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War Drums Have Commodities Scared

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: War drums put market participants on the defensive for gold, crude oil, and bonds. Interestingly, the dollar did not participate.

[More from Minyanville.com: Currency Market: US Dollar Index Failed on Another Test ]

Dollar Basket
Sep Contract DX; (UUP), (UDN)
Tuesday's momentary blip up was reversed into negative territory that essentially ranged around 81.45. Its previous recovery has yet to be confirmed for launching a new rally leg.

[More from Minyanville.com: Rate and Currency Charts Are Sending Mixed Messages ]

Sep Contract EC; (FXE)
Big overnight moves in gold, crude oil and bonds were not accompanied by any more euro weakness than to attack last week's lows at the 1.3333 support. That suggested the euro was weaker from peer pressure, more than from a bearish downleg developing. In fact, the drop recovered back into positive territory, suggesting a bigger rally leg is developing

[More from Minyanville.com: Gold Spiked Up Over the Weekend ]

Oct Contract GC; (GLD)
Sunday night's attack on 1410.00 was a warning shot across the bow. Monday night's rally was a direct hit, extending higher intraday to also attack 1424.00. The rally's momentum is undermined back under 1408.50, and momentum reverses back down under 1403.50. Otherwise, a second consecutive higher close Wednesday would put into play targets up to 1475.00.

Sep Contract SI; (SLV)
Tuesday's gap up above Monday's 24.45 high essentially ranged narrowly sideways up to 24.70. Extending any higher would next target 25.35.

30-year Treasury
Sep Contract US; (TLT)
The war environment's flight-to-safety enabled 132-10 resistance to break higher Tuesday. The outstanding fresh low close as yet required by the pattern may be delayed. Meanwhile, there was no accumulative pattern at the low to put into play a higher target, although the next opportunity for peaking would likely come after touching 133-28.

Crude Oil
Oct Contract CL; (USO)
Monday night's rally through the 106.50 buy signal did what Sunday night's gap up only threatened. The corrective pattern was going to be difficult to complete amid war headlines, anyway. Lacking a base could limit the interim rally to only testing 110.65 before resuming the decline.

Natural Gas
Sep Contract NG; (UNG), (UNL)
Still paying the price for its "ineffectual optimism," Tuesday's open gapped down to "lower prior highs" before bouncing back into positive territory While the rally could resume and extend without delay or hesitation, the setup is not optimal without first absorbing a deeper intraday dip.
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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