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 Has the Euro decoupled from S&Ps? It might seem so, since the Euro has fallen these past two sessions while S&Ps have rallied. I’m more interested in intraday correlation, which hasn’t yet lasted two complete sessions. But the next divergence could see the two markets part ways for some time.

Dollar Basket Mar Contract (DX, ETF: (UUP, UDN)) Tuesday’s gap up to a fresh high above 80.24 was retraced back to 80.00. A bounce was testing 80.24 into the close, and not clearly recovering it, so the rally targeting 80.85 now depends upon extending higher without delay.

Eurodollar Mar Contract (EC, ETF: (FXE)) Tuesday’s gap down to 1.3050 was retraced almost entirely into the close. But the three-week old decline has yet to probe a new low under 1.2975. The attraction should help to maintain the decline, and just closing under 1.3020 would be likely to accelerate the decline’s pace.

Gold Apr Contract (GC, ETF: (GLD)) Friday’s bounce to 1712.00 support was finally rejected Tuesday. That afternoon had only ranged narrowly, and Monday’s session had only gapped down around 1700.00. Even Tuesday’s session recovered from 1683.30 to retest 1700.00. But the FOMC reaction extended down sharply to probe under last week’s 1663.40 low. The drop’s momentum remains intact so long as 1685.00 is not recovered.

Silver Mar Contract (SI, ETF: (SLV)) Tuesday’s post-close drop to 33.00 all but confirms that any unfinished business above is not attractive. But a decisive close under 33.60 is still needed to confirm.

30-year Treasury Jun Contract (US, ETF: (TLT)) The ultimate 138-16 target was attacked to within 10 ticks Tuesday. The rejection of Monday’s test of 140-22/140-29 resistance produced a gap down to test 140-00, which extended through the close. The drop’s momentum remains intact so long as 140-28 holds bounces.

Crude Oil Apr Contract (CL, ETF: (USO)) Monday’s drop allowed for a corrective bounce to test 107.20. It held Tuesday’s bounce, so now a close under 106.30 would resume the decline targeting fresh lows under 104.00.

Natural Gas Apr Contract (NG, ETF: (UNG)) Tuesday’s fresh low to 2.20 was rejected by an afternoon surge that ended the day testing 2.32. Closing any higher would have triggered a bigger rally leg targeting 2.51, which remains possible so long as pullbacks now hold 2.27 as support.

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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 My mid-day update Friday pointed out the significant Gold and Crude Oil resistance being tested. Their reactions down were all but assured, except not their timing. Monday was an interesting example of how delaying the reaction can soften its effect. Their patterns are still bearish, although an interim bounce is possible — offering a short-entry opportunity.

Dollar Basket Mar Contract (DX, ETF: (UUP, UDN)) Monday’s shallow dip from Friday’s 80.10 high down to 79.90 does not suggest that buyers have lost any control, and so 80.85 remains in-play

Eurodollar Mar Contract (EC, ETF: (FXE)) Monday morning did not mimic Friday’s deep drop to 1.3100, and instead ranged narrowly just above Friday’s lows. Price continued firming into the afternoon to range narrowly around 1.3150. Perhaps 1.3200 will also be tested as resistance, but the pattern otherwise remains bearish.

Gold Apr Contract (GC, ETF: (GLD)) Friday’s session had avoided reacting down hard from 1712.00 resistance. But Monday’s open gapped down anyway and the balance of the session remained under pressure, including a test of 1693.00. That was a little too close to 1687.00 support without touching it to consider it the end of selling pressure. Closing above 1712.00 would be bullish, but the pattern remains likelier to resolve down.

Silver Mar Contract (SI, ETF: (SLV)) Friday’s bounce had stopped a dime short of confirming it was extending higher. Monday’s gap down held multiple tests of 33.60 as support to avoid signaling a new downleg underway, which would prevent a bigger bounce from neutralizing any unfinished business above.

30-year Treasury Jun Contract (US, ETF: (TLT)) Having fully retraced the prior week’s bounce up to 142-10 back down to its 140-02 origin through Friday, NOT trending down immediately Monday would be vulnerable to a bouncing before resuming the drop. Monday’s open did bounce. In fact, it surged to test 140-22/140-29, which ultimately held as resistance. The pattern remains vulnerable to resuming the decline.

