'What FOMC Rally?' Asked Precious Metals

By Rod David  SEP 20, 2013 2:55 PM

The anti-taper's biggest beneficiaries were big losers into 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: Gold and silver had begun rallying sharply before Wednesday’s FOMC announcement. Their rallies extended sharply into the following morning. But no net improvements on Thursday made them vulnerable, and Friday reclaimed almost all of Wednesday’s gains.

Dollar Basket
Dec Contract DX; (NYSEARCA:UUP), (NYSEARCA:UDN)
Narrow ranging in slightly positive territory ended the week. No new signal is offered, but closing above Monday’s high after probing under Thursday’s low would trigger a rally.

Eurodollar
Dec Contract EC; (NYSEARCA:FXE)
Friday’s narrow ranging offered no new signals, except the “ineffectual optimism” that prevented a deeper, healthier dip that could have refueled buyers to help extend the rally.

Gold
Dec Contract GC; (NYSEARCA:GLD)
Thursday failed to extend the FOMC rally, opening the door to a correction back down to 1341.00. It was tested Friday down to 1327.20, and not recovered by the close. Recovering it immediately Monday is probably the only way to resume the rally without first testing 1321.00, whose break would target new lows.

Silver
Dec Contract SI; (NYSEARCA:SLV)
Friday’s gap down held 22.75 as resistance and extended another dollar lower, testing “lower prior highs” that had preceded the FOMC news. But for probing any lower intraday, Monday should resume the rally to avoid retesting its lows.

30-year Treasury
Dec Contract US; (NYSEARCA:TLT)
Friday morning’s test of 131-02 was resolved up to attack 132-00. A second consecutive higher close on Monday would launch a new rally leg. But closing back under 131-02 would still signal a new downleg underway.

Crude Oil
Oct Contract CL; (NYSEARCA:USO)
The reaction down from retesting 108.75 fell back under 105.00 Friday, which is too deep for a rally leg that should have been ready to extend higher This doesn’t necessarily turn the pattern bearish, but a close back above 106.75 is the minimum requirement to become bullish.

Natural Gas
Oct Contract NG; (NYSEARCA:UNG), (NYSEARCA:UNL)
Friday’s fresh low down to 3.65 did not extend down, but was not recovered back above 3.71. The pattern cannot tolerate much delay past Monday’s open to launch a new rally leg.

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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