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Thursday's Gold Rally Triggers a Rubber Band Setup Today


This suggests a much, much bigger move down.

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 pattern indicated Tuesday that it was preparing to trend sharply. Failing to confirm Thursday's break higher with a second consecutive higher close Friday would mean the trend's direction would be down. Friday's substantial drop would seem to confirm that.

Dollar Basket
Friday's bounce ended the day testing 83.40 as support. Its recovery would prevent the pullback from extending down to 82.15.

Jun Contract EC; (NYSEARCA:FXE)
Friday's drop held 1.2955 as support, maintaining momentum to the bounce's 1.3110 target.

Apr Contract GC; (NYSEARCA:GLD)
Despite extending Thursday's rally overnight to test 1421.00, Friday's steep drop eventually tested 1390.00 as support. Bounces should now hold 1398.50 to maintain that Thursday's rally stretched the rubber band for a much more substantial snap back down initially targeting 1350.00-1351.00, on the way to new lows under 1290.00.

May Contract SI; (NYSEARCA:SLV)
Friday's open gapped down to the 22.35 sell signal and tested 22.10 intraday. Unfinished business below at 21.80 remains in play.

30-Year Treasury
Jun Contract US; (NYSEARCA:TLT)
Probing above the corrective bounce to 142-00 stopped short of fulfilling its 142-24 potential before reversing down sharply Friday to 140-04, within a half-point of the week's 139-29 low. The afternoon's flight-to-safety triggered a bounce to 141-06 resistance.

Crude Oil
Apr Contract CL; (NYSEARCA:USO)
Friday's gap down was also biased downward, but remained within Thursday's range to form an "inside day." Sellers expended energy throughout the day, produced a new low close, but gained no traction for the effort. It's not a buy signal, but it adds instant credibility to any initial buying pressure Monday back above Friday's 93.25 high.

Natural Gas
Lower lows into the weekend testing 4.00 must be recovered back above 4.11 to begin signaling that momentum is reversing up.

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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