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Gold Is Testing a Major Target


But is it a bottom?

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 extra double-digit slide fell neatly into the target created by last month's low. Bouncing immediately would help to form a bottom, but it would not qualify as that bottom. Meanwhile, crude oil has been bottoming for some time and need not further delay a recovery.

Dollar Basket
Thursday's pullback was shallow, but that's all it took to avoid confirming Wednesday's break higher. This doesn't prevent another break higher Friday - it's just not required.

Dec Contract EC; (NYSEARCA:FXE)
Thursday's bounce was shallow, but that's all it took to avoid confirming Wednesday's break lower. This doesn't prevent another break lower Friday - it's just not required.

Dec Contract GC; (NYSEARCA:GLD)
Wednesday's post-close dive to 1240.20 was retested intraday Thursday down to 1235.80, fulfilling the outstanding 1240.00-1245.50 target. Thursday's 1244.00 close was testing the 1246.00 open, close enough to suggest the drop's momentum was waning. A reversal signal would be premature, but extending down immediately would make bottoming more difficult prior to extending down sharply.

Dec Contract SI; (NYSEARCA:SLV)
Thursday's 19.70 intraday low held a test of Wednesday's post-close low, recovering enough to end the day testing the open's gap around 19.90. That suggests the drop's momentum is waning, but it is far short of yet signaling momentum has reversed up.

30-year Treasury
Dec Contract US; (NYSEARCA:TLT)
Fresh lows down to 130-14 were recovered back into positive territory to at least 131-10. Closing back above 131-14 at any time would signal the drop had ended, still subject to confirmation from a second consecutive higher close.

Crude Oil
Oct Contract CL; (NYSEARCA:USO)
Early strength Thursday above 94.00 was already expected to extend higher intraday. Thursday's rally tested 95.00, needing at least one more higher close Friday to start signaling a multi-session recovery attempt underway.

Natural Gas
Fresh highs Thursday up to 3.74 were retraced back down to Monday's "lower prior highs," testing 3.67. This still raises suspicions that a durable rally is actually underway, let alone targeting 3.81. But the rally can get the benefit of the doubt so long as 3.63 holds as support.

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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No positions in stocks mentioned.
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