the pullback could first test 4.85. Back under 4.77 would signal a new downleg underway.

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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