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Natural Gas Has the Weekend Warm-Up on Its Mind


It couldn't rally on record cold, so clearly there was something wrong.

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: The massive head and shoulders forming in natural gas started breaking lower Wednesday, extended lower Thursday, and has no reason not to extend further into and out of the weekend. There being no excuse, retracing the dip Friday could be bullish.

Dollar Basket
Thursday's dip was recovered back up to Wednesday's high, but was still testing it instead of clearly extending higher to confirm a bigger upleg underway. There should be on further delay if the rally's momentum remains intact.

Mar Contract EC; (NYSEARCA:FXE)
The ongoing drop found brief respite in the delayed reaction to Thursday morning's BOE and ECB interest rate policy announcements. The steep surge testing Wednesday's high wasn't retraced entirely back down under Wednesday's lows, where a second consecutive lower close could confirm a much more substantial decline is underway. But there should be no further delay to extending the decline if it remains valid.

Feb Contract GC; (NYSEARCA:GLD)
Bounce testing 1230.50 resistance were held back Thursday, essentially greeting Friday's employment situation report from a position of weakness that requires all the more for any bullish scenario to recover at least 1232.50, if not also 1237.00.

Mar Contract SI; (NYSEARCA:SLV)
Bouncing held the 19.70 resistance whose recovery is still needed to signal another rally leg is underway.

30-year Treasury
Mar Contract US; (NYSEARCA:TLT)
Gapping up Thursday above Wednesday's high is a little premature for a pattern whose main problem is the impatient optimism preventing a bottom to finish forming. An initially negative knee-jerk reaction down on Friday's employment situation report could finish the bottom. By the same token, reacting up would be likely to retrace.

Crude Oil
Feb Contract CL; (NYSEARCA:USO)
The drop extended Thursday toward its 90.50-91.25 target, which remains intact so long as bounces now hold 93.35 as resistance.

Natural Gas
The massive head and shoulders pattern began breaking lower into Wednesday's close under 4.24, and extended down further through Thursday's EIA report to test 4.05. The 3.87 target remains in play.

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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