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Gold's Big Rally Monday Helps to Entrench Its Recovery


There is lots of extra room to absorb selling pressure.

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 rally Monday has created extra room to absorb selling pressure, which should prevent selling pressure from reversing momentum back down.

Dollar Basket
Gapping up Monday was in-line with Friday's inside day having suggested a fresh low would recover. Filling the gap back to Friday's close could form a durable bottom.

Sep Contract EC; (NYSEARCA:FXE)
Friday's dip back toward 1.3333 extended down sharply by gapping down at Monday's open. The potential for extending the rally depends almost entirely on resuming it without delay.

Oct Contract GC; (NYSEARCA:GLD)
Monday's gap up essentially proved that Friday's narrow ranging was a Running Correction, which in turn proves the bullish pattern that has been developing. Pullbacks now should hold any test of 1330.50 to maintain the rally's momentum.

Sep Contract SI; (NYSEARCA:SLV)
Gapping up and extending sharply higher intraday Monday attacked the rally's 21.50 target to within almost a dime. The rally's momentum remains intact so long as 21.25 now holds as support.

30-year Treasury
Sep Contract US; (NYSEARCA:TLT)
Fresh highs Monday testing 135-00 resistance were retraced back down toward 134-00. Closing any higher could have triggered a substantial detour before fulfilling fresh lows at 131-06, but back under 133-24 would signal that move underway, confirmed under 133-10.

Crude Oil
Sep Contract CL; (NYSEARCA:USO)
Friday's surge to 106.00 resistance did find buying pressure lacking just when it was needed most, so Monday's open dipped and its intraday probe above 106.50 failed. Back above 106.50 Tuesday would be credible for extending higher, but there is otherwise more vulnerability to another morning pullback.

Natural Gas
Gapping up Monday to test Friday's high 3.32 high extended higher initially, but ultimately ranged sideways intraday. A second consecutive higher close would confirm momentum has reversed up.

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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