Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

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

By

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

PrintPRINT
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
Mar Contract DX; (NYSEARCA:UUP), (NYSEARCA:UDN)
Not extending higher Friday helps to confirm that the upper-end of a wider trading range is forming.

Eurodollar
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.

Gold
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.

Silver
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
Mar Contract NG; (NYSEARCA:UNG), (NYSEARCA:UNL)
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.
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
PrintPRINT

Busy? Subscribe to our free newsletter!

Submit
 

WHAT'S POPULAR IN THE VILLE