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Bonds and Gold Acting Out Ahead of Friday's Nonfarm Payroll Report


The long bond has been pessimistic, while gold is behaving a little optimistically.

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 has been bubbling early, only to be rejected later. This is while the long bond has protracted its pullback. All leading up to Friday's employment situation report.

Dollar Basket
BOE and ECB announcements triggered a spike back down to Tuesday morning's brief low. That must not be exceeded to maintain potential for launching a recovery and new rally leg.

Mar Contract EC; (NYSEARCA:FXE)
A surge followed Thursday's BOE and ECB unchanged policy decisions. The 1.3580-1.3600 bounce limit was tested. That's the peak of a corrective bounce that would begin without extending back into prior highs.

Apr Contract GC; (NYSEARCA:GLD)
Overnight rallying was retraced through Thursday to attack Wednesday's low -- which, itself, had only attacked Tuesday's low. Both sessions rejected early optimism, and their lows stopped optimistically short of forming a bottom. Absent a close above 1266.00, the pattern remains vulnerable to reversing back to 1240.00, and lower to 1226.00.

Mar Contract SI; (NYSEARCA:SLV)
Sideways ranging Thursday did not help to confirm Wednesday's break higher. Pullbacks must hold 19.70 to avoid reversing the trend back down.

30-year Treasury
Mar Contract US; (NYSEARCA:TLT)
The pullback extended even deeper Thursday to 132-28 ahead of Friday's employment situation report. The pessimism makes an initially positive knee-jerk reaction easier, if not likelier. But a retest of the recent highs around 134-24/134-30 is still likelier to hold if tested.

Crude Oil
Mar Contract CL; (NYSEARCA:USO)
Fresh highs Thursday finally retested the 98.55 target, which sent price back down to Wednesday's 97.40 close. The filled gap neutralizes its attraction below, so closing any lower would be likely to trend down. Similarly, having neutralized the attraction above, probing any higher would be likely to extend.

Natural Gas
Despite rallying back up to 5.40 overnight, Thursday's drop back under 5.20 extended down to the 4.90-4.95 pullback limit that needed a retest. Closing under 4.85 would now signal a new downleg underway, confirmed under 4.77. There is otherwise potential to form a new buy signal.

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.
No positions in stocks mentioned.
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