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Gold's Big Break Thursday May Have Opened the Door to Retesting Lows


Take a look at today's action in currencies and commodities.

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: Crude oil rejected Wednesday's late drop by gapping up, but didn't extend higher intraday. Gold rejected last week's rally, but didn't extend down intraday.

Dollar Basket
Ranging between 79.85-80.20 Thursday offered no predictive value.

Mar Contract EC; (NYSEARCA:FXE)
Thursday's gap up extended higher intraday to test the range's 1.3380 upper-end. Despite probing above it, this doesn't stretch the rubber band any more so than did Wednesday's test of 1.3260 support. Fresh highs at 1.3465-1.3475 would be sufficient for any hesitation to then trigger a snap back down to and through prior lows.

Feb Contract GC; (NYSEARCA:GLD)
Ongoing testing of 1685.00 support had already become a concern for not extending the rally. Its break Thursday down to 1664.00 consolidated under 1675.00, for which there is no bullish reason to be revisiting at this stage of the pattern. A bounce has room up to 1682.00-1683.00 before suggesting that Thursday's drop was an anomaly. Otherwise, the outstanding 1637.40 open below is likely to be retested next.

Mar Contract SI; (NYSEARCA:SLV)
Thursday's hesitation to touch the 32.50 target just pennies above prevented the rally from gaining new traction, and didn't prevent a drop back down to 31.65 critical support. Closing any lower would trigger a deeper correction targeting 30.25-30.50.

30-year Treasury
Mar Contract US; (NYSEARCA:TLT)
Two days of topping around 146-00-146-04 tried for a third when Thursday's open gapped up. But reaction down from 146-15 tested 145-09 and recovered back above the 145-16 pullback limit. The next leg down is underway so long as 146-00-146-04 isn't recovered.

Crude Oil
Mar Contract CL; (NYSEARCA:USO)
Wednesday's late dive under the 95.70 pullback limit was rejected by Thursday's gap up above 95.90. Closing above the open's 96.40 would have confirmed that a somewhat straight shot up to 99.00 is underway. But the close was still testing 95.90. Back above 96.40 would still be bullish, but there is no lower buy signal.

Natural Gas
Extended narrow ranging at resistance finally gave way for a pullback to test 3.44. Extending under 3.37 should also visit 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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