Did Extra Day of Selling Gold and Crude Trap More Shorts?

By Rod David  AUG 30, 2012 3:40 PM

Crude oil needs to quickly prove that its recent weakness has ended, or else it may extend into and out of the weekend.


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: Corrections extended for an extra day Thursday, without yet signaling trend reversals. Perhaps the most attractive situation is gold, which retested its pullback limit that had also held Wednesday. Meanwhile, crude oil needs to prove quickly that its recent weakness has ended, or else it may extend into and out of the weekend.

Dollar Basket
Sep Contract DX; (UUP), (UDN)
Wednesday’s bounce had stopped pessimistically short of filling the gap back up to Monday’s 81.70 close. Thursday’s surge up to 81.78 compensated for the delay. Only resistance at 81.90 remains to prevent a bigger rally targeting 82.50.

Sep Contract EC; (FXE)
Wednesday’s dip had stopped optimistically short of filling the gap back down to Monday’s 1.2500 close. Thursday’s drop down to 1.2488 compensated for the delay. Only support at 1.2425 remains to prevent a bigger drop targeting 1.2350.

Dec Contract GC; (GLD)
Wednesday’s test of the 1656.50 pullback limit did not recover high enough to reverse momentum up. Thursday quickly dipped to retest the pullback limit, where the balance of the session ranged narrowly. Still need to close above 1672.50 to put into play 1700.00 and 1744.00.

Sep Contract SI; (SLV)
Wednesday’s shallow dip failed to recover above 31.00 before Thursday’s deeper dip tested 30.00-30.35 support. The pattern still must recover 31.00 to trigger higher highs targeting 33.00.

30-year Treasury
Sep Contract US; (TLT)
Recent ranging around 149-00 broke higher Thursday up to 149-27. Now back under 149-08 would signal the bounce had ended, and under 148-24 would signal momentum reversing down.

Crude Oil
Oct Contract CL; (USO)
Thursday’s probe of fresh lows down to 93.95 closed while testing Monday’s 94.41 low. Now just recovering 95.15 would start to gain traction for also recovering 96.15 and 97.00.

Natural Gas
Oct Contract NG; (UNG), (UNL)
The 2.72-2.74 resistance was still being tested at Thursday’s close. Now 2.78-2.82 resistance must be recovered to put into play 2.90, and potentially also 3.08.

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.
No positions in stocks mentioned.

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