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 A funny thing happened on the way to reversing the Long Bond’s gains… Tuesday’s gap down was recovered back up to last week’s highs. Did a flight-to-safety from weak stocks delay a bigger drop, or is the next leg up?

Dollar Basket Mar Contract (DX, ETF: (UUP, UDN)) The rally’s 81.80-82.20 target area has been tested repeatedly, but not very thoroughly. Closing back under 81.05 would start to signal that buying was fully absorbed, and that momentum was reversing down. The rally otherwise remains intact, 82.20 in-play.

Eurodollar Mar Contract (EC, ETF: (FXE)) A window has opened for the Euro to bottom. Last week’s retest of the prior Sunday night’s gap down had opened a window, but buyers crawled through it much too optimistically for a rally to generate solid sponsorship. Friday’s drop to new lows fulfilled the decline’s long-awaited 1.2650 objective. Now, closing above 1.2750 and 1.2825 would signal another recovery effort. But much more of a delay would simply resolve down.

Gold Feb Contract (GC, ETF: (GLD)) Bounce potential to 1665.00 was fulfilled Thursday. Its retest Tuesday reacted down only slightly, suggesting that fresh highs will test the next resistance at 1683.50. But closing under 1647.00 would signal momentum reversing down.

Silver Mar Contract (SI, ETF: (SLV)) Two weeks ago I was tracking a multi-session consolidation that was coiling strength, awaiting an explosion higher. It did come, gapping up sharply. But there has been no follow-through higher since then — only intraday brief probes of fresh highs that have failed — despite Gold extending. There is no requirement to play “catch-up,” but I would expect rotation at some point to extend the rally.

30-year Treasury Mar Contract (US, ETF: (TLT)) Friday’s bounce to 145-11 retested the two-week old high. And not just any old high, but the high of an extended rally, whose rejection produced sharply lower lows and a lot of volatility. Tuesday’s open gapped down to test 144-05, then recovered to almost touch Friday’s high. There is potential for probing yet higher, but nothing compelling at this stage. Meanwhile, closing under 144-05 would signal momentum reversing back down to last week’s lows.

Crude Oil Mar Contract (CL, ETF: (USO)) Last week’s retest of the rally’s 103.00 target again reacted down, this time after Nigeria’s “bullish” news failed to produce much buying pressure. While there remains potential to launch another upleg targeting 111.00, the pattern has yet to prove whether it is accumulation or distribution.

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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 Precious metals surged above their multi-session consolidation ranges. But can their patterns sustain new trending?

Dollar Basket Mar Contract (DX, ETF: (UUP, UDN)) Gapping down and ranging sideways throughout Tuesday has potential to become an Island Reversal if Wednesday’s open were to gap up. There is otherwise no active pattern.

Eurodollar Mar Contract (EC, ETF: (FXE)) Tuesday’s gap up extended no higher, and the balance of the session ranged sideways. The required retest of Sunday night’s lows should be underway by Wednesday’s close to avoid extending the bounce up to 1.2810.

Gold Feb Contract (GC, ETF: (GLD)) Days spent avoiding the 1610.50 sell signal while ranging under 1620.00 resistance were rewarded Tuesday by surging overnight and then extending intraday up to 1641.00. The balance of the session ranged back down to 1631.00. The pattern is vulnerable to gapping down and trending lower, but no other distributive pattern is in-play.

Silver Mar Contract (SI, ETF: (SLV)) Coiling at the range’s lower-end without breaking lower finally delivered fresh highs. The overnight surge produced a gap up above weeks worth of prior highs around 29.70 and higher highs intraday testing 30.30. Pullbacks have almost no room to maneuver without sellers gaining traction, so any dip must be extremely short and shallow — preferably no deeper than 29.60 — to maintain the breakout.

30-year Treasury Mar Contract (US, ETF: (TLT)) The open’s gap down to 142-05 support was premature to resume the decline. The gap back to Monday’s 143-00 close was filled, and held as resistance. Now only a close under 142-12 is needed to trigger a new downleg. But there is still potential to probe Monday’s high up to 144-00 while waiting.

