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Crude Oil May Have Fallen Too Far to Get Back Up

By: Minyanville
Posted: 7/24/2013 3:17:00 PM
Referenced Stocks: FXE;GLD;SLV;UDN;UUP

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: Not extending its rally Wednesday suggests that crude oil's higher targets are invalid. Not rallying immediately Thursday would confirm.

Dollar Basket
Wednesday's rally tried to retrace all of the prior two sessions' decline, which would signal the decline had ended, but must now recover 82.75 to avoid resuming and extending the decline.

Sep Contract EC; (NYSEARCA:FXE)
Wednesday's decline tried to retrace all of the prior two sessions' rally, which would signal the rally had ended, but must now break back under 1.3145 to resume and extend the rally.

Aug Contract GC; (NYSEARCA:GLD)
Consolidating under 1335.00 Tuesday instead of above it made fresh highs likelier than a corrective dip. Although fresh highs came immediately after the close and extended considerably up to 1348.70, Wednesday immediately reversed and extended back down to 1312.70., with potential down to 1297.50 if not recovered immediately back above 1335.00.

Sep Contract SI; (NYSEARCA:SLV)
Wednesday's test of 20.00 was still being tested, and must hold Thursday in order to avoid extending down to 18.88.

30-Year Treasury
Sep Contract US; (NYSEARCA:TLT)
Wednesday's half-point gap down could not confirm Tuesday's drop from 135-16 was a momentum reversal, but extending down to test 133-16 did, suggesting 132-24 is in-play.

Crude Oil
Sep Contract CL; (NYSEARCA:USO)
Tuesday's intraday recovery had stopped short of probing above Monday afternoon's high, which would have been optimal for signaling momentum reversing up, signaled above 107.70. Wednesday exploited the vulnerability and extended down to fresh lows testing 104.80. Reversing up immediately Thursday back above 105.75 would be credible for extending higher intraday. The drop otherwise has room down to 104.25 before considering it to be a new down leg.

Natural Gas
Wedneday's initial weakness was recovered to fresh highs at 3.78, but a reversal into the afternoon fell sharply to test 3.69, again avoiding a confirming close above the 3.73 buy signal.

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 .