Daily Spot

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Today’s Highlight Friday’s sudden, steep and substantial moves among currencies and precious metals suggests that corrections have ended and that trending is now underway. Follow-through after the weekend is difficult, so it would be that much more meaningful to extend.

Dollar Basket Mar Contract (DX, ETF: (UUP, UDN))
Friday’s higher highs continue to signal a low has formed and that momentum is reversing up, but that must be confirmed by a second consecutive higher close Monday to improve the signal’s reliability.

Eurodollar Mar Contract (EC, ETF: (FXE))
Thursday’s bounce off of 1.3580 support didn’t prevent Friday’s open from gapping down below it. That’s still one day too late to confirm Wednesday’s plunge, but now Friday’s breakout is in need of a second consecutive lower close Monday. That doesn’t happen often in this four-day sequence. Probing fresh lows intraday Monday is likely, regardless.

Gold Feb Contract (GC, ETF: (GLD))
Avoiding a new downleg required surging Friday. The open did surge through its 1248.50 buy signal and eventually probed the prior high while testing 1254.50. The nearest pullback limit is 1248.50, but there need be no pullback before extending further to the 1270.00 target.

Silver Mar Contract (SI, ETF: (SLV))
Friday morning’s rally surged through the recently filled 20.25 gap to test 20.40 resistance. So long as 20.25 holds as support, fresh highs have potential up to 20.70.

30-year Treasury Mar Contract (US, ETF: (TLT))
Friday’s opening blip-up was reversed into negative territory, but only temporarily before recovering back to fresh highs testing 131-10, and then later testing 131-16. The pattern’s minimum requirement need not be limited to only a third higher close.

Crude Oil Feb Contract (CL, ETF: (USO))
Thursday night’s rally to fresh highs attacked 25.00, which still didn’t allow a buy signal to be generated. Its immediate reaction down explained why, as the morning fell back under Thursday’s highs. But a close under 23.65 is still needed to signal that fresh lows are in-play.

Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
The tw0-day probing above 4.34 was considerable, but Friday’s rejection was not. The session did range exclusively in negative territory, dipping lower through the close.

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A daily summary of high-profile members of several complexes…[pay] View a more detailed discussion of each at the end of today’s Market Wrap.

Today’s Highlight Thursday’s volatility within recent ranges seems to be gathering momentum for substantial breaks.

Dollar Basket Mar Contract (DX, ETF: (UUP, UDN))
Thursday morning’s plunge was retraced to unchanged, but not into positive territory — let alone above Wednesday’s high. No second consecutive higher close fails to confirm Wednesday’s break. It isn’t necessarily bearish, but it could become bearish easily if higher highs are delayed further.

Eurodollar Mar Contract (EC, ETF: (FXE))
Thursday morning’s rally all the way back up to the 1.3645 sell signal was retraced entirely intraday, back down to Wednesday’s test of 1.3580 support. A second consecutive close was still needed to confirm Wednesday’s break, so not probing fresh lows into the weekend could be bullish.

Gold Feb Contract (GC, ETF: (GLD))
Overnight weakness was absorbed in time for Thursday to firm and attack the 1246.00 area, positioned to surge Friday if a new downleg is to be avoided.

Silver Mar Contract (SI, ETF: (SLV))
Thursday’s “inside day” continued hovering pessimistically short of filling the gap back up to Tuesday’s close, so extending any higher should be done very aggressively if valid.

30-year Treasury Mar Contract (US, ETF: (TLT))
Having fulfilled both 130-18 and 130-02 pullback targets the prior two days, Thursday exploited the opportunity to resume the rally. Its early attack on the 131-08 prior high hesitated pessimistically short, which can be bullish from a contrarian perspective. A third higher close remains outstanding.

Crude Oil Feb Contract (CL, ETF: (USO))
Wednesday’s rally had stretched the rubber band to its 94.65 extreme. Its overnight retest reacted down only to test 93.65, which must break lower to confir the 90.50-91.25 target area’s retest remains in-play.

Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
After two probes of the 4.34 bounce limit had failed Wednesday, there was no bearish reason to further delay resuming the decline — let alone for testing the noise range up to 4.47. But an overnight rally did force a gap up testing 4.47. Gapping up gains no traction, making it dismissible, but only if rejected immediately. Reaction to the EIA report did trigger a drop back toward 4.34. The 4.47 opening gap was retested anyway, only to be rejected again, back down to 4.34. There remains no bearish reason to further delay resuming the decline.

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A daily summary of high-profile members of several complexes…[pay] View a more detailed discussion of each at the end of today’s Market Wrap.

Today’s Highlight From the Precious Metals pullback to the Energies excessive bounces, recent trending is being put to the test, and those various tests should resolve Thursday.

Dollar Basket Mar Contract (DX, ETF: (UUP, UDN))
Gapping up Wednesday didn’t extend any higher intraday. But a second consecutive higher close Thursday would nonetheless confirm the pullback was resolving up into a new upleg.

Eurodollar Mar Contract (EC, ETF: (FXE))
Sliding overnight greeted Wednesday’s open already in decline under the 1.3645 sell signal. A second consecutive lower close Thursday would confirm the range’s upper-end had held its test and that a new downleg is underway.

