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Weak Selling Leaves Gold Open to Bigger Bounce

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These are the patterns to watch for Tuesday's gold, silver, energy, and cash moves.

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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: Gold started the week feigning further reaction down from last week's bounce high. Any delay in confirming it Tuesday would be very bullish to resume the bounce.

Dollar Basket
Jun Contract DX; (UUP), (UDN)
Despite gapping up to 80.30 at Monday's open to probe last week's highs, the balance of the session tumbled to test 79.70 support. This is a 61.8% retracement of the rally from Thursday's low, and assuming that it is the pullback's low, then back above 80.00-80.15 would launch a new rally leg.

Eurodollar
Jun Contract EC; (FXE)
Monday's gap down under prior lows held 1.3020 support instead of breaking it. The intraday reaction up held 1.3145 resistance. So long as 1.3180 is not recovered, this bounce has likely peaked, and the downleg should soon resume.

Gold
Jun Contract GC; (GLD)
Monday's gap down to 1648.00 reacted up to 1661.00, before fresh lows tested 1642.00. Despite the volatility and the lower and lower lows, the session closed while still trying to recover several dollars back above 1648.00. Gapping up Tuesday above 1661.00 is possible, and would be likely to resume the rally next targeting 1688.00. Otherwise, a second consecutive lower close under 1657.00 would confirm last week's corrective bounce had ended.

Silver
May Contract SI; (SLV)
Friday's low was tested throughout Monday afternoon once the firmer open was retraced. But the retracement stopped short of probing fresh lows. And 31.45 support was still being tested throughout, instead of its break triggering a sell signal. It's not a buy signal, but the price action does keep the door open to another bounce.

30-Year Treasury
Jun Contract US; (TLT)
Only slightly higher highs accompanied falling stocks Monday. That wasn't much of a "flight-to-safety." In fact, stocks bounced back into positive territory, and the long bond ended the session still testing the 141-27 prior high. Now closing under 141-06 would trigger a downleg targeting 139-08. There is otherwise no buy signal.

Crude Oil
May Contract CL; (USO)
Monday's early $1.50 dip followed Friday's close above 102.25, suggesting that sellers had not regained control. So does the dip's complete recovery to close positive on the day. Back above 103.00-103.25 would target 104.70.

Natural Gas
May Contract NG; (UNG)
Ranging $0.02 either way around 2.00 Monday does help to form a bottoming pattern. There remains no unfinished business below. Any higher would target 2.07, whose recovery would target 2.17. There is not otherwise a sells 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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