Crude Oil Apr Contract (CL, ETF: (USO)) Friday’s session had avoided reacting down hard from 108.15 resistance. But Monday’s open gapped down anyway and the balance of the session remained under pressure to test 105.50-106.50. A retest of last week’s lows at 104.35-104.50 is in-play, although a detour to 106.85-107.20 is possible first.

Natural Gas Apr Contract (NG, ETF: (UNG)) Now closing above 2.32 — not just above 2.32 — would initially target 2.51, after Monday’s gap down held a test of Friday’s lows.

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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 Sometimes a correction just can’t end fast enough. A two-day correction among currencies was scheduled to end by Thursday’s close. Retracing any further Friday no long would have qualified as a correction. Instead, Friday’s action alone ultimately retraced all of the two-day correction.

Dollar Basket Mar Contract (DX, ETF: (UUP, UDN)) Wednesday’s “pivot reversal” was not a trend-changer, so Thursday’s follow-through was enough to fulfill the setup. Despite Thursday having gapped down sharply, Friday’s gap up to the 79.55 buy signal, and extended back up to fresh highs for the week. Having come within a dime of the 80.20 target, the next higher objective is 80.85.

Eurodollar Mar Contract (EC, ETF: (FXE)) Gapping down under its 1.3240 sell signal Friday extended down further intraday to touch the week’s lows at 1.3100. This outperformance compared to the Dollar Index — which probed fresh highs — requires the next session either to bounce, or else to extend the drop. The latter is likelier, since currencies tend to mimic Friday’s behavior on Monday mornings.

Gold Apr Contract (GC, ETF: (GLD)) Testing 1687.00 and 1703.00 resistance did produce a pullback Friday. It was sizable, but also temporary — its plunge to 1677.00 was recovered as quickly to fresh highs attacking 1715.00. The recovery intersected with 1712.00 resistance, whose break Monday had created so much follow-through. Still testing it into Friday’s close does not equate to recovering it, and almost any initial weakness Monday would be credible for extending down into the week.

Silver Mar Contract (SI, ETF: (SLV)) Friday morning’s dip was recovered to fresh highs at 34.45. That’s a dime short of confirming the bounce can extend higher and neutralize unfinished business above at 35.60 and 36.10. But only a close under 33.60 would signal the downleg has resumed.

30-year Treasury Jun Contract (US, ETF: (TLT)) Thursday afternoon’s narrow ranging around 140-22 support did break lower Friday, probing fresh lows, fully retracing last week’s bounce to 142-10. There was no bullish reason for that bounce, so negative close Monday would confirm its purpose was only to refuel sellers. But not trending down immediately at Monday’s open would be likelier to bounce, first.

Crude Oil Apr Contract (CL, ETF: (USO)) Thursday’s bounce tested 107.20 resistance intraday. Closing above it would have signaled a rally underway to new highs. Trying to extend higher anyway Friday would be difficult to gain traction. Friday did try, only to peak upon testing the 108.15 upper-end of the noise range around 107.20. In fact, the entire intraday gain was retraced. The rally can still extend higher — it must close above Friday’s 108.20 high without delay in order to avoid retesting the week’s low.

Natural Gas Apr Contract (NG, ETF: (UNG)) Friday’s flat-to-higher ranging avoided an excessive optimism, while also preventing the decline from extending into the weekend. Closing above 2.38 would target 2.51, but there is otherwise no active pattern.

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Today’s Highlight Thursday duplicated Wednesday’s counter-trend day, by extending Wednesday’s trend. It’s no longer counter-trend if Friday’s price action were to follow-suit… Meanwhile, the long bond bucked the trend again and dipped further. Reaction to Friday’s Employment Situation report should settle matters.

Dollar Basket Mar Contract (DX, ETF: (UUP, UDN)) Wednesday’s “pivot reversal” followed-through Thursday with a deeper pullback. In fact, Thursday’s open gapped down into Friday and Monday’s range around 79.40 before drifting lower. Closing above 79.30 Friday would suggest the pullback had ended, and closing above 79.55 would resume the rally next targeting 80.20.

Eurodollar Mar Contract (EC, ETF: (FXE)) Like the Dollar Index, Wednesday’s “pivot reversal” followed-through Thursday by gapping up. The Euro was more responsive, trading almost exclusively above its Friday and Monday’s range to test 1.3280 resistance. Closing back under 1.3240 would signal the bounce had ended.

