Daily Spot: Energies
A weekly summary of one complex, including daily updates of other developments elsewhere.[pay]
Crude Oil Nov (CLZ) The month’s ranging has been awaiting a confirming close under 81.50-81.55 (highlighted pink) to signal a downleg underway, targeting 77.75. Monday’s test stopped short. Wednesday’s test recovered into the close.
Support has been chipped away sufficiently to expect the next dip under 81.50-81.55 to gain traction and extend down sharply. Another probe under 81.50-81.55 that recovers would be bullish.
The gap back to 83.80 (circled red) does not require being filled, but it would be a likely attraction if 81.50-81.55 were to reject another break attempt.
Natural Gas Nov (NGZ) The gap back to Monday’s close (circled red) had been filled by Tuesday afternoon’s dip, reflecting patient buyers. They were rewarded by Wednesday’s opening surge to fresh highs.
The balance of the session dipped, retracing 61.8% of the recovery from Monday afternoon’s low. This is a healthy pullback that once again shows sponsorship to be patient buyers.
EIA reports on Thursday, and the restrained optimism is bullish. A new upleg would be signaled close above 3.80, initially targeting 4.00. Probing 3.80 intraday but failing to close above it would be bearish at this stage of the pattern’s recovery attempt, and a close under 3.73 could point down to new lows.
Dollar Basket Dec (DXZ) Wednesday’s session-long rally through 78.00 resistance filled the gap back to 78.45. Buyers gained no traction without closing above the gap’s 78.51 prior high. Similar to Gold, three consecutive sessions of rallying from the lower-end of the prior week’s range back to its upper-end have expended a great deal of buying energy. The pattern is vulnerable to a significant reversal if the recovery does not extend higher without delay
Gold Dec (GCZ) Wednesday’s drop back to last week’s lows did not gain new traction, and it neutralized an outstanding gap’s attraction below. A close under 1320.00 would be difficult to recover. But three days of trending down since Monday’s opening gap up, from one end of the prior week’s range back down to its lower-end, leave the pattern unusually vulnerable to a 1-2 day surge up to new relative highs targeting 1357.00.
30-year Treasury Dec (USZ) A second consecutive lower close following Tuesday’s breakout now confirms a new downleg underway. The break activates the Double Top pattern forming since August’s high. The next objective below is 128’14. An interim bounce should hold any test of 130’26.
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Daily Spot coverage schedule is: Currencies (Mon), Metals (Tue), Energies (Wed), Rates (Thu), Softs (Fri, coming).