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Big Bounce in Gold Could Use Confirmation Wednesday


One big upday does not a new trend make.

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 (and silver) soared between Monday's close and Tuesday's open. Intraday action tried probing higher, but managed only to maintain the overnight rally. The action seems to confirm expectations that a bottom was forming, but that's not yet assured - despite the day's huge gains - without a second consecutive higher close Wednesday.

Dollar Basket
Fresh lows Tuesday confirmed Monday's breakout, now requiring there to be another lower close in this pattern. An immediate bounce would be likely to resolve down.

Dec Contract EC; (NYSEARCA:FXE)
Tuesday's fresh high went beyond the setup's minimum requirement that was fulfilled Monday, probing above the 1.3775 objective, threatening the potential objective at 1.3833.

Feb Contract GC; (NYSEARCA:GLD)
The bottoming pattern already seemed to be breaking higher after Monday's close was firming up toward 1240.00. Overnight action greeted Tuesday's open by gapping up to 1260.00, which was still being tested at the close despite being probed intraday. Closing any higher would target 1270.00.

Mar Contract SI; (NYSEARCA:SLV)
Consolidating narrowly under the gap back to 19.80 made the pattern likely to almost literally explode higher, which Tuesday's open did after rallying overnight. The next higher objective in-play is 20.75.

30-year Treasury
Dec Contract US; (NYSEARCA:TLT)
The reaction up from Friday's probe of fresh lows had recovered back up to 129-16 resistance, with room for extending up to 130-02. Tuesday's gap up tested it while also touching 130-11. No accumulative pattern preceded the bounce, so a reaction down is likely.

Crude Oil
Jan Contract CL; (NYSEARCA:USO)
The 98.35 target was met Tuesday, probed up to 98.75, whose recovery would be likely to extend sharply higher. More likely is a reaction down to the 94.00 area that consolidates this first rally leg.

Natural Gas
After testing and holding the rally's 4.25 target Monday, Tuesday's probe of fresh highs was required to extend higher in order to avoid a top. But probing a fresh high intraday was reversed down, which is also in-line with Monday's fresh high having been launched from a position of weakness. A pullback has room down to 4.13.

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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