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Could Crude's Premature Reversal Suggest Bad News on the Horizon?

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Take a look at the intraday action in commodities.

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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: I am not one of its proponents -- and perhaps that's why I'm always happy to point out when crude oil's correlation becomes questionable.

Dollar Basket
Dec Contract DX; (NYSEARCA:UUP), (NYSEARCA:UDN)
Tuesday's rally was immediate, and it immediately surged, closing at new highs, hardly even acknowledging 80.00 resistance on the way to fresh highs, suggest the tide has turned positive

Eurodollar
Dec Contract EC; (NYSEARCA:FXE)
Tuesday's steep decline back to prior lows doesn't prevent another corrective bounce. But it would likely peak upon testing 1.2950-1.2975, and - regardless of probing higher first - fresh lows are now likely, and likely targeting 1.2740.

Gold
Dec Contract GC; (NYSEARCA:GLD)
Holding 1770.00 as support Monday allowed the recovery to resume, but it didn't prevent Tuesday from extending lower to 1762.00. Now recovering 1770.00 must be confirmed by closing above 1780.00 to signal that 1814.00 is in-play.

Silver
Dec Contract SI; (NYSEARCA:SLV)
Monday's break lower targeting 33.00 could have been invalidated by Monday immediately recovering from testing 34.00. But the dip to almost 33.50 was largely recovered. The 33.00 target should be tested regardless of whether Tuesday's close is much higher. But its support could still hold.

30-year Treasury
Dec Contract US; (NYSEARCA:TLT)
Monday's bounce to just above 148-00 had peaked for short of even attacking the 148-26 bounce limit. That helped Tuesday's gap down to 147-21 rally back up to 148-14. It's still too shallow to qualify as fulfilling the pattern's corrective bounce, but closing back under 147-26 would signal momentum already reversing down.

Crude Oil
Nov Contract CL; (NYSEARCA:USO)
Monday's low stopped optimistically short of filling the gap back down to last Wednesday's 88.20 close. Nevertheless, Tuesday's open gapped up through 90.15 and extended sharply higher intraday to attack 93.00 to within a dime. A fresh low was required to form a durable bottom, but closing above 93.00 would still be credible for launching a sizable rally to test 100.00, first, spurred by anticipation of bad news on the horizon.

Natural Gas
Nov Contract NG; (NYSEARCA:UNG), (NYSEARCA:UNL)
Rather than probe either of the past two sessions' lows before rallying, Tuesday already surged through 3.45. I'll give it the benefit of the doubt for being able to extend higher - if confirmed by a second consecutive higher close, and so long as 3.45 holds as support.

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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