Daily Spot

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 Gold fulfilled its corrective bounce target and reacted down meaningfully. Currencies had already reacted from their new extremes overnight. Are they all preparing to reverse their recent moves, or just preparing to extend them?

Dollar Basket Jun Contract (DX, ETF: (UUP, UDN)) Potential to 78.87 was nearly fulfilled by Monday night’s blip-down to 78.93. Tuesday’s intraday action only ranged narrowly around unchanged. The 78.93 objective may yet be retested, unless there were first a close above 79.55 to signal momentum reversing up.

Eurodollar Jun Contract (EC, ETF: (FXE)) Monday’s action put into play potential for extending the rally to 1.3360 and 1.3400. An overnight blip-up to 1.3390 was retraced before the open, and never retested intraday. Its reaction down never extended, as Tuesday’s session ranged narrowly around unchanged. The overnight high’s retest up to 1.3400 remains possible, but back under 1.3285 would signal momentum already reversing down.

Gold Apr Contract (GC, ETF: (GLD)) The 1691.00 corrective bounce target from Thursday’s Island reversal pattern was tested Tuesday up to 1697.00. Its reaction down to 1679.50 traded the afternoon essentially unchanged. Closing under 1676.00 would signal momentum reversing down to at least retest the Island’s lows under 1640.00. There is otherwise potential for extending the rally to 1712.00.

Silver Apr Contract (SI, ETF: (SLV)) Monday’s bounce had stopped suspiciously short of filling the gap back to last Monday’s 33.00 close, despite having plenty of time intraday. Tuesday’s gap up to it prior high above 33.00 confirmed. But the decline won’t yet resume without first closing back under 32.25.

30-year Treasury Jun Contract (US, ETF: (TLT)) Monday’s recovery from fresh session lows resumed potential for extending the bounce to 138-10. It was tested Tuesday by 3 ticks. Closing under 137-18 would now signal momentum starting to reverse down, confirmed under 137-04. If the bounce were to extend any higher, then it should begin by surging aggressively from Tuesday’s close.

Crude Oil May Contract (CL, ETF: (USO)) Friday morning’s $3 surge has yet to extend any higher, as price action since then continued ranging narrowly between 106.80-107.70. Closing any higher would be credible for resuming the rally.

Natural Gas Apr Contract (NG, ETF: (UNG)) Last week’s failure to recover 2.32 resolved Tuesday in a probe of fresh lows down to 2.18. Any potential to form a bottom here — which there is — is premature.

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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 Gold soared Monday morning when Bernanke made his next stop on the “QE3 is Coming” tour. The rally from Thursday’s Island pattern under 1640.00 came within several dollars of its 1691.00 objective. More to come, or back to the Island?

Dollar Basket Jun Contract (DX, ETF: (UUP, UDN)) Friday’s low had bottomed upon retracing 61.8% of the rally from last month’s low. Immediate fresh lows Monday were maintained through the close, giving the drop potential for extending down to 79.10 and 78.87

Eurodollar Jun Contract (EC, ETF: (FXE)) Friday’s rally extended higher immediately Monday morning, extending also the 1-1/2 week old rally. It could still extend further to 1.3360 or 1.3400, so long as Friday’s 1.3290 were to hold as support. A close under 1.3250 is needed to signal momentum reversing down.

Gold Apr Contract (GC, ETF: (GLD)) Monday’s $20 spike up from 1655.00 on Bernanke’s comments followed Sunday night’s fresh high attacking 1670.00.Higher highs intraday came within almost $3 of touching the 1691.00 target. It can be tested up to 1697.00 before suggesting a bigger rally is underway. Otherwise, the Island’s 1627.50 low requires a retest.

Silver Apr Contract (SI, ETF: (SLV)) Monday’s gap up firmed only slightly higher intraday. But the pattern’s reluctance to extend another nickel to fill the outstanding gap back to last Monday’s 33.00 close does reflect pessimism, and this might be bullish from a contrarian perspective. However, gradually ticking to fresh highs — instead of surging — would be vulnerable to reversing down sharply.

