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Gold's Drop Extended the Week-Long Correction

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 second consecutive double-digit plunge extended the week-long correction -- that is, if it's still only a correction. Not rallying into the weekend would be likely instead to extend the dive into next week.

Dollar Basket
Jun Contract DX; (UUP), (UDN)
Tuesday's test of the 84.20 target continued reacting down Wednesday to test its 83.60 pullback limit. Closing any lower would invalidate the potential for resuming the rally to 84.45.

Jun Contract EC; (FXE)
Having held a test of the decline's 1.2875 target Tuesday, Wednesday's open gapped up. The balance of the session was spent ranging sideways in positive territory, testing the prior consolidation's lows as resistance. Closing back above 1.2955 would invalidate potential for resuming the decline to 1.2745.

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Apr Contract GC; (GLD)
The decline extended down sharply Wednesday, testing the next lower objective at 1383.00 to the extreme of its noise range down to 1369.50. Having tested 1383.00, closing back above 1400.00 would signal momentum reversing up to target 1460.50. Not clearly recovering 1383.00 or breaking under it by Wednesday's close, closing under it - and under 1369.50 - would put into play new lows under 1290.00.

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May Contract SI; (SLV)
Wednesday's gap down to fresh lows testing 22.05-22.30 was recovered into positive territory. The recovery held Tuesday's 22.75-22.80 highs, still short of signaling that momentum may be reversing up.

30-year Treasury
Jun Contract US; (TLT)
Still avoiding the 143-13 sell signal by several ticks, Wednesday's open was able to test the 144-24 buy signal, and then extend above it to test 145-16. That's essentially a new relative high for the past week, requiring the recovery to extend higher without delay to be valid.

Crude Oil
Apr Contract CL; (USO)
Tuesday night's weakness stopped short of filling the gap back down to Tuesday's 93.00 open, before recovering into Wednesday's opening gap up above Tuesday's 94.40 highs to test 94.90. A post-open dip was recovered to fresh intraday highs testing 95.55. Closing above 96.00 would still be needed to trigger 98.10's target.

Natural Gas
Apr Contract NG; (UNG), (UNL)
Gapping up to the 4.05 buy signal Tuesday without extending any higher intraday had raised a warning flag. Wednesday's reaction down accelerated down through 3.95-4.00 on the EIA report. The original parameters remain valid.
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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