Gold Feb Contract (GC, ETF: (GLD))
Tuesday’s drop under the 1246.00 pullback limit was extended Wednesday, at least initially. A recovery back to the open’s gap doesn’t prevent extending down Thursday, but it keeps the door open to recovering. Initial weakness that doesn’t gap down under Wednesday’s 1233.50 low or immediately break it would more likely recover to resume the rally, confirmed above 1248.50.

Silver Mar Contract (SI, ETF: (SLV))
Holding a test of “lower prior highs” Tuesday didn’t prevent gapping down further Wednesday. The gap back up to Tuesday’s close was nearly recovered, its difference potentially reflecting pessimism, which would be bullish from a contrarian perspective.

30-year Treasury Mar Contract (US, ETF: (TLT))
Tuesday’s dip to its minimum 130-18 pullback limit extended overnight to greet Wednesday’s open attacking the minimum 130-02 pullback limit. A third higher close remains outstanding.

Crude Oil Feb Contract (CL, ETF: (USO))
Tuesday’s choppy ranging launched a session-long rally Wednesday that trended through the 93.65 bounce limit by mid-morning, on the way to 94.65. Its recovery would have been bullish before extending down last week to the target area. It is still resistance. Back under 93.65 would put back into play the 90.50-91.25 target area.

Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
Despite probing above it intraday Wednesday, the close settled back at or under the 4.36 corrective bounce limit that was tested Tuesday. There is no reason to further delay resuming the decline Thursday, let alone any bearish reason to resume the bounce.

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A daily summary of high-profile members of several complexes…[pay] View a more detailed discussion of each at the end of today’s Market Wrap.

Today’s Highlight Tuesday’s price action had a common theme of counter-trending or not trending. No coverage extended toward unfinished business.

Dollar Basket Mar Contract (DX, ETF: (UUP, UDN))
Ranging sideways Tuesday in negative territory without extending down, despite probing prior lows, is essentially “ineffectual pessimism.” Any initial strength Wednesday would be credible for extending up throughout the day.

Eurodollar Mar Contract (EC, ETF: (FXE))
Tuesday’s probe of Friday’s close back to it high gained no traction, essentially ranging sideways like Monday’s dip. Closing back under 1.3645 would be credible for extending down, but there is otherwise no active buy signal.

Gold Feb Contract (GC, ETF: (GLD))
Tuesday’s hovering under Monday 1255.00 highs eventually plunged — relatively speaking — to probe under the 1246.00 pullback limit down to 1241.00, without recovering. Opening Wednesday’s regular trading hours back above 1246.00 would reject the late plunge. There is otherwise no active sell signal.

Silver Mar Contract (SI, ETF: (SLV))
Tuesday’s late plunge still held above relevant support, so not extending down immediately Wednesday would be likely to recover.

30-year Treasury Mar Contract (US, ETF: (TLT))
Tuesday’s pullback held 130-18, which is able to resume the rally to fulfill the minimum required higher close. But the pullback could still visit 130-02 first.

Crude Oil Feb Contract (CL, ETF: (USO))
Tuesday’s choppy ranging still leaves outstanding the more thorough test of the decline’s 90.50-91.25 target range.

Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
Monday’s bounce extended to probe the 4.36 bounce limit that represents the Head & Shoulders pattern’s maximum corrective bounce. Closing any higher would all but invalidate the pattern.

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A daily summary of high-profile members of several complexes…[pay] View a more detailed discussion of each at the end of today’s Market Wrap.

Today’s Highlight Natural Gas had broken lower last week from a massive Head & Shoulders pattern. Monday’s big bounce threatens to reverse momentum back up prematurely. Possible. That, or the more likely scenario that the bounce is refueling sellers for a bigger downleg.

Dollar Basket Mar Contract (DX, ETF: (UUP, UDN))
Narrow ranging Monday failed to offer any new parameters. Trending early Tuesday would be less credible.

Eurodollar Mar Contract (EC, ETF: (FXE))
Monday morning’s dip confirmed that buyers had gained no traction for Friday’s fresh high that had held the noise range around prior highs. But momentum hasn’t reversed back down, and there is no active signal.

Gold Feb Contract (GC, ETF: (GLD))
Overnight strength to 1255.00 was corrected Monday morning, but recovered into the afternoon. The rally’s momentum now remains intact so long as 1246.00 holds as support.

Silver Mar Contract (SI, ETF: (SLV))
Fresh highs were slow to materialize Monday, but eventually followed Gold up, and then outperformed it by probing overnight highs testing 20.45.

30-year Treasury Mar Contract (US, ETF: (TLT))
Hardly any hesitation interrupted last week’s recovery from extending higher Monday, testing 131-08. A second consecutive higher close Monday would require there to be a third, and probably a test of 131-28.

Crude Oil Feb Contract (CL, ETF: (USO))
More selling Sunday night and Monday confirmed that Friday’s bounce was only corrective, and that targets remain outstanding back into the 90.50-91.25 range, which was being attacked Monday afternoon.

Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
Monday morning’s steep surge tested the Head & Shoulders pattern’s 4.22 neckline as resistance. A 61.8% retracement of the one-week drop from 4.43 is 4.26, with room for noise around it up to 4.36 before signaling a new upleg is underway. Closing Monday back under 4.11 would have been optimal for confirming the pattern’s 3.87 target remains intact. A second consecutive higher close Tuesday would start to be bullish.

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