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Precious Metals Distribution Finally Capitulates in a Plunge

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 sudden break Tuesday wasn't so sudden. A distributive pattern has been forming since last week's peak at the corrective bounce's target.

Dollar Basket
Jun Contract DX; (UUP), (UDN)
Tuesday's recovery back up to 83.10 can't afford to hesitate in order to avoid resuming the decline.

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Jun Contract EC; (FXE)
Monday needed to be the bounce's peak to maintain the corrective bounce template. Tuesday's immediate reaction down has been too muted to confirm it is not only noise, and that momentum is actually reversing down.

Apr Contract GC; (GLD)
Tuesday's sudden $26 tumble was the break that had been likely for Monday's open - not necessarily so substantial, but every bit as sudden. Buyers never exploited the delay, keeping the door open to resuming the decline. Now that 1574.50 is being tested, bounces should hold any test of 1581.00-1583.00 to maintain potential for resolving down under 1570.00 to test 1550.00.

May Contract SI; (SLV)
The consequence to not rejecting Thursday's break under 28.33 by Friday's close could have been limited to Monday's fresh low at 27.80. But Tuesday's plunge to 27.15 only assures a recovery will be delayed by at least one more lower close.

30-year Treasury
Mar Contract US; (TLT)
Tuesday's open still didn't gap up, so the rally still didn't extend. But now that the consolidation has persisted for so many consecutive sessions, gapping up is unlikely for extending the rally to 145-14 / 145-22.

Crude Oil
Apr Contract CL; (USO)
Tuesday's dip repeated Monday's pattern, including a recovery to at least test 97.00. But the delay in resuming the rally at this stage of the pattern is only diminishing the potential for extending durably through its 99.00 target.

Natural Gas
Apr Contract NG; (UNG), (UNL)
Without immediately rejecting Monday's retest of 3.97 Tuesday, there is no greater likelihood of extending to fresh highs.
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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