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Has Gold Finished Absorbing Friday's Shock to Its System?


Take a look at the precious metals and other 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: Gold's double-digit bounce Tuesday seemed impressive -- at first. But it accomplished nothing that Sunday night's rally had not done already. Is it getting ready to launch a recovery, or has it finished correcting last week's drop?

Dollar Basket
Having gapped up, Tuesday's narrow ranging in positive territory formed "ineffectual optimism," but left room down to 80.20 before fresh highs at 81.05 are discounted.

Mar Contract EC; (NYSEARCA:FXE)
Fresh highs overnight testing 1.3145 reversed all of Monday's gain from Friday's close, and 61.8% of the gain from Monday morning's low. The rally can resume to test 1.3180 so long as 1.3050 holds as support.

Feb Contract GC; (NYSEARCA:GLD)
Tuesday's gap up to 1652.00 extended higher intraday to attack Sunday night's 1662.70 high. Closing above 1666.00 would make the decline more difficult to resume, which is meanwhile the likelier scenario.

Mar Contract SI; (NYSEARCA:SLV)
Gapping up Tuesday above 30.25 held up throughout the day. A second consecutive close above 30.50 would put into play 31.65. There otherwise remains risk to at least retest 29.75-29.85 support.

30-year Treasury
Mar Contract US; (NYSEARCA:TLT)
Tuesday's fresh highs should now have stretched the rubber band tightly enough for the decline to snap back into play back under 144-18. Bouncing any higher above 145-16 would suggest the decline was not going to continue soon.

Crude Oil
Feb Contract CL; (NYSEARCA:USO)
Surging at Tuesday's open kept the door open to rallying, as no further delay would have been tolerable. But now the same rule can be applied to Wednesday, which should not further delay rallying.

Natural Gas
Gapping down Tuesday and extending only slightly lower did not gain traction. This is "ineffectual pessimism" and recovering 3.33 would unleash buying pressure.

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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