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Did Gold "Jump the Shark" Wednesday?


A breakdown of the day's seven most active commodity futures.

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: Did gold "jump the shark" Wednesday? Many commodities on Wednesday retraced or contained Tuesday's year-opening moves. Except for gold, which extended higher again for a second consecutive day, uncharacteristically in the same direction as the dollar, and without bringing silver along for the ride.

Dollar Basket
March Contract DX, ETF: (UUP, UDN)
Wednesday's gap up was maintained for long enough and high enough to reject Tuesday's fresh low. The session stopped short of reversing momentum up to fill open gaps above, but the recovery would be confirmed by one more consecutive higher close Thursday.

March Contract EC, ETF: (FXE)
Wednesday's plunge confirmed that last Thursday's recovery from new lows had not gained traction, and that Friday's bounces were accidents waiting to happen. New lows are in play.

February Contract GC, ETF: (GLD)
Now this bounce is getting a little ridiculous. Already having retraced two of the downleg's bounce limits, and then its original 1610.50 sell signal, Wednesday's high tested the prior rally's 1620.00 bounce limit. Closing back under 1610.50 Thursday would have sealed a top, so gapping under it Thursday and trending down intraday - preferably to close under 1598.00 - would serve by proxy.

30-Year Treasury
March Contract US, ETF: (TLT)
Tuesday's test of 143-04 was followed by Wednesday's second consecutive lower close at 142-13. This confirms that last week's corrective bounce has ended, and that momentum has reversed down. The corrective bounce had originated upon breaking above 142-06 resistance, which is now being tested as support, so closing under it Thursday should be irrecoverable. Meanwhile, it does have potential to launch an interim corrective bounce, which should not close above 143-00.

Crude Oil
March Contract CL, ETF: (USO)
A second consecutive higher close Wednesday above Tuesday's test of the 103.00 target would have signaled a much more substantial rally underway. A much more substantial rally may be underway, but Wednesday's close did not signal it. Meanwhile, the current rally was not rejected, so there is no active signal, only the potential that a much more substantial rally may be underway.

Natural Gas
March Contract NG, ETF: (UNG)
Wednesday's close back above 3.09 lacked the fireworks that would be appropriate for a recovery in this pattern. But I'm willing to give it a benefit of the doubt for reversing momentum up, so long as Thursday's EIA report resolves up sharply.

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.
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No positions in stocks mentioned.
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