Daily Spot: Energies
A weekly summary of one complex, including daily updates of other developments elsewhere.
Crude Oil Nov (CLX) The rally’s 83.20-83.25 target was met overnight before pushing back into the open, and then retested later Wednesday. Tuesday’s gap up (circled green) came suspiciously soon after Monday’s hesitation at 82.10-82.15 resistance. Just extending higher already was optimistic. Gapping up implies excessive optimism, too.
If the target’s test is the product of excessive optimism, then it is the end of the rally that began from 75.76-77.00. The afternoon’s probe of a higher high (circled red) was rejected, which could be the rubber band snapping back to start the rally unwinding.
Unless extended higher without delay to close above 83.20-83.25, the target likely will have fulfilled the pattern’s objective. Another day or consolidation would define the trigger for at least a corrective leg down.
Natural Gas Nov (NGX) Tuesday’s inside day and Monday’s new lows (both highlighted green) were all but ignored by Wednesday’s opening surge. The surge ended early but wasn’t pushed back. It filled the gap back to Friday’s close where Monday’s high stopped a little pessimistically short.
Other gaps outstanding from the decline remain outstanding to help attract price higher. And since the break began with one or two as yet unfilled gaps, filling them would be bullish for helping buyers gain traction, and not necessarily bearish for neutralizing buying pressure.
Gold Dec (GCZ) The next higher target put into play at 1149.20 was tested overnight, and retested while RSIs diverged negatively. A dip recovered to retest the target, which was still being tested at the close. Without having rejected it forecefully, there is potential to probe it up to 1163.20. A higher close would target 1180.00.
30-year Treasury Dec (USZ) This week’s earlier resilience against a sell-off had made the pattern likely to probe fresh highs. The first of its targets at 134’27 was tested early Wednesday. The second higher target at 135’20 was attacked later. The market is anticipating QE2 and weak economic numbers, such as Wednesday’s “surprisingly” weak negative ADP report. Three more jobs reports come Thursday and Friday. A close back under 134’10 would signal momentum reversing down to resume the decline.
Dollar Basket Dec (DXZ) A second consecutive lower close confirms Tuesday’s breakout. Having entrenched themselves, bears may allow a bounce to refuel. Extending down instead would allow another bottoming pattern to try forming. Friday, or Tuesday.
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Daily Spot coverage schedule is: Currencies (Mon), Metals (Tue), Energies (Wed), Rates (Thu), Softs (Fri, coming).