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Gold: Opportunity to Form a Bottom

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Capitulation on Monday could finish off sellers. A bounce first would refuel them instead.

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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: Thursday's test of "higher prior lows" needed to be the bounce's peak in order to resume the decline targeting new lows. It was. And it did. Friday's plunge set up the potential for Monday either to capitulate and end the bear market, or to refuel sellers with another futile bounce.

Dollar Basket
Jun Contract DX; (NYSEARCA:UUP), (NYSEARCA:UDN)
Friday's gap up to the 82.45-82.50 bounce limit was reversed down immediately to end the day largely unchanged, keeping alive potential for resuming the decline targeting 81.40.

Eurodollar
Jun Contract EC; (NYSEARCA:FXE)
Thursday's reaction down from testing its 1.3140 target began Friday by gapping down. The 1.3065 pullback limit was probed only briefly before recovering back to Wednesday's 1.3105 high. The rally can resume up to 1.3325 unless first closing under 1.3065, which would target at least 1.2990.

Gold
Apr Contract GC; (NYSEARCA:GLD)
Thursday's test of "higher prior lows" up to 1567.00 needed to be the bounce's peak to resume the decline targeting new lows. It was. And it did. Friday's plunge down to 1491.40 cannot be a trend low, since its gap down was under all prior lows. Even an immediate rally would need to be retraced. The pattern has no attractive parameters at this stage, with room for a bounce up to 1521.00, but much lower lows likely upon closing under 1495.50.

Silver
May Contract SI; (NYSEARCA:SLV)
The attraction back down to 27.15 proved to be an understatement as Friday's plunge fell to new lows at 26.00 and next targeting 25.75.

30-year Treasury
Mar Contract US; (NYSEARCA:TLT)
Firming in the face of Thursday's stock market rally had suggested any initial recovery attempt would extend sharply higher intraday. In fact, Friday's open gapped up above Tuesday's 146-30 lows and extended back above the original 147-14 sell signal, bringing the 148-00 bounce target within reach.

Crude Oil
Apr Contract CL; (NYSEARCA:USO)
Delaying a recovery after Thursday's drop back to 93.35-93.65 support was likely to be bearish, as proved by Friday gapping down under the 92.00 prior lows and extending lower intraday to 90.27. The afternoon's bounce tested 91.75, and back under 91.05-91.20 would resume the drop next targeting 89.25.

Natural Gas
Apr Contract NG; (NYSEARCA:UNG), (NYSEARCA:UNL)
Thursday's recovery back up to the week's 4.18 highs had formed an Ascending Triangle. Friday's gap up above 4.18 extended higher to 4.25. The breakout targeting 4.50 needs to be confirmed by a second consecutive higher close Monday to avoid dipping back down to 4.16.

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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