Daily Spot: Energies
A weekly summary of one complex, including daily updates of other developments elsewhere.[pay]
Crude Oil Jan (CLF) Failing to fully form a buy or sell signal tends to default to being the opposite. So it was with Monday’s bearish Pivot Reversal, which recovered in the afternoon to trigger a buy signal. Tuesday’s gap up to new highs fulfilled the signal, and the balance of the day dipped back into Monday’s range.
Closing Tuesday under Monday’s low would have triggered a sell setup. Monday’s low was probed, but it held on a closing basis. Another sell setup that failed to full form, making it another buy signal.
90.50 is my highest calculable target, and it was fulfilled by Tuesday’s opening gap up. Tuesday’s 90.65 opening gap should be retested regardless of its resolution. Fulfilling the test and closing negative under 88.40-88.70 would trigger a sell signal.
Natural Gas Jan (NGF) Monday’s gap up created unfinished business back down to Friday’s 4.33 close. Its gap is likely to be filled, at least back down to 4.36, before a credible rally can begin. It was partially filled Tuesday, as was appropriate for the pattern. A rally at Wednesday’s open would be premature, but a close above 4.48-4.51 would get a benefit of the doubt for triggering a new rally leg.
Dollar Basket Dec (DXZ) Gapping down to probe Friday’s low Tuesday quickly bottomed and bounced back into positive territory. A dip back to 79.50 would allow the recovery to refuel without sellers gaining traction. No dip is required, and the next higher bounce objective is 80.50-80.70.
Gold Feb (GCG) Gapping up Tuesday above prior highs was quickly rejected back into negative territory, turning $16 gain into $13 loss. The afternoon ranged around 1407.00 for potential to launch a retest of Tuesday’s 1427.40 opening gap, with potential also to test 1436.50. Closing under 1398.00 at any time – even without first retesting Tuesday’s high – would signal momentum reversing down, initially targeting 1381.00.
30-year Treasury Mar (USH) Monday’s “ineffectual optimism” up to 125’12 was resolved by gapping down under 124’18 Tuesday. It extended down sharply to fulfill the 123’02 target, probing it down to 122’09. Being the first day of a breakout under prior lows, a second consecutive lower close Wednesday would signal a durable downleg underway. Its initial target would be 119’14 and potentially 117’14.
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Daily Spot coverage schedule is: Currencies (Mon), Metals (Tue), Energies (Wed), Rates (Thu), Softs (Fri, coming).