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 Did Gold “jump the shark” Wednesday? Many commodities on Wednesday retraced or contained Tuesday’s year-opening moves. Except for Gold, which extended higher again for a second consecutive day, uncharacteristically in the same direction as the Dollar, and without bringing Silver along for the ride.

Dollar Basket Mar Contract (DX, ETF: (UUP, UDN)) Wednesday’s gap up was maintained for long enough and high enough to reject Tuesday’s fresh low. The session stopped short of reversing momentum up to fill open gaps above, but the recovery would be confirmed by one more consecutive higher close Thursday.

Eurodollar Mar Contract (EC, ETF: (FXE)) Wednesday’s plunge confirmed that last Thursday’s recovery from new lows had not gained traction, and that Friday’s bounces were accidents waiting to happen. New lows are in-play.

Gold Feb Contract (GC, ETF: (GLD)) Now this bounce is getting a little ridiculous. Already having retraced two of the downleg’s bounce limits, and then its original 1610.50 sell signal, Wednesday’s high tested the prior rally’s 1620.00 bounce limit. Closing back under 1610.50 Thursday would have sealed a top, so gapping under it Thursday and trending down intraday — preferably to close under 1598.00 — would serve by proxy.

30-year Treasury Mar Contract (US, ETF: (TLT)) Tuesday’s test of 143-04 was followed by Wednesday’s second consecutive lower close at 142-13. This confirms that last week’s corrective bounce has ended, and that momentum has reversed down. The corrective bounce had originated upon breaking above 142-06 resistance, which is now being tested as support, so closing under it Thursday should be irrecoverable. Meanwhile, it does have potential to launch an interim corrective bounce, which should not close above 143-00.

Crude Oil Mar Contract (CL, ETF: (USO)) A second consecutive higher close Wednesday above Tuesday’s test of the 103.00 target would have signaled a much more substantial rally underway. A much more substantial rally may be underway. But Wednesday’s close did not signal it. Meanwhile, the current rally was not rejected, so there is no active signal, only the potential that a much more substantial rally may be underway.

Natural Gas Mar Contract (NG, ETF: (UNG)) Wednesday’s close back above 3.09 lacked the fireworks that would be appropriate for a recovery in this pattern. But I’m willing to give it a benefit of the doubt for reversing momentum up, so long as Thursday’s EIA report resolves up sharply.

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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 It took more saber-rattling to get there, but Crude Oil finally met its $103 target Tuesday. The pattern has become vulnerable to reversing down sharply… or to extending the rally to truly frightening levels.

Dollar Basket Mar Contract (DX, ETF: (UUP, UDN)) Bouncing off of 80.40 support Friday did not prevent gapping down to 80.20 Tuesday. The balance of the session extended down to the lowest levels in three weeks testing 79.85. There is no buy signal under 80.05, only the vulnerability to the slide extending down to 79.40, which can be avoided by immediately recovering back above 80.05.

Eurodollar Mar Contract (EC, ETF: (FXE)) Despite Thursday’s intraday recovery not gaining traction above 1.2950, and despite reversing most of Friday’s fresh highs from 1.3000, Tuesday’s open gapped up to a fresh high and extended higher to 1.3085. That essentially retraces last Wednesday’s capitulation sell-off, which is natural resistance. Its recovery would be bullish, because it is more difficult and so less likely.

Gold Feb Contract (GC, ETF: (GLD)) Bouncing sharply to 1583.00 from last week’s 1524.00 lows did not gain traction. Bouncing further Tuesday almost to 1609.00 came closer, nearly recovering the 1610.50 sell signal that had set the decline in motion. Closing under 1593.50 Wednesday would at least signal the bounce had ended, if not also reverse momentum down. But that may be the last opportunity for either.

Silver Mar Contract (SI, ETF: (SLV)) Tuesday’s gap up above Friday’s 28.46 high immediately overcame any likelihood for retesting last week’s lows. The rally extended sharply higher to 29.43, where the last downleg originated, probably robbing the pattern of volatility for a couple of days.

30-year Treasury Mar Contract (US, ETF: (TLT)) Friday’s probe above 144-18 had not prevented a reversal down, and probably made it more likely. Sell signals were raised to 144-09. Tuesday’s big drop down to 143-01 proved that buyers had gained no traction. But a close Wednesday back under the original 143-04 bounce limit is still needed to prove that sellers are regaining traction.