Gold Apr Contract (GC, ETF: (GLD)) Wednesday’s 61.8% retracement of Tuesday’s drop was extended higher Thursday, filling the gap back to Monday’s 1703.00 close. The gap, and its “higher prior lows” held as resistance. Closing back under 1687.00 would now trigger a retest of the lows under 1661.50.

Silver Mar Contract (SI, ETF: (SLV)) Gapping up Thursday to 34.00 held as resistance, even pushing price back into negative territory temporarily. So long as 33.60 were to hold as support, the bounce could extend higher to test 34.55 and 36.00. But almost any deeper early weakness Friday would be vulnerable to sliding again.

30-year Treasury Jun Contract (US, ETF: (TLT)) Thursday’s gap down took an entire minute before also touching 140-27. Its retest at this stage was likely to break lower, and the intraday low did print 140-16. Closing under 140-22 would have signaled the downleg targeting new lows, but the entire afternoon only ranged narrowly around 140-22. Recovering 140-27 would suggest another bounce underway. Reaction to Friday’s Employment Situation report is likely to resolve the pattern.

Crude Oil Apr Contract (CL, ETF: (USO)) Wednesday’s recovery needed to extend higher into a close above 107.25 Thursday to signal another upleg underway. Only 107.20 was touched. And that’s close enough without also closing above it to be a concern. Now almost any delay in extending higher Friday would be bearish.

Natural Gas Apr Contract (NG, ETF: (UNG)) Thursday’s opportunity to start forming a bottom  extended down to new lows Friday at 2.23. The closing bounce went out testing Wednesday morning’s 2.28 low as resistance. But there is no bottom or reversal signal yet formed.

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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 Wednesday was a counter-trend day, assuming that recent action has been trending. With one exception: Bonds. Its intraday weakness didn’t neutralize any unfinished business below. That suggests optimism may be a little excessive. And that is potentially bearish — from a contrarian perspective — especially with Friday’s Employment Situation report only one day away.

Dollar Basket Mar Contract (DX, ETF: (UUP, UDN)) Wednesday’s price action was almost a “pivot reversal.” Almost. Gapping down in an uptrend, recovering to probe a new trend high, but then closing back under the morning’s low. These elements would qualify as a pivot reversal setup, except that Tuesday’s high was the product of a significant gap. This missing element doesn’t prevent some further dipping Thursday. But it makes that dip only a correction, and not the trend reversal it would otherwise have been.

Eurodollar Mar Contract (EC, ETF: (FXE)) Similar to the Dollar action described above, Wednesday’s “pivot reversal” may delay the Euro’s decline, but should not end it.

Gold Apr Contract (GC, ETF: (GLD)) Tuesday’s drop was corrected by Wednesday’s bounce to 1688.00 It retraced 61.8% of the drop from Tuesday’s 1704.00 close to its 1663.50 low. Tuesday’s post-open high was barely probed. If the two-day base were to launch a rally Thursday, with potential to 1683.00, its origin suggests that its sponsorship would be weak hands, making the bounce likely to fail.

Silver Mar Contract (SI, ETF: (SLV)) The corrective bounce targeting 36.10 required its immediate resumption Tuesday. That failed, but Tuesday’s low held a test of support that allowed Wednesday to try again. Wednesday’s session did trend up immediately and throughout. Closing above 33.85 Thursday would confirm the bounce’s momentum is intact.

30-year Treasury Jun Contract (US, ETF: (TLT)) Rallying stocks Wednesday undermined any need for a flight-to-safety. Bonds dipped to test 141-14 support. Avoiding a lower close also avoided signaling that momentum was already reversing down. That doesn’t protect against gapping down Thursday to test 140-27, whose retest at this stage would likely break lower. There is otherwise no buy signal in-play.

Crude Oil Apr Contract (CL, ETF: (USO)) Wednesday’s fresh low at 104.35 was recovered to test 106.30. That was far enough back above last week’s lows to not be noise around Tuesday’s gap down. The attempt to reject Tuesday’s gap down would be complete by extending higher to close above 107.25. Closing back under 104.80 would instead confirm Tuesday’s gap down and extend it much lower.

Natural Gas Apr Contract (NG, ETF: (UNG)) Two consecutive new low closes have produced a third lower close. While the break could extend lower still, there is no requirement to do so. Wednesday’s session happened to test two relevant support levels at 2.28-2.30. An immediate recovery attempt would not be credible, but could be the beginning of a better bottoming pattern. The trend otherwise remains down.

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