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Reactions to ESM Ruling Reveals the End in Sight

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Germany's ESM ruling also had an effect on precious metals.

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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: Germany's ESM ruling helped the euro to avoid a down day. Not that the alternative was bullish, either. But the effect on precious metals suggests that their recent trending is about to end.

Dollar Basket
Sep Contract DX; (UUP), (UDN)
Although Wednesday's open gapped down to extend the trend, the session only ranged narrowly sideways. The pattern tends to appear when trending is nearing its end.

Eurodollar
Sep Contract EC; (FXE)
Although Wednesday's open gapped up to extend the trend, the session only ranged narrowly sideways. The pattern tends to appear when trending is nearing its end.

Gold
Dec Contract GC; (GLD)
Wednesday's fresh high did not reach 1760.00-1770.00 before reversing down to close negative. So, despite otherwise tracking the topping pattern, there remains potential for probing a fresh high.

Silver
Sep Contract SI; (SLV)
The 32.95 pullback limit was held through Wednesday's close, although first it was probed sharply down to 32.50. The rally's potential to 35.40 remains intact so long as 32.95 holds any test as support.

30-year Treasury
Dec Contract US; (TLT)
Despite Tuesday's sideways ranging, which undermined the drop's momentum, Wednesday gapped down to fresh lows. The overall direction is certainly within the context of a much bigger, bearish pattern. But the origin of Wednesday's drop and the gap left outstanding to Tuesday's close makes the pattern only more vulnerable to a corrective bounce.

Crude Oil
Oct Contract CL; (USO)
Tuesday's testing of 97.00 was not breakout quality. So, despite trying to extend higher Wednesday, the session weakened to close lower.

Natural Gas
Oct Contract NG; (UNG), (UNL)
The recovery extended for a third consecutive session to come within $.01 of its 3.08 target. Closing above it Thursday would extend the pattern's target to 3.20.

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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