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Crude's Continued Plunge Is Confirming Its Double Top


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: Crude oil's failure to recover Tuesday helped to confirm the Double Top pattern was taking control. Wednesday's $4 drop to fresh lows confirmed this pattern, too.

Dollar Basket
Wednesday's early aggressive strength should have been credible for extending sharply higher intraday. But there was no post-open buying, and a quick reversal back into negative territory eventually fell to Tuesday's lows. Now a recovery above 79.40 would be likely to extend sharply higher intraday. Fresh lows could extend to new lows for the trend.

Dec Contract EC; (NYSEARCA:FXE)
Wednesday's opening dip almost immediately bottomed and began reversing up into positive territory. Tuesday's intraday highs held as resistance, stopping pessimistically short of ever touching Monday's range, still being vulnerable to touching fresh highs 1.3200 above.

Dec Contract GC; (NYSEARCA:GLD)
Tuesday's recovery back above 1770.00 from Monday's dive under 1760.00 did not extend higher Wednesday. This will not be a problem if Thursday does close at fresh highs, which would resume the rally targeting 1814.00.

Dec Contract SI; (NYSEARCA:SLV)
A rogue dive attacked support, but recovered back into positive territory, maintaining potential for extending to the 35.40 target

30-year Treasury
Dec Contract US; (NYSEARCA:TLT)
Wednesday's initial strength was retraced entirely to back under Tuesday's highs. This should clear the way for a drop to fresh lows under 146-00 on whatever catalyst (Thursday's econ calendar is pretty dangerous), where there will be potential to launch a better bounce to above 150-00.

Crude Oil
Oct Contract CL; (NYSEARCA:USO)
Tuesday's shallow temporary bounce kept alive the bearish Double Top pattern. Wednesday's $4 tumble confirms it. Closing above 93.00 would rob sellers of their traction for a bigger bounce up to 95.50. But otherwise, 87.00 and 85.00 are targeted.

Natural Gas
Tuesday's extension of the decline signaled that no buy signal would be valid Wednesday. Wednesday's gap up to 2.85 was retraced entirely back down to Tuesday's 2.74 lows. Now a buy signal would be triggered back above 2.83.

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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