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Was Gold's Bounce Today a Last Gasp for Air?


Its bearish pattern cannot tolerate closing any higher Thursday.

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: Perhaps it is only political unrest in Turkey that motivated gold's bounce Wednesday. It was left in a make-it or break-it position that must at least close sufficiently lower Thursday to maintain the bearish pattern targeting new lows. Meanwhile, crude oil has an opportunity to break higher to levels not seen in weeks or months, but its recovery can't tolerate much more delay.

Dollar Basket
Last week's 81.00 lows were probed as expected down to 80.75. Back above 81.25 would signal the trend reversing up, especially if not initiated by gapping up.

Jun Contract EC; (NYSEARCA:FXE)
Wednesday's gap down reversed up to test the 1.3333 target up to 1.3361, but 1.3333 held as resistance. Back under the morning's 1.3265 low would trigger at least a corrective dip.

Aug Contract GC; (NYSEARCA:GLD)
Despite only testing 1377.00 resistance at Tuesday's close, Wednesday probed sharply higher to test 1390.00 and 1393.50. They were both being tested through the close. Closing under 1385.00 Wednesday would have sufficed to signal the surge was absorbed. Alternatively, closing under 1377.00 Thursday would be needed for the decline's sponsorship to compensate for its delay.

Jul Contract SI; (NYSEARCA:SLV)
Wednesday's bounce filled the gap back up to 21.92 and spent the day again ranging around the decline's 21.80 target, without signaling any accumulation or buy signal.

30-Year Treasury
Sep Contract US; (NYSEARCA:TLT)
Tuesday's 139-22 high already had filled the gap back to Friday's close. Wednesday's slightly higher high chipped away at its resistance, without reacting down under support. Any higher high Thursday would be credible for extending higher, although by how much is dubious ahead of the afternoon's 30-year auction.

Crude Oil
Jul Contract CL; (NYSEARCA:USO)
96.00 resistance was probed throughout Wednesday morning. So long as 95.65 once again holds as support, extending the recovery to test 98.10 remains likely.

Natural Gas
Wednesday firmed back to Tuesday morning's highs, and to Tuesday morning's "higher prior lows," leaving outstanding a test of fresh lows under 3.70 - probably down to 3.55-3.60 - before a durable recovery could form.

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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