30-year Treasury Jun Contract (US, ETF: (TLT)) Monday’s gap down was quickly retraced to fill the gap back to Friday’s 137-26 close. A fresh low down to 136-27 was also recovered.  Now a close under 137-06 would trigger a new downleg targeting 134-10 Otherwise, potential remains alive to test 138-10 or 139-05 first.

Crude Oil May Contract (CL, ETF: (USO)) Friday’s $3 spike up through 107.70 has yet to recover back above 107.70. It also has yet to be rejected.. Its extension targeting 111.75 remains possible, but not triggered until closing above 107.70.

Natural Gas Apr Contract (NG, ETF: (UNG)) The recent pullback had held 2.27 to maintain potential to resume the rally. Monday’s close under 2.27 squelched it. Now bounces have room up to 2.32 before signaling momentum may be reversing up.

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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 As was suspected, Gold’s heavy selling into Thursday’s fresh lows proved to be a trap. Friday’s open gapped up above prior lows and extended back to prior highs. If Friday was an Island, then this bounce, too, shall pass.

Dollar Basket Jun Contract (DX, ETF: (UUP, UDN)) Friday’s gap down tested the two-week old low around 79.50, which held through the close. Meanwhile, the close was also still testing Monday’s low as support. Closing above 80.10 would signal the decline had ended, but the pullback could extend down otherwise.

Eurodollar Jun Contract (EC, ETF: (FXE)) Friday’s gap up above Thursday’s highs extended to fresh highs for the week at 1.3290 resistance. It was actually a pullback from 1.3300 overnight highs, and it was under Tuesday’s highs. In other words, it was the upper-end of the range, and not a breakout. But 1.3215 must break lower to signal momentum reversing down, confirmed under 1.3160.

Gold Apr Contract (GC, ETF: (GLD)) Thursday’s gap down under the week-long 1640.00 support had extended to 1627.00. But the morning’s 1640.50 high was recovered into the close. Combined with spending the entire session in negative territory suggested that an Island Reversal had formed. In fact, Friday’s open gapped up above 1646.00 and extended back to 1661.00 resistance. Event the 1666.00 gap back to Monday’s close was filled. Filling the gap neutralizes its attraction above, but the corrective bounce could still extend to 1691.00 so long as 1650.00 holds as support.

Silver Apr Contract (SI, ETF: (SLV)) Gapping down Thursday and trending down to a new low confirmed a downleg is in-play. Friday’s gap up within Thursday’s range does not invalidate Thursday’s signal. Holding a test of 32.30 resistance allows the decline to resume at any time. The gap back to Monday’s 33.00 close may be filled first.

30-year Treasury Jun Contract (US, ETF: (TLT)) Thursday’s shallow bounce gapped up Friday and extended higher to 138-04. The bounce has room up to 138-10 before it must reverse down to new lows at 134-10, or else extend higher to 139-05.

Crude Oil May Contract (CL, ETF: (USO)) Friday’s $3 surge up to 108.25 quickly settled back under the relevant 107.70 resistance. Closing back under 105.75-106.15 would trigger a new downleg targeting at least 101.30. A new rally leg targeting 111.75 must first recover 107.75.

Natural Gas Apr Contract (NG, ETF: (UNG)) Rally potential had been relying upon surging above 2.32 resistance. It had been probed repeatedly, but its reactions were never productive and gained no traction. Friday was the most serious reaction to 2.32 resistance. There is otherwise no active signal.

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Today’s Highlight Gold gapped down big, under prior lows, spending all of Thursday in negative territory. The pattern also formed a potential “Island Reversal.” It’s much too soon to form a durable bottom, but not extending down immediately Friday could launch a sizable corrective bounce.

Dollar Basket Jun Contract (DX, ETF: (UUP, UDN)) Wednesday’s open ranged narrowly around 80.10, whose recovery would trigger a bigger rally leg underway. The reaction down already filled the gap back down to Wednesday’s 79.87 close, without closing lower. Closing above 80.10 would still trigger a bigger rally leg underway.

Eurodollar Jun Contract (EC, ETF: (FXE)) Thursday’s gap down quickly tested 1.3145 whose break would have signaled momentum reversing down. An intraday bounce nearly filled the gap back to Wednesday’s 1.3210 close, which held as resistance. Now a close under 1.3160 would trigger a new downleg underway.

