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Commodities Take a Breather Today, but Will They Make Up for It Tomorrow?


Targets underway last week were left outstanding, so the question is how aggressively they'll be met.

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: Monday was a day for breathers. Gold's drop took a breather as was indicated Friday morning. Crude oil's drop took a breather by slowing its descent. Currencies took breathers by forming "inside days." If they're all going to pause together, there's no reason why they shouldn't resume together, as well.

Dollar Basket
Monday's "inside day" did not even begin to reject the decline underway through Friday afternoon. But it doesn't preclude there being an extra dip Tuesday down to the 80.30 pullback limit before resuming the rally.

Dec Contract EC; (NYSEARCA:FXE)
Monday's highs barely pierced Friday's highs enough to disqualify the session from being an "inside day." Still, a slingshot back down could be achieved by a fresh recovery high testing the 1.3600 bounce limit.

Dec Contract GC; (NYSEARCA:GLD)
The corrective bounce tested 1321.50 resistance Monday, which is enough to allow the decline to resume, although it is not yet required.

Dec Contract SI; (NYSEARCA:SLV)
Another "inside day" Monday further confirmed that a lot of selling pressure had been expended and fulfilled during the drop. But the delayed recovery now underscores how little buying interest there is. A corrective bounce is becoming less likely to interrupt the decline's resumption.

30-Year Treasury
Dec Contract US; (NYSEARCA:TLT)
Monday's bounce didn't begin to gain traction that might reverse momentum up. And the bounce still has room up to 134-12 before suggesting the drop may have lost its own momentum.

Crude Oil
Oct Contract CL; (NYSEARCA:USO)
A shallow probe of fresh lows overnight attacking 94.00 did not extend down intraday Monday. While that does create some suspicion of whether the decline's momentum remains intact, it doesn't begin to invalidate the decline's momentum, whose bounce limit wasn't even attacked.

Natural Gas
Gapping down to fresh lows Monday put into play 3.37, whose test would then require holding 3.40 to maintain the decline's momentum. Regardless, gapping down on Monday rarely produces an immediate recovery.

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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