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Is Gold's Rally for Real?

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An entire session decided not to reject it, but the real test will come on higher highs.

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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: Wow, gold. Its $37 overnight surge would never have been predicted. But it does provide an excellent "teaching moment" of what can happen when trending attempts continue holding tests of a relevant level, instead of breaking it.

Dollar Basket
Dec Contract DX; (NYSEARCA:UUP), (NYSEARCA:UDN)
Wednesday night's plunge finally fulfilled the 80.05-80.10 pullback objective, and then some, probing fresh lows at 79.70-79.75. Back above 80.05-80.10 would signal a durable bottom is forming, initially attracted back up to this week's highs. But a bottom must begin forming without delay to avoid extending down into a new downleg.

Eurodollar
Dec Contract EC; (NYSEARCA:FXE)
Wednesday night's surge finally fulfilled the 1.3650 retest of recent highs up to 1.3575. Holding its test would allow a durable top to form, attracted back down to this week's lows. But a top must begin forming without delay to avoid extending up into a new upleg.

Gold
Dec Contract GC; (NYSEARCA:GLD)
Wednesday's recovery back above 1277.50 from testing 1269.00 had marginalized sellers until a bigger bounce developed. Wednesday night's $37 surge exploited that hesitation much more than could have been anticipated. Extending higher Thursday morning also filled the gap back to recent highs and tested 1321.50 resistance.

Silver
Dec Contract SI; (NYSEARCA:SLV)
Gapping up to test 22.20 Thursday was retraced to 21.70, and the balance of the session firmed back into 21-88-21.95 resistance. The recovery was premature for not yet retesting the week's low, and for the prior two sessions having filled gaps above and holding their resistance. So, a close above 21-88-21.95 is needed before considering Thursday's rally to be bullish.

30-Year Treasury
Dec Contract US; (NYSEARCA:TLT)
Wednesday's recovery from probing fresh lows extended sharply higher Wednesday night to probe fresh highs. The pattern's long outstanding minimum objective for at least one more new high close has been fulfilled, but the extended interim consolidation give higher highs more room.

Crude Oil
Oct Contract CL; (NYSEARCA:USO)
Although delayed by an extra bounce, 101.00 support was probed Thursday by gapping down from Wednesday's test of the 102.35 bounce limit. Closing back above 101.00 at this stage would be bullish, but meanwhile the 99.10 target is in play.

Natural Gas
Oct Contract NG; (NYSEARCA:UNG), (NYSEARCA:UNL)
Wednesday's reaction down from fresh highs produced a gap down Thursday. The session only ranged narrowly sideways, giving it potential to form an Island Reversal by gapping back up and extending higher Friday. Regardless, a close above 3.83 is still required to signal the rally is extending.

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.
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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