Crude Oil Mar Contract (CL, ETF: (USO)) The 103.00 was target met Tuesday, and then retested while RSIs diverged negatively. But it was not rejected — not, yet. The setup (technical deterioration at resistance) is not in itself a sell signal. It does, however, require the rally to extend higher uninterrupted to prevent a decline from gaining traction. And extending higher uninterrupted could suddenly challenge the $111 area.

Natural Gas Mar Contract (NG, ETF: (UNG)) Tuesday’s fresh low at 2.96 was recovered to close in positive territory. That is not the signal for a bottom and recovery which still requires closing above 3.09, but it’s a start.

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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 bounced big into the weekend, into year-end, building on Thursday’s reaction up from new lows. But no relevant resistance was recovered, and plenty of unfinished business below was left outstanding to keep the sell-off alive into the New Year.

Dollar Basket Mar Contract (DX, ETF: (UUP, UDN)) Wednesday’s recovery above 80.40 had targeted 80.85 which was met by noon, and 81.25 which was met before Thursday’s open. The complete retracement back down to 80.85 left outstanding the gap back up to Thursday’s 81.15 open to be filled. But that didn’t prevent Friday’s session from drifting lower — to 80.40. Its reaction up was already attacking 80.85, with 81.15‘s retest likely.

Eurodollar Mar Contract (EC, ETF: (FXE)) Thursday’s recovery had peaked upon filling the gap back to Wednesday’s close and probing it briefly to 1.2950-1.2965. Buyers gained no traction for that effort, but momentum did not reverse back down. Friday exploited the lack of a setup by drifting higher to 1.3000 resistance. But the year ended by drifting back down under the 1.2950-1.2965 range, with Thursday’s opening gap below at 1.2896 likely to attract price back down..

Gold Feb Contract (GC, ETF: (GLD)) Friday’s open gapped up to test Wednesday’s 1564.60 close, and extended up to 1582.80. That’s quite the distance from Thursday’s 1523.90 low. And it is 61.8% back to the prior week’s 1620.30 intraday high. The close fell back to 1565.00, holding 1568.00 resistance to maintain the bounce as a correction. Anyway, Island’s don’t launch durable reversals, only temporary, and the Island that from Friday’s session requires a retest.

Silver Mar Contract (SI, ETF: (SLV)) The decline’s initial target had been 27.90, which was met Wednesday on the way down to 26.14. Friday’s open gapped up to 27.90, and closed back at it, despite having extended higher intraday to 28.46. An attack on the lows is likely next, at least down to 26.50.

30-year Treasury Mar Contract (US, ETF: (TLT)) Two sessions spent testing the 144-18 bounce limit did not prevent another rally effort Friday morning. But the higher highs peaked at 145-08 and reversed back down to within 1 tick of 144-18. A reversal down remains likely, regardless of Friday’s extra probe higher — and more so because of it.

Crude Oil Mar Contract (CL, ETF: (USO)) Having held 99.00-99.40‘s pullback limit Thursday, the pattern only awaits a new rally leg gaining traction to target a test of 103.00. Friday wasn’t it. The open gapped down to test Thursday’s lows, then recovered enough to fill the gap back to Thursday’s 99.85 close. Repeated attempts to probe higher failed, so another test of 99.00-99.40 is possible. But fresh highs above 99.85 should extend sharply higher.

Natural Gas Mar Contract (NG, ETF: (UNG)) Drifting lower Friday to $3 didn’t change the 3.09 trigger for a rally. But drifting lower on a Friday did make a rally leg more difficult since this market tends to duplicate Friday’s action Monday morning. The New Year’s holiday may buck that influence, but leaving a gap outstanding back to Friday’s new low close won’t allow a durable rally to form.

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Today’s Highlight Currencies hit their precise targets as the product of steep overnight moves. Their reactions retraced entirely back to the prior session’s close. But no further. Volatility is alive and well.

Dollar Basket Mar Contract (DX, ETF: (UUP, UDN)) After Wednesday’s surge to the 80.85 target, Thursday’s open immediately fulfilled the next higher 81.25 target, then reversed back down to 80.85. Session lows stopped short of probing Wednesday’s last relative lows, preventing sellers from gaining traction and keeping alive potential to retest 81.25 intraday.

Eurodollar Mar Contract (EC, ETF: (FXE)) Sharply lower lows overnight bottomed upon testing the 1.2870 target. Its reaction up peaked upon testing the 1.2975 bounce limit. Even if that was the low, the immediate reaction up has left outstanding a gap back to the 1.2895 open that should be retested. Back under 1.2925 would signal the low’s retest underway.

