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Daily Spotlight: Gold – If, Then… Market Timing

Daily Spotlight: Gold

By Rod David | September 14, 2010 - 4:37 pm

A weekly summary of one complex, including daily updates of other developments elsewhere.

[pay]Gold Dec (GCZ) Gold’s uptrend remained intact so long as two consecutive sizable drops were avoided. Alternatively, a big intraday probe of new highs could signal the trend ending, if the probe were reversed by the close or the following day.

Two recent sizable intraday drops (circled red) found support upon testing 1239.00. A lower close would have signaled momentum reversing down. Instead, Tuesday rallied sharply higher,  up nearly $30 at its intraday peak.

The failed Head & Shoulders pattern (highlighted red) projects either to a 100% swing at 1275.00 or 200% at 1293.00. Now that at least one was met intraday, a close back under 1256.50 would reject the two prior highs, and rob buyers of their traction. A close under 1239.00 would still be needed to signal momentum reversing down.

30-year Treasury Dec (USZ) Monday’s key-reversal extended higher Tuesday, leaving outstanding the gap back to Monday’s 129’16 open. Back under 131’04 would signal the downleg had resumed.

Dollar Basket Dec (DXZ)  Monday’s substantial drop extended down Tuesday to confirm that momentum had reversed down. A close back above 81.50-81.65 would signal that the downleg was correcting with a bounce, first.

Crude Oil Oct (CLV) Friday’s rejection of Thursday’s rejected rally bought the pattern time through at least Wednesday morning. Any downleg attempted before then would be suspicious.

Natural Gas Nov (NGX) Monday’s ranging around Friday’s high didn’t prevent trending up Tuesday. But it did prevent the trending from extending, knocking it down from above 4.00 to under 3.85. Recovering from the intraday probe of one more fresh low – even if still above 3.80 – would allow a more credible rally effort.

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Share your questions and comments in this blog post’s Comments section, or during the chartroom’s What’s Next morning market tour, and in the day’s end Markets on Close…

Weekly Spotlight coverage’s schedule is: Currencies (Mon), Metals (Tue), Energies (Wed), Rates (Thu), Softs (Fri, coming).

Posted in Daily Spot