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Why Gold's Last Two Sessions Undermine Its Recovery


Either this week's bounce won its fight against gold's sellers, or it has refueled a bigger downleg.

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 second consecutive gap up formed a second consecutive session whose close essentially equated to its open. No net intraday improvement undermines the rally's momentum, reflecting weak-handed impatient buyers sponsoring a temporary bounce.

Dollar Basket
Monday's shallow inside day was incapable of reversing momentum down. The trend extended up Tuesday to fresh highs attacking 85.00, next targeting 86.10 so long as pullbacks now hold 84.15 as support.

Jun Contract EC; (NYSEARCA:FXE)
Monday's shallow inside day was incapable of reversing momentum up. The trend extended down Tuesday to fresh lows attacking 1.2740-1.2750, next targeting 1.2575 so long as pullbacks now hold 1.2875 as resistance.

Aug Contract GC; (NYSEARCA:GLD)
Potential for a bigger bounce targeting 1250.00 was quickly fulfilled overnight, and Tuesday's session ranged choppily around it. The gap back to Friday's close was filled, and the rubber band has been stretched tighter without buyers yet gaining any traction for their effort.

Sep Contract SI; (NYSEARCA:SLV)
Ranging Tuesday above 19.00 was similar to an "inside day" that should still resolve down to test 18.50-18.55.

30-year Treasury
Sep Contract US; (NYSEARCA:TLT)
Monday's recovery from fresh lows had extended higher intraday, and only narrowly Tuesday around unchanged. Not immediately extending higher undermines whether momentum has actually reversed up. Not immediately extending above 133-28 Wednesday - and preferably also above 134-06 - would suggest a corrective bounce was ending, resuming the decline, next targeting 128-10/128-14.

Crude Oil
Aug Contract CL; (NYSEARCA:USO)
Monday's threat to the rally's momentum was no different Tuesday, which again pierced a fresh high. But Tuesday ended in rally mode, instead of only printing highs overnight. The pattern cannot tolerate much if any retracement, and should extend up aggressive - probably spiking - if the rally's momentum remains intact.

Natural Gas
Aug Contract CL; (NYSEARCA:UNG, UNL)
Tuesday's gap under 3.72 extended down another dime to nearly fill the gap back to Friday's close. Coming only optimistically close doesn't equate to filling the gap. Recovering from a slightly lower low Wednesday would be bullish.

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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