Crude Oil's Behavior Suggests Its Rally Is Nearing an End

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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: The weekend had plans for crude oil, and those plans differed from the open's gap up. Its reversal into negative territory isn't a sell signal, but it suggests that a higher high will also find ready sellers.

Dollar Basket
Jun Contract DX; (NYSEARCA:UUP), (NYSEARCA:UDN)
Thursday's ranging around 83.00 resistance was not recovered Friday, requiring any rally to recover 83.33 before confirming its strength as being more than noise.

Eurodollar
Jun Contract EC; (NYSEARCA:FXE)
Friday's session was spent entirely in positive territory, holding a test of 1.3145 resistance. Just firming that much does jeopardize the decline's resumption, especially if the decline has not resumed through Monday's open.

Gold
Aug Contract GC; (NYSEARCA:GLD)
Gapping up Friday and then firming did not resume the pivot reversal setup that had formed Wednesday. While the reversal hasn't been rejected back above 1294.70, its window for extending has all but closed, leaving only a small opportunity at Monday's open (if not Sunday night) to be obvious.

Silver
Sep Contract SI; (NYSEARCA:SLV)
Friday's narrow ranging inside day did not offer any evidence of the recent drop trying to recover.

30-year Treasury
Sep Contract US; (NYSEARCA:TLT)
135-16 resistance was retested again Friday, instead of Thursday's test extending down for a second consecutive lower close. Now almost any early strength would be vulnerable to extending sharply higher, leaving only a small window for sellers to retake control.

Crude Oil
Aug Contract CL; (NYSEARCA:USO)
A second consecutive higher close was attempted Friday by extending Thursday's rally up to 109.30. But the session reversed into negative territory to 107.50. Extending higher Monday to test the rally's 110.65-110.75 target would be vulnerable to reversing down sharply.

Natural Gas
Aug Contract CL; (NYSEARCA:UNG, UNL)
Friday's gap down spent the entire session ranging narrowly sideways in negative territory without extending down. That was not bearish. But it also avoided extending Thursday's rally to a fresh high, which would have confirmed a rally underway. Monday and Tuesday could still offer a similar two-day signal, so long as 3.73 holds as support.


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 .



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Commodities

Referenced Stocks: FXE , GLD , SLV , UDN , UUP

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