Crude Oil Mar Contract (CL, ETF: (USO)) A retest of 103.00 had become increasingly likely as long as it had taken for its first test to react down, not to mention the reaction’s sluggishness. Despite Monday’s new pullback low down to 100.25, 103.00 was retested before Tuesday’s open. It held as resistance, but there is potential to become a new upleg targeting 111.00 so long as 102.00 were to hold as support.

Natural Gas Mar Contract (NG, ETF: (UNG)) The opportunity to close just slightly higher above 3.09 was rejected in favor of diving to new trend lows. The bottoming pattern is invalid if Wednesday’s open does not recover immediately and sustainably.

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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 Currencies earned the spotlight again, but for behavior that played out entirely overnight. Sunday night’s opens gapped to new trend extremes, which were rejected almost immediately, but probably need to be retested.

Dollar Basket Mar Contract (DX, ETF: (UUP, UDN)) The rally’s 81.80-81.20 target area was probed a little more thoroughly by Sunday night’s gap up. Monday’s regular open had retraced it enough to gap down slightly. The balance of the session was spent in negative territory, with the afternoon holding a brief test of the morning low. This “ineffectual pessimism” makes at least one more fresh high likely, but it could form a durable top if reversed to close negative on the day.

Eurodollar Mar Contract (EC, ETF: (FXE)) Sunday night’s gap down to new lows was recovered entirely, in time for the regular open to gap up. The balance of the session essentially ranged in positive territory, testing but not exceeding the morning’s high. This “excessive optimism” and the gap outstanding back to Sunday night’s open make a recovery unlikely yet, or unlikely to extend durably higher. But the sustained reaction up from gapping down, and the 1.2673 overnight low’s proximity to the long-awaited 1.2650 target, suggest that sellers may be running out of steam so a bottom can form.

Gold Feb Contract (GC, ETF: (GLD)) Friday’s probe above 1620.00 resistance held through Monday, which pushed back down to test 1610.50 support. Absent a bigger rejection of higher highs, or a bigger break under 1610.50 confirmed under 1598.00, the pattern is not very compelling.

Silver Mar Contract (SI, ETF: (SLV)) Monday once again narrowed its range, while still testing the lower-end of a multi-session range. Sellers just aren’t gaining traction for their effort, which suggests that patient buyers are waiting to produce a spike higher. Perhaps that needs a blip-down to fresh lows that stretches the slingshot back, first. Regardless, I would be more interested in buying weakness than selling strength.

30-year Treasury Mar Contract (US, ETF: (TLT)) Friday’s wild ride continued Monday. The gap down from having held 143-00 resistance touched 142-15 and reversed up. A probe above Friday’s highs touched 143-24. The recovery proved temporary, as the close dipped back under 143-00. Back under 142-12 would start to suggest the downleg had resumed, although it seems a little soon considering Friday’s volatility still being absorbed. Meanwhile, a fresh high could test 144-00.

Crude Oil Mar Contract (CL, ETF: (USO)) Despite extending the pullback to test 100.35 Monday, the reaction down from meeting the 103.00 target last week still seems both delayed and sluggish, enough to suspect a retest of 103.00 is likely regardless of the pattern’s ultimate resolution.

Natural Gas Mar Contract (NG, ETF: (UNG)) Monday’s open did not extend Friday’s test of the 3.09 buy signal. But its gap down didn’t gain traction — it was within Friday’s range, as was the entire session. And the gap back to Friday’s close was left outstanding to help attract price higher, which would be credible for launching a durable rally back above 3.09.

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Today’s Highlight The Euro extended down to come within its closest, yet, of a potential bottom. It’s unlikely to happen Monday, for reasons described below, but a sharply rally is coming soon — whether or not only temporary.

Dollar Basket Mar Contract (DX, ETF: (UUP, UDN)) Finally probed fresh highs Friday, to within a dime of the 81.80-82.20 target. Now the rally’s momentum remains intact so long as pullbacks hold 81.15 as support. Closing under 80.85 would signal momentum reversing down.

Eurodollar Mar Contract (EC, ETF: (FXE)) 1.2650 was attacked to its closest level yet, Friday morning. The afternoon ranged narrowly just off session lows, which is not accumulative. Anyway, currencies tend to duplicate Friday’s action on Monday morning, making fresh lows likely. The trend remains down near-term so long as 1.2740-1.2750 holds as resistance.

