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The Calm Is Over, as Futures Volatility Picks Up


Gold was among the most volatile of the liquid 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 narrow ranging suggested a "calm before the storm." It began pouring overnight, and Friday's open was full of thunder and lightning. Gold was among the most volatile, retesting the decline's original target, after probing new lows overnight.

Dollar Basket
Jun Contract DX; (UUP), (UDN)
Friday's morning and afternoon highs tested and retested Wednesday's 80.41 high, after having probed it slightly overnight. The trend remains up so long as 80.10 were to hold as support.

Jun Contract EC; (FXE)
Thursday's narrow ranging had confirmed the decline remained intact. Friday's gap down and then a retest of session lows both stopped short of touching Wednesday's 1.2910 prior low, despite having probed it overnight. The decline's momentum remains intact so long as 1.2980 is not recovered.

Jun Contract GC; (GLD)
There was no bigger bounce, after all, before trying to resume the decline. Thursday's night's new low at 1572.00 was recovered enough to limit Friday's gap down to retesting the decline's original 1584.00 target. That's where regular trading closed, which suggests that sellers have lost traction. The 1572.00 should still be tested intraday - probably down to 1568.00 - and its recovery back above 1584.00 would then form a durable bottom.

Jun Contract SI; (SLV)
Without first extending Wednesday and Thursday's bounce, new lows Friday tested 28.40 before recovering up to 29.05. Now avoiding a close under 28.70 would help to form a bottom, and the attraction back up to 30.00 could be the catalyst for a larger recovery attempt.

30-year Treasury
Jun Contract US; (TLT)
The requirement to retest Wednesday's 145-03 opening gap up was fulfilled overnight before Friday's open. It was retested into the close following an intraday dip. There is no new signal, and no unfinished business above.

Crude Oil
Jun Contract CL; (USO)
Friday's gap down was recovered entirely, but not permanently, as the afternoon slid back toward the morning's low. Regardless, a recovery from the drop's 95.50 target may have been delayed too long not to resume the decline to 91.75.

Natural Gas
Jun Contract NG; (UNG), (UNL)
Friday's shallower bounce did hold the adjusted 2.45 pullback limit. But the rally's 2.50 target held as resistance. A close above 2.50 is needed to signal the rally extending, instead of preparing for a larger corrective dip.

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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