The

Fed

leaves rates at a 40-year low, equities plummet toward new three-year extremes, and the stench of corporate malfeasance worsens.

So what happens to gold, the inflation antidote and safe haven safety valve? The August contract (GCQ2:COMEX) erased every cent of an early $4 gain on Wednesday, and then mustered only a 10-cent gain by the close. And the December contract (GCZ2:COMEX) fared even worse, closing underwater by 30 cents. So much for the appeal of the metal as an alternative investment.

Even the decline in the dollar failed to boost gold much. Usually when the buck sinks -- as it did so precipitously on Wednesday -- gold pops higher as the largely dollar-denominated metal becomes relatively cheaper for foreign currency holders. That demand-boosting transmitter didn't work either, though, as the metal's lead-like finish demonstrated.

While you can't necessarily read long-term trends in any single day's activity, it was telling that all these positive developments for gold together translated into a dime gain at best. It's a market's reaction to news that counts, and gold's reaction lacked luster.

Gold charts are looking subtly worn out as well. Look how two days ago the August contract got capped at the 78.6% retracement of its most recent swing down from the high, and left a tail at that Fib resistance. Also notice the tail's twin on June 7. Neither the June 7 nor the June 24 tail have been successfully filled -- i.e., where subsequent days have closed above the opens or closes of the tails. These are fissures that suggest gold will crack below support in the 317 area before making its first stop at 312.

Since anything can happen in the markets, plan your exit and at what point the opposite scenario becomes valid. I will jump back on the gold bull should it ride and close above 327. For December gold, which is more suitable for projecting the upside in the intermediate term, 339.9 through 340.9 appears to be formidable resistance and a level to consider fading rallies against. Beyond that there is 345.50, then 360.

The Yen

Are Japan's corporations and accounting practices cleaner and more transparent than America's? Is its economy zooming along at a better pace than ours? Has the Bank of Japan given up on its professed desire to keep the yen down to the benefit of exporters? Is the yen really 4% more valuable in just one week? I think not.

Here is another example of a market that -- although it has a great deal of upside momentum -- is overbought and has flagrant, unfilled gaps below. This remains a trading market, meaning there will be a lot of volatility (read: trading opportunity). Look for the yen to fill gaps down to 0.8150 with risk defined at 0.8430 and 0.8445.

Livestock

Patterns play out in multiple time frames. For example, August hogs (LHQ2) triggered out of a weekly pullback from a low. There continue to be expectations in this market that rising animal production will outpace the demand for pork in the months ahead.

Potentially moving in the other direction is live cattle (LCQ2). There you've got a cup-and-handle pattern and a four-bar pullback that left a tail that held at both the 50-day moving average and the 38.2% retracement of its most recent upswing, potentially formidable support.

The past few days' action has held above 63.250, an area one could also use as a risk parameter. The contract is also holding with closes above the 10-day moving average and is also a low volatility play (see my

previous article on this subject).

Marc Dupee is an independent trader and co-author of the book

The Best: Conversations With Top Traders. Dupee was formerly markets analyst and futures editor for TradingMarkets Financial Group. At time of publication, he held no positions in any securities mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. While he cannot provide investment advice or recommendations, he invites you to send your feedback to

Marc Dupee.

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