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Gold Up, Long Bond Down as Weekend Illiquidity Reveals Weaknesses

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Daily commodity spot: A breakdown of the day's highest-profile commodity futures.

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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 The long bond had been eking higher for a couple of session, but not really extending or reacting down. Friday's slightly higher high was no exception. Then the weekend's illiquidity started getting exponentially closer, helping to trigger a one-point dive. Has its corrective bounce ended?

Dollar Basket
Jun Contract DX; (UUP), (UDN)
Thursday's "ineffectual optimism" paid quite a price Friday by gapping down to new lows at 78.87. The entire session developed in negative territory, under prior lows. Unless 79.25 were recovered Monday, the drop could extend to 78.50 before bottoming.

Eurodollar
Jun Contract EC; (FXE)
Friday's reaction to Thursday's "ineffectual pessimism" was a gap up to probe prior highs up to 1.3383. The session essentially ranged around the 1.3350 prior high, developing exclusively in positive territory, almost qualifying as "ineffectual optimism." But a bearish resolution depends upon quickly breaking back under 1.3294 at Monday's open, or else the rally would next target 1.3425.

Gold
Jun Contract GC; (GLD)
Thursday's closing test of 1657.50 extended overnight above its 1661.00 confirmation so much that Friday's opening gap up quickly tested 1672.00. A pullback to 1661.00 was recovered to retest 1672.00. The rally could extend to 1688.50 so long as pullbacks now hold 1666.00.

Silver
May Contract SI; (SLV)
The likely bounce to 32.50 was resolved immediately at Friday's gap up that also tested 32.62. An intraday dip recovered to retest 32.50. Potential to 32.70 remains alive so long as pullbacks now hold 32.30 as support.

30-Year Treasury
Jun Contract US; (TLT)
Friday's open firmed to 139-05, which was consolidated through the noon hour back to 138-26. Then a steep reaction down triggered the 137-28 sell signal. So long as 138-08 is not recovered, the break is targeting at least 136-12, whose break would target 135-26 and 134-28 and lower.

Crude Oil
May Contract CL; (USO)
Friday's bounce into 104.35 resistance reacted down sharply to 102.90 support. That was barely positive territory, but almost any immediate strength Monday would be credible for extending higher. Otherwise, any immediate weakness probably needs to be a gap down in order to launch a new downleg.

Natural Gas
May Contract NG; (UNG)
Thursday's plunge extended to new lows testing 2.10 Friday. This is a market that tends to duplicate Friday's price action on Monday mornings, making fresh lows likely.

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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