Gold, Oil Recover - Market Analysis for Dec 7th, 2006

The GLD is in the process of making a serious upside reversal off of its low earlier today at 62.00, while oil prices too have recovered impressively.... Meanwhile, the major equity market ETF's have bounced off of their lows and likely will range-trade into tomorrow's Employment Report... Let's have a look at oil prices...

Today's low in crude oil at 61.55 tested Tuesday's low at 61.53, which contained the onslaught and provided the floor for an upside pivot reversal that so far has propelled prices into positive territory at 62.45. Let's notice that to really trigger upside acceleration, oil prices need to hurdle and sustain above 62.70, which should ignite a thrust towards the prior high at 63.84 (on the way to 65).

Only a failure to hurdle 62.70 followed by a break below 61.50 will invalidate the constructive pattern.

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