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Be Careful With 'Ineffectual Optimism' in Gold

Rod David

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 fresh high Tuesday quickly peaked, but only to range sideways through the day. Is it a resumption of last week's string of gaps up, or a last gasp before reversing back down?

[More from Minyanville.com: Is Silver Facing a Breakout or a Final Bottom? ]

Dollar Basket
Jun Contract DX; (UUP), (UDN)
The 82.60 low in reaction to Ben Bernanke's speech was all but retested Tuesday. Back above 83.00 and 83.33 would signal momentum reversing back up.

[More from Minyanville.com: Currency Market: US Dollar Index Volatility Continues ]

Jun Contract EC; (FXE)
Last week's temporary surge on Bernanke's speech to 1.3212 was never attacked intraday, not until Tuesday's gap up above 1.3100 extended to test 1.3165. Back under 1.3180 after testing 1.3212 - if 1.3212 were retested - would signal momentum reversing back down.

Aug Contract GC; (GLD)
Tuesday's probe of fresh highs above 1288.00 and 1293.00 reacted back down twice to attack 1285.00 whose break would signal that buyers were absorbed. The session's "ineffectual optimism" essentially requires that break to develop Wednesday, or else a bigger rally leg would be underway.

[More from Minyanville.com: Yet Another Short Trade Setup for Silver and Gold? ]

Sep Contract SI; (SLV)
Tuesday's test of 20.00 held as resistance. Back under 19.55 would be likely to extend down at an accelerated pace, potentially targeting fresh lows.

30-year Treasury
Sep Contract US; (TLT)
Tuesday's retest of 135-00 could extend to 135-16 before suggesting that a detour was underway, with potential up to 137-00 before finally filling the gap back down to last Wednesday's 132-24 close.

Crude Oil
Aug Contract CL; (USO)
Monday's recovery back up to 106.35 resistance extended higher momentarily Tuesday before reversing back under 106.35. A deeper corrective dip to 103.30 would still be preferable to launch a more reliable rally leg targeting 110.65-110.75.

Natural Gas
Aug Contract CL; (UNG), (UNL)
The violent rejection of Monday's dip into 3.55-3.60 support tried extending higher Tuesday, but still failed to recover the 3.73 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.

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