Gold Feb Contract (GC, ETF: (GLD)) Still probing 1620.00 resistance, while the Dollar probes fresh highs and while Silver picks at the lower-end of its recent range. It’s not decoupling, but being extended and an accident waiting to happen. Closing back under 1610.50 should reveal cracks in the rally.

Silver Mar Contract (SI, ETF: (SLV)) Yet another session of only ranging sideways, and mostly at the range’s lower-end. Mostly at the range’s lower-end, without yet trending down, which suggests that a fresh high is possible. A fresh high in tandem with another Gold surge could mark the simultaneous peak of their corrective bounce legs.

30-year Treasury Mar Contract (US, ETF: (TLT)) Thursday’s insane volatility apparently sapped too much energy to maintain a break under the range on Friday’s Employment Situation report. Its reaction down to fresh lows at 141-10 was recovered back up to the 143-00 bounce limit that had held two separate tests one day earlier. Closing back under 142-12 would trigger a new downleg.

Crude Oil Mar Contract (CL, ETF: (USO)) Having waited several days before finally backing off from the 103.00 target met Tuesday, sellers were unconvincing. Friday’s early lower low quickly bottomed, too. At least a probe above 103.00 remains likely, if not also a new upleg targeting 111.00.

Natural Gas Mar Contract (NG, ETF: (UNG)) Friday’s week-ending recovery to 3.09 stopped patiently short of filling the gap back to Wednesday’s 3.12 close. Leaving its attraction outstanding over the weekend can help to resume the rally into the new week. But there is no room or time for hesitation if a rally is actually forming. So, almost any immediate strength Monday would be credible for extending sharply higher.

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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 Is Gold still “jumping the shark”? Currencies extended sharply, with the Euro fulfilling the decline’s long-awaited minimum objective of probing year-old lows. It’s certainly interesting that Gold rallied only back to its prior session’s highs, while Silver ranged sideways.

Dollar Basket Mar Contract (DX, ETF: (UUP, UDN)) Wednesday’s recovery extended sharply higher overnight to retest last week’s 81.25 bounce target. This leg’s minimum objective is to probe fresh highs above 81.41, probably to 81.80-82.20, so long as pullbacks no hold 80.85 support.

Eurodollar Mar Contract (EC, ETF: (FXE)) A steep overnight slide finally fulfilled the decline’s long-awaited minimum objective, to probe under last January’s 1.2901 low. The 12650 objective remains in-play so long as bounces now hold 1.2840-1.2900 as resistance.

Gold Feb Contract (GC, ETF: (GLD)) The drop from Wednesday’s 1826.80 pre-open high extended down to 1597.70, testing 1598.00 support. Its test launched a recovery to within $1 of  1597.70, just noise in the range. Closing back under 1610.50 would still signal a new downleg underway, confirmed by closing under 1598.00.

Silver Mar Contract (SI, ETF: (SLV)) The divergence from Gold persisted for a second consecutive day as Tuesday’s 29.73 high still have yet to be met. But 28.70 support still holds, so sellers have yet to reject the bounce.

30-year Treasury Mar Contract (US, ETF: (TLT)) Trending ahead of Friday’s Employment Situation report would be unusual. Even more unusual was Thursday’s wide and choppy range. Room for a bounce testing 143-00 was fulfilled before Thursday’s open. Despite reacting down to probe under Wednesday’s 142-03 low, 143-00 was revisited. And it was retraced again down to 142-05. A close beyond either end of the range Friday should extend in that direction, and all unfinished business is below.

Crude Oil Mar Contract (CL, ETF: (USO)) A third consecutive session of testing the 103.00 rally target again failed to close higher. It was rejected back under 102.00. There is no active signal, but a vulnerability to extending higher sharply.

Natural Gas Mar Contract (NG, ETF: (UNG)) Wednesday’s timid probe above 3.09 didn’t was the wrong character for triggering its buy signal. Extending higher after Thursday’s EIA report would have been bullish. But Thursday’s reaction fell back to 2.98. Meanwhile, Thursday’s open left outstanding a gap back to Wednesday’s 3.12 close. Closing above 3.09 would be sufficient to trigger momentum reversing up.

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