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Gold's Rally Isn't Done; Long Bond's FOMC Rally May Be Premature


Premature reaction down from resistance created a gap to fill, and no rush to fill it.

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's reaction down Wednesday from meeting the rally's target Tuesday was expected not to confirm a reversal underway. In fact, the character of Thursday's non-confirmation was itself informative. So, confirmation can be important on many levels.

Dollar Basket
Thursday's dip back to 80.25 avoided confirming Wednesday's bounce as gaining traction, leaving the door open to resuming the drop to fresh lows at 79.20.

Mar Contract EC; (NYSEARCA:FXE)
Despite gapping down, Thursday reversed back up into positive territory to 1.3725, and did not confirm Wednesday's break. Keeping in line with expectations would now also extend higher to probe last week's highs. Retracing Thursday's recovery would be bearish, since Thursday's bounce retraced 61.8% of the drop from last week's highs.

Apr Contract GC; (NYSEARCA:GLD)
Wednesday's premature overly-aggressive drop avoided extending down Thursday, while barely bouncing. The gap back to Tuesday's 1342.00 target is still likely to be filled -- sooner rather than later so long as 1328.00 holds as support -- if not also retested up to 1349.00.

Mar Contract SI; (NYSEARCA:SLV)
Subdued ranging Thursday maintained potential for a corrective bounce to precede a deeper pullback targeting 20.70.

30-year Treasury
Mar Contract US; (NYSEARCA:TLT)
Thursday's gap up extended slightly higher but mostly ranged sideways, just under 134-26/134-30 prior highs that have always required a retest. Having avoided filling the low's outstanding gap before recovering does suggest the high's retest will hold and form a more durable top.

Crude Oil
Apr Contract CL; (NYSEARCA:USO)
Still ranging narrowly without offering any compelling setups.

Natural Gas
Thursday's ranging in negative territory around 4.50 could suffice as a bottom, but a bounce has room up to 4.62-4.67 before signaling a new upleg is underway.

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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