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Is Gold Bearish for Not Bouncing Sharply With Crude Oil?


Take a look at the intraday action in 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: Thursday's highlight was its lowlight, as crude oil gapped right back from Wednesday's gap down. Will gold follow it? If not, then another gold drop remains likely.

Dollar Basket
Thursday's 80.13 opening gap was under all prior lows, so it requires being retested. Also, testing the 79.75 target intraday and recovering to close back above 80.13 would form a bottom.

Dec Contract EC; (NYSEARCA:FXE)
Thursday's gap up to the 1.2995 prior high doesn't require a retest. But having closed above 1.2955 keeps alive the 1.3050 target.

Dec Contract GC; (NYSEARCA:GLD)
The bounce potential to 1727.00 was tested Thursday, and held, allowing a new downleg to begin. Beware of any fresh high, because extending higher would likely be at a very steep pace.

Dec Contract SI; (NYSEARCA:SLV)
The outperformance vs. gold gave its greatest display Thursday, gapping up and extending up above the 34.15 prior high. Closing back under 33.90 would start to seal a top, and prevent extending higher to 36.00.

30-year Treasury
Dec Contract US; (NYSEARCA:TLT)
Thursday's gap down reacted to Wednesday's "ineffectual optimism," but did not extend down. Perhaps worse, the gap back to Wednesday's close was filled, without extending higher, neutralizing the attraction above without putting into play any higher target. Back under 150-28 would target 150-14, and probably resume the decline.

Crude Oil
Jan Contract CL; (NYSEARCA:USO)
Rather than close under 85.75 to confirm that 82.00 was in-play, and despite closing under 86.70 Wednesday, Thursday's open gapped up to recover all of Wednesday's plunge from 87.20, ranging 87.65-88.70 intraday. That's bullish only if followed by a higher close Friday. It otherwise suggests this range will persist for several days.

Natural Gas
Wednesday's complete recovery back up to 3.70 from testing 3.62 intraday did produce a gap up Thursday. But it was reversed back down to 3.63 on the EIA report. Thursday's drop accomplished nothing that Wednesday's drop had not done already, so it is not necessarily bearish, but there is currently no signal.

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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