Gold Apr Contract (GC, ETF: (GLD)) After days of holding 1661.00 resistance, the bearish pattern proved itself out Thursday by gapping down to new lows that tested 1627.50. But look out for the potential to become an Island Reversal. Thursday’s open gapped down under 1640.00 prior lows, and the entire session developed in negative territory. Also, no close under 1650.00 ever actually triggered until now. A second consecutive lower close Friday would confirm the breakout’s 1591.00 objective is in-play. Gapping up above 1650.00 Friday instead would trigger a sizable corrective bounce to 1691.00.

Silver Apr Contract (SI, ETF: (SLV)) Gapping down Thursday to 31.80-31.90 prior lows and extending down throughout the day to new lows at 31.09 further confirms the bearish pattern.Closing under 30.95 would confirm a target in-play at 37.90.

30-year Treasury Jun Contract (US, ETF: (TLT)) Thursday’s Jobless Claims did not derail the bounce from Tuesday’s 135-08 low. Neither did it help the bounce extend. Much of the session developed above Wednesday’s 136-28 high, briefly exceeding it up to 137-13. But narrow ranging throughout the day only tested  week-old highs at 137-00. A pullback has room down to 136-06 before signaling the 134-10 target is in-play.

Crude Oil May Contract (CL, ETF: (USO)) Wednesday’s bounce did not extend Tuesday’s rejection of Monday’s gap up. Neither did it reject the gap up’s rejection. The pattern was free to extend lower Thursday, which it did. Last week’s 104.29 low was attacked to within a nickel, this time without any SPR rumor. Now a second consecutive lower close would confirm a bigger downleg in-play, next targeting 103.00 and 100.15.

Natural Gas Apr Contract (NG, ETF: (UNG)) Thursday’s EIA report did not help to launch a new rally leg. In fact, 2.32 support was probed yet again, this time by its deepest, failing to recover by the close. This action puts a clock on the resolution — a rally should be obvious by noon Friday if a deeper pullback is to be avoided.

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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 The long bond finally firmed for an entire session, and not just by a little. The recent probes of fresh lows and popping back up — then repeating the pattern — has suggested that sellers were chipping away at support. Wednesday’s unanswered buying spree now adds a timing element for resuming the decline Thursday, or else rallying sharply… Did someone say, “Jobless Claims”?

Dollar Basket Jun Contract (DX, ETF: (UUP, UDN)) Wednesday’s high only touched Tuesday’s 80.07 opening gap before ranging sideways narrowly into the close. This impatient selling reflects pessimism that suggests a bigger rally leg remains likely, triggered above 80.10.

Eurodollar Jun Contract (EC, ETF: (FXE)) The gap to Tuesday’s 1.3181 opening print fulfilled its role of attracting price back down to it after Tuesday’s bounce back to 1.3260. And an overnight rally to 1.3292 touched the interim bounce limit. Closing under 1.3145 would signal momentum reversing down, confirmed under 1.3090, and targeting new lows under 1.3015.

Gold Apr Contract (GC, ETF: (GLD)) Wednesday’s bounce held a test of 1661.00 resistance before settling back to test 1650.00 as support. Closing under 1646.50 should launch a downleg to new lows.

Silver Apr Contract (SI, ETF: (SLV)) Wednesday’s inside day was not biased in either direction. So long as 32.30 continues to hold as resistance, the decline’s momentum remains intact.

30-year Treasury Jun Contract (US, ETF: (TLT)) Wednesday’s gap up firmed throughout the day to 136-28, no longer ranging around 135-16. The gap up helps to separate the firming from being a false break higher. But a second consecutive higher close Thursday is needed to avoid resuming the decline to 134-10.

Crude Oil May Contract (CL, ETF: (USO)) Tuesday’s break back under 107.70 (basis May, a 50-cent premium to Apr) did not extend down Wednesday. But neither was it recovered back up to 107.70. Although a new downleg may not yet be underway Thursday, simply closing again under 107.70 should marginalize buyers. Otherwise, a higher close would put back into play the potential for testing 111.50.

Natural Gas Apr Contract (NG, ETF: (UNG)) More narrow ranging around 2.32 Wednesday still firmed into the close. Thursday’s EIA report has an opportunity to launch a rally, confirmed by closing above 2.42.

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