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Gold Rally Requires Follow-Through on Tuesday

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.

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Today's Highlight: Gold's surge seems to confirm the ongoing pattern's elasticity, but it doesn't preclude the requirement for a second consecutive higher close to confirm.

Dollar Basket
Mar Contract DX; ( UUP), ( UDN)
Monday's gap down suggests the 79.90 pullback objective (basis Mar, 79.75 basis Dec) will be tested before a durable rally can begin. Closing above 80.50 would signal the rally had begun anyway.

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Mar Contract EC; (FXE)
Thursday and Friday's confirmed reversal signal nonetheless suggested a corrective bounce would precede the eventual downleg. Monday's gap up held 1.3775, and if not rejected immediately, then a fresh high should be tested up to 1.3833.

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Feb Contract GC; (GLD)
Monday's surge through 1240.00 and 1245.50 attacked 1252.00 before settling back at 1245.50. Closing cleanly above 1245.50 would have been preferable, but fresh highs Tuesday would help to confirm that 1260.00 and higher is in play.

Mar Contract SI; (SLV)
Only having confirmed that Thursday's plunge had gained no traction, Friday didn't yet signal momentum reversing up. That didn't prevent Monday's strong surge back above 20.00. Exceeding 20.75 would confirm a more durable move underway, but 19.95 must meanwhile hold as support.

30-year Treasury
Mar Contract US; (TLT)
Sunday night's bounce was retraced back to Thursday's lows, maintaining the sell signal that had triggered under 129-16. The objective to retest the "V" bottom down to 127-28 remains intact.

Crude Oil
Jan Contract CL; (USO)
Monday's bounce filled the gap back up to Thursday's 97.50 close, which maintains the momentum of Friday's break lower. The 94.00 area's pullback target remains in play, so long as bounces also hold 97.85 and 98.35.

Natural Gas
Jan Contract NG; (UNG), (UNL)
Sunday night's gap down first bounced from 4.25 support, which was recovered after extending lower Monday intraday. Not closing under 4.25 allows the one-day dip to suffice for a correction before resuming the rally to its 4.48-4.51 target.
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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