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Has Gold Extended Its Decline Too Far and for Too Long?


Today's action formed the basis for a reversal setup.

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: Has the yellow metal extended its decline too far, for too long? The recent lows aren't gaining new traction. Crude oil is meanwhile trying to break out of a consolidation that has also extended for too long. Rallying in tandem would be credible.

Dollar Basket
Narrow ranging Wednesday left the pattern intact, but momentum is in need of sudden volatility to pry price loose from its range.

Jun Contract EC; (NYSEARCA:FXE)
Still in the process of decline, but the current range didn't break lower Wednesday as price only ranged narrowly.

Apr Contract GC; (NYSEARCA:GLD)
Drifting lower Wednesday attacked 1300.00, so that now recovering 1317.00 and 1323.00 would signal and confirm a rally under way targeting at least 1342.00.

May Contract SI; (NYSEARCA:SLV)
The requirement to eventually revisit 20.70 above didn't prevent Wednesday's session from extending down to fresh lows attacking 19.75 support.

30-Year Treasury
Jun Contract US; (NYSEARCA:TLT)
Wednesday's gap down to 132-22 support was discussed as having no excuse not to reverse up into negative territory. In fact, the recovery's 133-22 target was attacked to within one tick at the afternoon's high. Now holding 133-10 as support would allow the rally to extend higher to 134-06, but back under 133-04 would signal momentum reversing back down.

Crude Oil
Apr Contract CL; (NYSEARCA:USO)
Ongoing ranging defined essentially by 99.50-100.00 persisted yet another day Wednesday. Until the end, when a fresh high was probed and maintained through the close. So long as not rejected immediately, a breakout appears to be underway.

Natural Gas
Tuesday's gap up didn't extend higher Wednesday, but neither was it rejected as the session only ranged sideways. Pre-open action had suggested the lows could be retested before extending higher. Wednesday's action doesn't change that potential.

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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