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Is Natural Gas Finally Ready to Rally?

Rod David

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: Natural gas exploded upward in reaction to Thursday's EIA report. It had already gapped up from Wednesday's uncredible dip. Ongoing accumulation should now be trending.

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Dollar Basket
Jun Contract DX; (UUP), (UDN)
Ranging around 83.00 doesn't equate to recovering, which would signal an upleg underway if confirmed above 83.33.

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Jun Contract EC; (FXE)
Thursday's gap down didn't extend much further before ranging sideways through the day. But not testing 1.3145 resistance suggests the drop back to 1.3020 remains intact.

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Aug Contract GC; (GLD)
Thursday's narrow ranging was resisted by 1285.00, preventing buyers from gaining traction. But the resistance test should have been rejected more forcibly intraday if Wednesday's drop was reversing the trend down and not just correcting the rally. Not extending down sharply overnight would suggest Wednesday's drop had been absorbed.

Sep Contract SI; (SLV)
Sideways ranging Thursday has probably only delayed the pattern eventually extending down to test 18.88 and then potentially fresh lows.

30-year Treasury
Sep Contract US; (TLT)
A retest of 135-16 resistance did reverse back under 135-00, signaling the bounce had ended. A second consecutive lower close Friday would confirm filling the gap back down to 132-14 is in-play.

Crude Oil
Aug Contract CL; (USO)
Thursday's gap up through 106.35 resistance extended to fresh highs. A second consecutive higher close would confirm the 110.65-110.75 target is in-play.

Natural Gas
Aug Contract CL; (UNG), (UNL)
Gapping up Thursday was extended sharply higher on the EIA report, triggering the 3.73 buy signal in-time to still consider recent dips in to the 3.55-3.60 range as accumulation. A second consecutive higher close would confirm 4.10 is in-play.
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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