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Gold Is Wasting Time Trying to Bottom So High


Today the yellow metal bounced within $2 of its long-standing target.

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 bounced Tuesday within $2 of its long-standing target. This impatience reflects optimism, which helps to confirm that the target will need to be probed considerably to form a bottom.

Dollar Basket
Monday's high was not retested Tuesday, which suggests that the bounce's momentum has peaked. In fact, the reaction down to 80.05 fell as far as possible without launching a new downleg. Any lower would likely gain traction, but a sideways range could meanwhile develop.

Mar Contract EC; (NYSEARCA:FXE)
Tuesday's probe above Monday's high tested the bounce's 1.3465-1.3475 bounce limit, but essentially ranged around Monday morning's high.While the bounce has probably ended, there is not yet any signal that momentum is about to reverse back down.

Apr Contract GC; (NYSEARCA:GLD)
Attacking the 1637.40 target to within $2 Tuesday launched a bounce back to the 1653.00-1654.00 bounce limit. The impatience reflects optimism that confirms the target's test won't be the low. It could still be the beginning of a bottom, but it must first be tested.

Mar Contract SI; (NYSEARCA:SLV)
Tuesday's low stopped short of the decline's 30.25 target before bouncing back into Monday's range. The drop should still extend, so long as 31.05 holds as resistance.

30-year Treasury
Mar Contract US; (NYSEARCA:TLT)
Monday's delay in resuming the decline did not necessarily default to a bigger corrective bounce being underway. Tuesday's gap down also delayed resuming the decline by narrowly avoiding a test of 143-04. Breaking any lower, or back above 144-00, should extend in that direction.

Crude Oil
Mar Contract CL; (NYSEARCA:USO)
Tuesday's gap up above 97.00 extended to test 97.80, which suggests a quick test of the 99.00 target is underway. Back under 96.60-96.75 would signal the rally effort had failed and that momentum was reversing down.

Natural Gas
Tuesday's initial firming to 3.30 reacted down to test 3.25 support. Nothing short of a fresh high - preferably above 3.33 - would still signal a new upleg underway. Any further delay past Wednesday's open would all but require trending down to new lows.

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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