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Natural Gas Pop Might Be Refueling Sellers


Last week's head-and-shoulders break hadn't yet met its target.

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 had broken lower last week from a massive head-and-shoulders pattern. Monday's big bounce threatens to reverse momentum back up prematurely. Possibly. That, or the more likely scenario that the bounce is refueling sellers for a bigger downleg.

Dollar Basket
Narrow ranging Monday failed to offer any new parameters. Trending early Tuesday would be less credible.

Mar Contract EC; (NYSEARCA:FXE)
Monday morning's dip confirmed that buyers had gained no traction for Friday's fresh high that had held the noise range around prior highs. But momentum hasn't reversed back down, and there is no active signal.

Feb Contract GC; (NYSEARCA:GLD)
Overnight strength to 1255.00 was corrected Monday morning, but recovered into the afternoon. The rally's momentum now remains intact so long as 1246.00 holds as support.

Mar Contract SI; (NYSEARCA:SLV)
Fresh highs were slow to materialize Monday, but eventually followed gold up, and then outperformed it by probing overnight highs testing 20.45.

30-year Treasury
Mar Contract US; (NYSEARCA:TLT)
Hardly any hesitation interrupted last week's recovery from extending higher Monday, testing 131-08. A second-consecutive higher close Monday would require there to be a third, and probably a test of 131-28.

Crude Oil
Feb Contract CL; (NYSEARCA:USO)
More selling Sunday night and Monday confirmed that Friday's bounce was only corrective, and that targets remain outstanding back into the 90.50-91.25 range, which was being attacked Monday afternoon.

Natural Gas
Monday morning's steep surge tested the head-and-shoulders pattern's 4.22 neckline as resistance. A 61.8% retracement of the one-week drop from 4.43 is 4.26, with room for noise around it up to 4.36 before signaling a new upleg is underway. Closing Monday back under 4.11 would have been optimal for confirming the pattern's 3.87 target remains intact. A second-consecutive higher close Tuesday would start to be bullish.

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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