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Daily Spot: Energies – If, Then… Market Timing

Daily Spot: Energies

By Rod David | May 18, 2011 - 4:22 pm

A weekly summary of one complex, including daily updates of other developments elsewhere.[pay]

Crude Oil Jun (CLM) Only bouncing, and barely that. Tuesday’s drop to fresh intraday lows at 95.02 stopped optimistically short of touching the two-week old 94.63 prior low.So, Wednesday’s gap up and extension to 100.99 is still considered to be only a corrective bounce. Back under 99.75 and 98.50 would signal and confirm a new downleg underway targeting 93.75 and 88.00.

Natural Gas Jun (NGM) There’s always time to trap shorts. Tuesday’s reaction down from Monday’s rally did not extend down to fresh lows. A probe under 4.15 that recovers through the close would trap short, completing a bigger bottom, whose recovery would target 4.50 and 4.80. Thursday’s EIA report could be the catalyst for the setup. Pessimism ahead of the report could help.

Dollar Basket Jun (DXM) Break’s over, back to work. Sellers didn’t gain any traction during Tuesday’s flat-to-lower ranging. So, lower lows Wednesday weren’t likely to gain traction either. In fact, fresh lows probing negative territory and also Monday’s lows were recovered by an afternoon surge back into positive territory. A rally Thursday morning would make clear that the consolidation off of Friday’s highs has ended.

Gold Jun (GCM) Volatility pop, becomes volatility pooped. Wednesday’s gap up extended early to 1500.00 resistance, and hovered narrowly there through the afternoon. The attraction back down to the 1-1/2 week old 1462.50 overnight low may be inhibiting a recovery. Holding the low’s retest, while Silver at least avoids a new low close, would form a more credible bottom for launching a corrective rally targeting 1557.00-1560.00.

30-year Treasury Jun (USM) Try, try again. Wednesday’s optimistic open gapped up to test 125.27, but the balance of the day trended back down to 124’20. Holding at support avoided signaling that momentum had reversed down. No breakout was confirmed, either. A higher close Thursday that tries to resume the rally would likely match the Tuesday-Wednesday pattern of failing to produce a second consecutive higher close.

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Daily Spot coverage schedule is: Currencies (Mon), Metals (Tue), Energies (Wed), Rates (Thu), Weekender (Fri).

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