Gold Feb Contract (GC, ETF: (GLD)) The plunge extended overnight to attack its 1520.00 target within $4. Bounces had potential up to 1547.50, which was being tested Thursday afternoon. Dips have room down to 1536.00 before gaining traction to become a more substantial decline. But no buy signal could begin forming from under 1555.00. And meanwhile, there is potential for one more downleg targeting 1595.50-1506.00.

Silver Mar Contract (SI, ETF: (SLV)) The drop’s 26.30 target was exceeded briefly at Wednesday night’s low. Its recovery back to and through 27.40 filled the gap back to Wednesday’s close. Retesting the regular session’s 26.59 opening gap would help to form a bottom.

30-year Treasury Mar Contract (US, ETF: (TLT)) Wednesday’s rally to 144-18 was retraced Thursday down to only 143-27. That was short of 143-18 and 143-12 whose breaks would signal a new downleg underway. Wednesday’s reaction up probed a fresh high, but 144-18 held as resistance to keep alive the topping potential along with the 143-18 and 143-12 sell signals.

Crude Oil Mar Contract (CL, ETF: (USO)) Thursday’s dip used the room for correcting down to 99.00-99.40 — and then some — recovering to close back above both. There is no reason to further delay a rally leg up to 103.00, unless there is not going to be a rally leg up to 103.00.

Natural Gas Mar Contract (NG, ETF: (UNG)) The potential for sealing a bottom failed to trigger its 3.21 signal. The decline extended down sharply to a fresh low. Another pattern formed that also has potential to seal a bottom, but it requires surging back up through 3.09 Friday. Otherwise, the trend trend remains down.

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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 not currencies. Sure, the morning’s action was unusually extreme, albeit long-awaited. But it was brief, and not unexpected. Meanwhile, Natural Gas has finally neutralized an important attraction below, allowing me to calculate a buy signal.

Dollar Basket Mar Contract (DX, ETF: (UUP, UDN)) Five days of ranging narrowly compensated Wednesday for the delay in resuming the rally. Compensated, with a vengeance. A surge above the 80.40 signal almost immediately met the 80.85 target. Its test was not rejected, and a second consecutive higher close Thursday would confirm the probe above 81.25 is underway.

Eurodollar Mar Contract (EC, ETF: (FXE)) Wednesday’s drop extended back to lower-end of the past week’s trading range. And then through it. Outstanding gaps below were filled, and probed. This leg’s next objective is to test 1.2870, potentially down to 1.2650, so long as 1.2975 is not recovered.

Gold Feb Contract (GC, ETF: (GLD)) Closing under 1598.00 Tuesday essentially renewed Thursday’s sell signal that triggered under 1610.50, keeping in-play 1575.50. Its test did not consolidate for long before plunging further to 1557.60, then later to test 1551.00. Bounces should now hold any test of 1568.00 to maintain the decline’s momentum, next targeting 1520.00. Closing above 1575.50 would signal instead that the bottom was in, and an aggressive upleg was underway.

Silver Mar Contract (SI, ETF: (SLV)) Wednesday’s plunge to the 27.90 target extended down to test 26.90. The decline’s momentum remains intact and next targeting 26.30 so long as 27.40 holds any test as resistance. A break under 26.30 would be very bearish, but also very difficult.

30-year Treasury Mar Contract (US, ETF: (TLT)) Testing the 143-04 bounce limit Wednesday already expended a great deal of energy from Tuesday’s 142-13 close. Much more energy was expending probing it intraday up to 144-16. Although the bounce far exceeded expectations, it did peak (so far) upon retracing 61.8% of the drop from 146-08. The bounce could extend up to 145-06 before considering it to be more durable than only a bounce. Otherwise, back under 143-18 and 143-12 would resume the decline.

Crude Oil Mar Contract (CL, ETF: (USO)) Tuesday’s 101.88 high was never probed Wednesday before price tumbled down to 99.25. The 99.40 pullback limit ultimately held through the close to maintain the rally’s momentum. But closing under 99.00 Thursday would undermine the rally, and start to reverse momentum down.

Natural Gas Mar Contract (NG, ETF: (UNG)) Dec 19’s 3.15 opening gap was finally retested Wednesday. Its test included a probe of fresh lows for good measure. There is now no unfinished business below. Its first reaction up to 3.21 has already retraced back under prior lows. Closing Thursday back above 3.21 would be credible for sealing a bottom. The weekly EIA report is scheduled, and pessimism ahead of it would also be optimal.

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