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Last Week's Suspicious Surge in Crude Oil Gets Hammered by This Week's SPR News


There was an entire weekend for Thursday's FOMC news and Friday's reaction to ruminate, but Monday's session still seemed to be in shock.

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: There was an entire weekend for Thursday's FOMC news and Friday's reaction to ruminate, but Monday's session still seemed to be in shock. Crude oil stood out, its plunge showing why last week's break to fresh highs was suspicious.

Dollar Basket
Sep Contract DX; (UUP), (UDN)
The Dollar Index did not print new lows Monday, contrary to the euro printing a momentary new high. Strength in the euro as defined below would be that much more credible for extending.

Sep Contract EC; (FXE)
Monday morning's momentary fresh high above 1.3180 was retraced back down toward Friday afternoon's 1.3100 low. If not rejected immediately Tuesday - or even overnight, - then the gap back down to Thursday's ~1.2980 close will likely be filled next.

Dec Contract GC; (GLD)
Monday morning continued to avoid resuming the rally, while still consolidating just above the 1760.00-1770.00 target area's upper-end. An afternoon drop tested the target's lower-end. Closing above 1770.50 would signal the rally was resuming to its 1814.00 target. Closing under 1754.00 would trigger a much deeper correction down.

Sep Contract SI; (SLV)
The rally could not afford any further hesitation. The bottom finally dropped out Wednesday afternoon by plunging from 34.50 to 34.85. Closing above 34.50 would now resume the rally targeting 35.40. But a second consecutive lower close Tuesday would trigger a deeper correction, targeting at least 32.95-33.20.

30-year Treasury
Dec Contract US; (TLT)
Monday's narrowly ranging session was more than an inside day. The gap back to Friday's close was filled, and the balance of the session firmed. So the optimism was credible, and potentially bullish. But unless it were to extend higher without delay Tuesday, that bullishness will only help to absorb and reject a fresh low so that a durable rally leg can form.

Crude Oil
Oct Contract CL; (USO)
Last week's surge above the 97.00 buy signal was not credible. It was retraced entirely Monday - and then some - by a $3.50 plunge down through 95.00 on rumors of a release by the Strategic Petroleum Reserves (or SPR). The ongoing Double Top pattern remains intact.

Natural Gas
Oct Contract NG; (UNG), (UNL)
Monday's session extended Friday's drop, but a recovery above 3.01 is still the minimum requirement to trigger a new upleg targeting 3.25. Another day consolidating the pullback would allow a lower buy signal to be calculated.

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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