Are Precious Metals Too Dear?

By Rod David  OCT 12, 2012 3:55 PM

Take a look at the intraday action in commodities.

 


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: Precious metals like gold and silver already had plenty of opportunity to resume their rallies by Thursday, unless deeper corrective dips were in store. Friday’s action suggests those deeper dips are ready.

Dollar Basket
Dec Contract DX; (NYSEARCA:UUP), (NYSEARCA:UDN)
Wednesday night’s failed rally that reversed down into Thursday was then extended down further into Friday’s open. Despite extending down initially, the Thursday’s lows were recovered. Now a recovery above 79.90 would target 80.55 and 81.00, but there is otherwise no signal.

Eurodollar
Dec Contract EC; (NYSEARCA:FXE)
Fresh highs that overnight extended to 1.300 were nevertheless retraced back into Thursday’s range down to 1.2945, settling within the 1.2950-1.2975 bounce limit. Potential for extending up to 1.3100 may have been lost.

Gold
Dec Contract GC; (NYSEARCA:GLD)
Thursday’s probing above 1770.00 resistance was not impressive and did not negate the potential for resuming the corrective drop targeting 1727.00 and 1717.00. Friday’s drop back under 1760.00 suggests that this move is underway, which would be confirmed by a second consecutive lower close Monday ­ although, this market tends to fulfill its objective the same day or next day as they are triggered.

Silver
Dec Contract SI; (NYSEARCA:SLV)
Thursday’s narrow ranging around the week’s ~34.15 prior highs did not negate the potential for extending the correction down to 33.00.

30-year Treasury
Dec Contract US; (NYSEARCA:TLT)
Closing so far above 149-00 during Thursday’s choppy ranging made a test of 149-16/149-24 likely. Friday’s rally extended momentarily up to 150-07 before reacting back down to 149-16. Any negative close on Monday would trigger at least a corrective dip targeting 148-16.

Crude Oil
Nov Contract CL; (NYSEARCA:USO)
The 93.00 resistance test still has not resolved up, but Friday’s reaction down once again held the 91.20 pullback limit instead of breaking lower. An early aggressive rallying would still be credible for extending to 100.00.

Natural Gas
Nov Contract NG; (NYSEARCA:UNG), (NYSEARCA:UNL)
Friday’s narrow ranging around the rally’s 3.58 target that was met Thursday ­ instead of rejecting it ­ maintains potential for extending higher to the next higher target at 3.75.

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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