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Gold's Big Swing Today Has Created an Interesting Setup


It may be only a corrective rally, but it should extend higher into and out of the weekend if Friday morning isn't already rejecting it.

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 absorbed another shakeout Thursday. Its recovery left little to be desired, except for leaving little on the table for Friday. It may be only a corrective rally, but it should extend higher into and out of the weekend if Friday morning isn't already rejecting it.

Dollar Basket
Thursday's gap down well under 79.85 invalidates the attraction up to 80.50. Bouncing to test 79.85 intraday does allow its recovery to reinstate the 80.50 objective.

Mar Contract EC; (NYSEARCA:FXE)
Wednesday's repeated optimism still left enough buying pressure for Thursday to gap up and test prior highs attacking 1.3395. I'm still suspicious. Back under 1.3320 would signal momentum reversing down to more thoroughly test 1.3260.

Feb Contract GC; (NYSEARCA:GLD)
Thursday's opening probe under 1675.00 to test 1666.00 was recovered and reversed well into positive territory above the 1685.00 prior highs attacking 1698.00. The 1720.00 objective is now in-play, unless 1685.00 fails to hold as support. Regardless of the interim rally, back under 1675.00 - and not higher - would signal momentum reversing down.

Mar Contract SI; (NYSEARCA:SLV)
Thursday's shallow opening pullback was reversed into positive territory to probe the 31.65 objective up to 31.93. So long as 31.65 holds as support, the next higher target is 32.50.

30-year Treasury
Mar Contract US; (NYSEARCA:TLT)
The recent bounce was likely ending if not extended immediately Thursday. The open's gap down through 145-16 and extension down to 144-28. Closing under 144-16 would confirm the trend had reversed down, but closing back above 145-16 would signal the drop had ended a correction.

Crude Oil
Feb Contract CL; (NYSEARCA:USO)
Chipping away at 94.20 resistance finally broke, gapping up and extending higher to test 96.00, putting into play 99.00 so long as Friday closes higher for a second consecutive session.

Natural Gas
Impatiently rallying to 3.37-3.44 and hesitating at its resistance did not prevent Thursday from resuming the rally to 3.53. Back under 3.35 would target 3.20-3.25.

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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