Crude Oil: Any Hesitation Would Halt Current Rally


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.

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Today's Highlight: Crude oil's gap up extended higher Thursday, attacking its minimum target and confirming the breakout. Meanwhile, gold has reached a make-or-break point.

Dollar Basket
Jun Contract DX; (UUP), (UDN)
The potential down to 82.15 remained alive since bounces were holding 83.40 resistance. Thursday's plunge through it to test 81.10 was overkill. Closing back above 81.65 would rob the decline of its traction. Closing above 82.00 would reverse momentum up.

Jun Contract EC; (FXE)
The likelihood of at least probing a fresh high became a record-setting one-day surge that nearly tested the 1.3333 resistance created by the prior rally. Closing back under 1.3175 would rob the rally of its traction. Closing under 1.3110 would reverse momentum down.

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Aug Contract GC; (GLD)
Thursday's post-open dip held 1393.50 before reversing up sharply to test the 1421.60 prior overnight high. Reversing back under 1410.00 would invalidate the rally and begin a decline targeting well under 1390.00. Not reversing down would next target 1460.00 above. Regardless, the ranging should resolve without further delay.

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Jul Contract SI; (SLV)
Thursday's gap up was reversed into negative territory where testing 22.35 support launched a rally to fresh highs above 22.80.

30-year Treasury
Sep Contract US; (TLT)
Another flight-to-quality helped the bottoming pattern to extend up sharply through 141-12 to 142-15. That filled a two-week-old gap while testing higher prior lows, both of which held as resistance through the close back under 141-06. Not recovering Thursday's late dip immediately Friday in reaction to the Employment Situation report would target a retest of the recent 139-16 and 139-04 lows. Extending higher would target 144-06 and 144-16.

Crude Oil
Jul Contract CL; (USO)
The pattern's warning shots finally landed a direct hit Thursday with a morning-long rally to fresh highs that tested 95.30. The 96.00 minimum target is only likelier to be met, and probably exceeded to 98.10, so long as 94.25 now holds as support.

Natural Gas
Jul Contract NG; (UNG), (UNL)
The ongoing inability to trigger a buy signal above 4.01 or 4.11 was resolved by Thursday's disastrous dive to 3.83. Having originated from an extended narrowing range, the break has potential to be "false" - reversed up back into the range and above it more substantially than the current break lower. The first step to establishing that potential would be to avoid a second consecutive lower close Friday.
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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