Day Two of QE Gets a Little Follow-Through

By Rod David  SEP 14, 2012 4:15 PM

Thursday's FOMC news extended its effect Friday.


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: Thursday’s FOMC news extended its effect Friday. Substantial resistance among the euro, rates, and crude oil were probed. Gold’s follow-through was almost a rounding error compared to its recent run, which is especially interesting if this is a function of its predictive value.

Dollar Basket
Dec Contract DX; (UUP), (UDN)
Gapped down Friday and probed fresh lows, but closed at or above the open’s gap down. May have formed an Island bottom, which would be known by gapping up Monday back above Thursday’s 79.50 prior low or 80.00 prior high. Any such rally would be temporary.

Dec Contract EC; (FXE)
Friday’s gap up retraced most of the post-open gains. Gapping down Monday under 1.2970 would form an Island of Friday’s session, but its follow-through would be only temporary.

Dec Contract GC; (GLD)
Thursday’s test of the 1760.00-1770.00 target area was still testing its upper-end at the close. The target area’s upper-end was still being tested at Friday’s close, too, after an interim test of 1780.00. Pullbacks have room down to 1760.00 without invalidating potential for extending up to 1814.00.

Dec Contract SI; (SLV)
Thursday’s surge consolidated narrowly Friday, leaving intact a rally that cannot afford any further correction on the way to its 35.40 target.

30-Year Treasury
Dec Contract US; (TLT)
The drop extended down more than 2-1/2 points Friday, probing well under last month’s 146-00 lows. Closing above 146-20 would trigger a rally targeting 148-26 and potentially 150-04/150-18. There is otherwise no active signal.

Crude Oil
Oct Contract CL; (USO)
Friday’s gap up to 99.50 increased the margin of danger for still ranging around 97.00.Overnight highs had already tested 100.40. But closing while testing 99.00 still undermines the rally from any credible or attractive buy signal. And now closing back under 99.30 would signal momentum reversing down.

Natural Gas
Oct Contract NG; (UNG), (UNL)
Recovering 3.05 would have resumed the rally. It still would. But Thursday’s close at its resistance produced a gap down Friday to range around Thursday’s 2.96 lows. It was still being tested at the close, and not rejected, but now closing above 3.01 would resume the rally, next targeting 3.25.

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.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.