Gold: When Gapping Up Is a Bad Thing

By Rod David  MAR 05, 2013 3:50 PM

The gap up fizzled throughout the day as gold again signaled its intent to probe new lows.

 


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: Gold’s failed opening surge Tuesday all but confirms that the pattern requires fresh lows before any rally would be credible.

Dollar Basket
Mar Contract DX; (NYSEARCA:UUP), (NYSEARCA:UDN)
Tuesday’s gap down held 82.05 as support intraday, which had been probed overnight. The opportunity to form an island reversal is no longer possible. But a test of 82.37 that reverses back down under 82.25 could trigger a steep downleg.

Eurodollar
Mar Contract EC; (NYSEARCA:FXE)
Tuesday’s narrowly ranging day did not trigger a signal. Back above 1.3105-1.3113 would signal momentum reversing up and potentially targeting 1.3185 and 1.3300.

Gold
Apr Contract GC; (NYSEARCA:GLD)
Tuesday’s pre-open test of 1584.00 was reversed back down to 1571.00, testing 1575.00 into the close. The pattern through Monday’s close had already made new lows likely. The reversal through Tuesday’s close reinforces that likelihood.

Silver
Mar Contract SI; (NYSEARCA:SLV)
Tuesday’s open above 29.00 was retraced almost entirely back to Monday’s 28.50 close, still testing 28.65 at the close. A fresh low remains likely, so long as 28.65 continues holding as resistance.

30-year Treasury
Mar Contract US; (NYSEARCA:TLT)
Tuesday’s open gapped down from testing 144-22 resistance to 143-20, which was last week’s sell signal. Its retest held again, but now 143-30 must be recovered to avoid any lower low from gaining traction.

Crude Oil
Apr Contract CL; (NYSEARCA:USO)
Firming throughout Tuesday to test 90.75 resistance enables a recovery Wednesday to gain traction above 91.45, but it must be in-play at the open to be credible.

Natural Gas
Mar Contract NG; (NYSEARCA:UNG), (NYSEARCA:UNL)
A gap up to fresh highs Tuesday probed above last week’s 3.55 high to attack 3.60. Back under 3.55 and 3.52 would signal momentum reversing down, but there is otherwise potential for extending higher.

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.