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Did Someone Forget to Tell Crude Oil the SPR Rumors Were False?


One expert interprets price action in liquid commodities.

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: That rumor about the administration releasing Strategic Petroleum Reserves (or SPR) had a big immediate effect on crude oil Monday, a lot of which was recovered before the close. So if the pattern is at all bullish, then why did Tuesday's session nearly retest Monday's lows?

Dollar Basket
Dec Contract DX; (UUP), (UDN)
Tuesday's gap up firmed throughout the day, peaking pessimistically short of fully filling the gap back to Thursday's close. Any early aggressive strength Wednesday would be credible for trending sharply higher intraday. Otherwise, almost any delay in rallying Wednesday would be vulnerable to attacking this week's lows.

Dec Contract EC; (FXE)
Tuesday's gap down remained under pressure throughout the day, but never really extended or recovered, leaving no new signal.

Dec Contract GC; (GLD)
Monday night's continued probing under 1760.00 blipped down momentarily to test the 1754.00 support. Despite its substantial reaction up probing 1770.00, the balance of the session only ranged sideways. Any immediate rally effort would be credible for resuming the rally next targeting 1214.00. Any delay in resuming the rally would suggest a bigger drop down to 1740.00 underway.

Dec Contract SI; (SLV)
Tuesday's surge to fresh highs above 35.00 reacted back down under prior highs, but the session remained in positive territory to prevent sellers from gaining traction, and to keep alive potential up to 35.40.

30-year Treasury
Dec Contract US; (TLT)
Despite gapping up Wednesday, the balance of the session only ranged sideways, which still suggests that a fresh low is needed before a meaningful upleg can begin.

Crude Oil
Oct Contract CL; (USO)
The reaction up from Monday's sudden plunge on SPR rumors extended overnight to test 97.25. But Tuesday's session only softened to within $.50 of Monday's 95.65 low. Closing under 94.80 would likely trigger a more substantial downleg. Closing above 97.00 would more likely attack 100.00 again.

Natural Gas
Oct Contract NG; (UNG), (UNL)
Monday's extension of Friday's drop only extended more deeply Tuesday. No buy signal would be credible on Wednesday.

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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