Daily Spot

A weekly summary of one complex, including daily updates of other developments elsewhere.[pay]

Gold Feb (GCG) Tuesday’s reversal extended down sharply Wednesday to 1372.10. This left outstanding Tuesday’s 1427.40 opening gap up above prior highs that requires its eventual retest.

A close under 1381.00 would have signaled a new downleg underway. If the drop from Tuesday’s high into Wednesday’s low was not a new downleg, but just a correction of the upleg – even if the correction’s recovery were going to hold as expected – then 1381.00 had to hold as support. No matter how deeply it was tested intraday, or how many times, it had to hold as support if Tuesday’s opening gap up were going to be retested.

It did hold, so this should be the lower-end of the range. The upper-end of the range is a recovery back up to Tuesday’s 1427.40 opening gap up and potentially also a fresh high at 1436.50. Then a more durable downleg can begin.

Dollar Basket Dec (DXZ) Tuesday’s recovery extended higher at Wednesday’s open. The balance of the day ranged sideways. There is room down to 79.70 without sellers gaining traction for any more substantial correction. But the rally’s resumption still requires closing above 80.50-80.70.

30-year Treasury Mar (USH) Tuesday’s 2-point intraday drop under prior lows was a breakout. Despite its significant drop, it still required confirmation from a second consecutive lower close Wednesday. It did confirm. With sellers entrenched, there is room for a bounce with potential to 123’06 or 124’00. This is even likelier since so much selling pressure has been expended. Regardless, the 119’14 next lower target is in-play. The monthly 30-year Treasury auction is at 1:00pm ET Thursday.

Crude Oil Jan (CLF) Tuesday’s retest of the prior day’s lows was still in process at the close. It extended down Wednesday, but held 87.50 and ended testing the prior day’s lows. Sellers haven’t gained traction despite expended a lot of energy. A retest of Tuesday’s 90.65 opening gap up is likely, and could form a more durable top.

Natural Gas Jan (NGF) Gapped up Wednesday and closed at a new recovery high. This followed overnight weakness that touched the 4.31-4.35 pullback objective. There is no required unfinished business below to prevent extending the rally. EIA reports at 10:30am ET.

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Daily Spot coverage schedule is: Currencies (Mon), Metals (Tue), Energies (Wed), Rates (Thu), Softs (Fri, coming).

A weekly summary of one complex, including daily updates of other developments elsewhere.[pay]

Crude Oil Jan (CLF) Failing to fully form a buy or sell signal tends to default to being the opposite. So it was with Monday’s bearish Pivot Reversal, which recovered in the afternoon to trigger a buy signal. Tuesday’s gap up to new highs fulfilled the signal, and the balance of the day dipped back into Monday’s range.

Closing Tuesday under Monday’s low would have triggered a sell setup. Monday’s low was probed, but it held on a closing basis. Another sell setup that failed to full form, making it another buy signal.

90.50 is my highest calculable target, and it was fulfilled by Tuesday’s opening gap up. Tuesday’s 90.65 opening gap should be retested regardless of its resolution. Fulfilling the test and closing negative under 88.40-88.70 would trigger a sell signal.

Natural Gas Jan (NGF) Monday’s gap up created unfinished business back down to Friday’s 4.33  close. Its gap is likely to be filled, at least back down to 4.36, before a credible rally can begin. It was partially filled Tuesday, as was appropriate for the pattern. A rally at Wednesday’s open would be premature, but a close above 4.48-4.51 would get a benefit of the doubt for triggering a new rally leg.

Dollar Basket Dec (DXZ) Gapping down to probe Friday’s low Tuesday quickly bottomed and bounced back into positive territory. A dip back to 79.50 would allow the recovery to refuel without sellers gaining traction. No dip is required, and the next higher bounce objective is 80.50-80.70.

Gold Feb (GCG) Gapping up Tuesday above prior highs was quickly rejected back into negative territory, turning $16 gain into $13 loss. The afternoon ranged around 1407.00 for potential to launch a retest of Tuesday’s 1427.40 opening gap, with potential also to test 1436.50. Closing under 1398.00 at any time – even without first retesting Tuesday’s high – would signal momentum reversing down, initially targeting 1381.00.

