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Gold's Tumble Friday All but Proves That Recent Lows Require a Retest


Will Monday's pattern fulfill the attack on prior lows in gold?

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: I thought gold's surge Thursday seemed odd. It wasn't predicted, and it didn't make the prospects any less unattractive. So it's not surprising that Friday's plunge retraced it all. Now, will Monday's pattern fulfill the attack on prior lows?

Dollar Basket
The decline's next lower target at 79.65 was tested throughout Friday. The trend remains down so long as 79.85 is not recovered.

Mar Contract EC; (NYSEARCA:FXE)
Thursday's surge off of Wednesday's 1.3050 pullback limit test extended higher Friday to 1.3255, still having potential to 1.3315.

Feb Contract GC; (NYSEARCA:GLD)
Thursday's surge was still testing 1675.00 resistance so it did not gain traction. Friday's plunge back down under 1657.00 to 1653.00 suggests that the false break is being unwound and reversed. Under 1652.00 would target a retest of 1637.40, after which closing back above 1640.50 could seal a bottom. Bounces meanwhile should hold 1666.00 as resistance.

Mar Contract SI; (NYSEARCA:SLV)
Thursday's new breakout attempt was unlikely to be confirmed since Tuesday's breakout attempt was not confirmed, either. The sequence was fulfilled by Friday's plunge. At least 30.25 held as support to prevent a new downleg from beginning.

30-year Treasury
Mar Contract US; (NYSEARCA:TLT)
Thursday's drop was retested Friday, but only to react up from 144-11 to 145-16. That was the same resistance whose test launched Thursday's drop. Its reaction down must repeat without delay Monday to avoid fresh highs targeting 147-00.

Crude Oil
Feb Contract CL; (NYSEARCA:USO)
Thursday's breakout attempt to 94.70 seemed odd after Wednesday's inside day had destroyed the pattern's timing. A durable rally would be unlikely without first dipping back down to 91.25. It now seems that Thursday's breakout attempt was a false break, having dipped Friday back into the recent range's 92.75 lower end.

Natural Gas
Friday's probe back above two sets of prior lows is attacking 3.37-3.44 resistance. Its test should hold if tested without first pulling back to 3.20 for refueling.

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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