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The Momentum of Friday's Plunge May Delay Gold's Recovery


The yellow metal's plunge todayfulfilled all outstanding objectives -- and then it created more.

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 plunge Friday fulfilled all outstanding objectives -- and then it created more. Price potential is summarized below. More important is the lesson that Fridays are dangerous days to try to catch falling knives. The bottom is getting closer, but it's still not here.

Dollar Basket
Not extending higher Friday helps to confirm that the upper-end of a wider trading range is forming.

Mar Contract EC; (NYSEARCA:FXE)
A fresh low Thursday night was imperceptible intraday Friday, which only firmed, further suggesting that the lower-end of a wider trading range is forming.

Apr Contract GC; (NYSEARCA:GLD)
Friday's plunge of nearly $40 to probe under 1597.00 fulfills the expectations for fresh lows. Capitulation on a Friday does not form a durable bottom. So long as bounces now hold 1610.00, fresh lows are likely to test 1589.00-1592.00. Back above 1618.00 first would trigger another bounce prior to resuming the decline.

Mar Contract SI; (NYSEARCA:SLV)
Probing under the 30.25 target to at least test the 30.00 area was fulfilled Friday down to 29.71. The drop's momentum remains intact with potential down to 29.30-29.35 so long as 30.25 holds as resistance. But closing back above 30.50-30.65 would signal a new rally leg underway targeting 33.55 and higher.

30-year Treasury
Mar Contract US; (NYSEARCA:TLT)
Ranging around 143-04 Friday kept the downleg targeting 141-26 from resuming. Closing under 142-26 would confirm the downleg underway. Back above 143-18 would more likely bounce first to 145-03.

Crude Oil
Mar Contract CL; (NYSEARCA:USO)
Friday's open wasn't immediately rallying. More like trending down, gapping, and sliding through 96.60-96.75 support. By not exploiting the time that Thursday's gap up had bought, the 99.00 objective won't be reinstated until closing back above 96.75.

Natural Gas
Friday's narrow ranging did not invalidate Friday's break, but neither does it seem to be offering a confirming second consecutive lower close. That wouldn't be a bottom, nor would it preclude lower lows, but it does make a lower low attractive for long-entry.

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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