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Does Gold's Volatility at the Lows Suggest a Low Is Forming?


Take a look at the intraday action in commodities.

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: Does gold's volatility at the lows suggest a low is forming? In this case, down is up. That is to say, it is potentially more bullish that Friday's open reacted down from Thursday's bounce. Now, starting the new week with another blip-down should signal that sellers have been absorbed.

Dollar Basket
Friday's gap up to fresh highs at 80.37 was retraced quickly back down into negative territory. The balance of the session ranged sideways around unchanged. A close beyond either end of Friday's 80.00-80.37 range is likely to trend in that direction.

Dec Contract EC; (NYSEARCA:FXE)
The first trending attempt from consolidating narrowly for three days was unlikely to gain traction. Friday's gap down to 1.2900 was retraced entirely back up into positive territory to test 1.2955. Closing under 1.2900 would signal a bigger downleg underway.

Dec Contract GC; (NYSEARCA:GLD)
Friday's gap down to 1701.50 stopped just short of filling the gap back to Wednesday's 1701.00 close, but the upper-end of its structure was tested. And that was enough apparently to launch a probe above Thursday's highs to test 1720.00. A close above 1717.00 was avoided again to prevent putting into play 1727.00, or invalidating the attraction down to 1701.00.

Dec Contract SI; (NYSEARCA:SLV)
Thursday's opening test of 32.00 didn't extend higher, and neither did Friday's, so there is no assurance of extending further to also test 33.00.

30-year Treasury
Dec Contract US; (NYSEARCA:TLT)
Friday's open gaped up above Thursday's high and extended back up to the 148-00 corrective bounce target that had already held a test Tuesday. Its recovery would target 149-12. Otherwise, closing under 147-10 would target a retest of Thursday's 146-05 low, and its break down to 145-05.

Crude Oil
Dec Contract CL; (NYSEARCA:USO)
Ranging sideways Friday for a fourth consecutive session under the decline's 87.00 target instead of rallying still keeps alive the drop's momentum, but does not preclude there being a false break higher first.

Natural Gas
Thursday's test of 3.80 resistance reacted down only enough to retest the week's lows, which keeps alive the potential for its eventual recovery to trigger a new rally leg.

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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