30-year Treasury Mar (USH) Monday’s “ineffectual optimism” up to 125’12 was resolved by gapping down under 124’18 Tuesday. It extended down sharply to fulfill the 123’02 target, probing it down to 122’09. Being the first day of a breakout under prior lows, a second consecutive lower close Wednesday would signal a durable downleg underway. Its initial target would be 119’14 and potentially 117’14.

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Daily Spot coverage schedule is: Currencies (Mon), Metals (Tue), Energies (Wed), Rates (Thu), Softs (Fri, coming).

A weekly summary of one complex, including daily updates of other developments elsewhere.[pay]

Dollar Basket Dec (DXZ) Having dragged a 1-2 day correction into 2-1/2 days, A recovery Monday wasn’t likely. So the open’s gap up quickly peaked, and was retraced to fill the gap back to Friday’s close. Now a more substantial and durable recovery would be credible, but might not begin until Wednesday’s open.

Gold Feb (GCG) Despite holding at its 1407.00 bounce target through Friday’s close, Monday’s open gapped up and extended higher. The intraday extension was retraced, so buyers did not gain traction for their efforts. But sellers have yet to exploit this, and can regain traction only by gapping down Tuesday. Otherwise, extending the rally would next target new highs at 1436.50.

30-year Treasury Mar (USH) Monday’s opening gap up consolidated briefly at 124’18 before firming into the noon hour. It was an inside day (contained entirely within the prior day’s range) to indicate its sponsorship was weak hands. It trended up, indicating that the weak hands are optimistic, which is bearish from a contrarian perspective. The pattern remains likely to resolve down and resume the decline..

Crude Oil Jan (CLF) A gap down recovered to probe fresh highs, then reversed back under the open’s low. This is the basis of a Pivot Reversal setup, but it ultimately failed to form all but the final element by recovering into the close. A failed sell signal becomes a buy signal, making higher highs likely. The setup isn’t ideal because of Sunday night’s higher highs, so failing to maintain higher highs at Tuesday’s close would be bearish.

Natural Gas Jan (NGF) Unlikely to begin trending from a standing stop on Mondays, gapping up was suspicious after Friday’s ranging. In fact, the session only ranged narrowly after gapping up. The gap back down to Friday’s close should be filled, but the pattern remains likely to launch a new rally leg.

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Daily Spot coverage schedule is: Currencies (Mon), Metals (Tue), Energies (Wed), Rates (Thu), Softs (Fri, coming).

A weekly summary of one complex, including daily updates of other developments elsewhere.[pay]

Dollar Basket Dec (DXZ) The Employment Situation report’s surprise raises the risk of printing more dollars. That extended the pullback to a third day. Dropping sharply into a late-morning low. That specific Friday action delays a serious recovery attempt until either Monday afternoon or Wednesday.

Gold Feb (GCG) The corrective bounce’s momentum remained intact despite buyers not gaining traction for their efforts. Filling the gap back to 1407.00 remained possible so long as sellers did not push back. Friday’s reaction to the Employment Situation report met the next objective, which held as resistance through the close. A close under 1398.00 would signal again that buyers gained no traction. A close under 1381.00 would signal momentum reversing down to trigger a new downleg.

30-year Treasury Mar (USH) After gapping down to a new relative low at 124’18, the Employment Situation report triggered a spike up to 125’22. But no more than an obligatory bounce off 124’18 was possible, so the session eventually fell back to the open’s low. The new low close for the week and 124’18‘s influence confirm the trend remains down.

Crude Oil Jan (CLF) The bubble-like rally’s momentum remained intact so long as 87.50 was broken as support. Higher highs probed 89.00. The rally’s momentum remains intact so long as 88.40 holds as support, its next higher objective being 90.40. A close under 87.90 would signal momentum reversing down.

Natural Gas Jan (NGF) Friday’s choppy sideways range held another dip to recover back above 4.31. Sideways ranging Monday morning would be appropriate for the pattern’s timing, whose next rally leg should begin either Monday afternoon or Wednesday.

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Daily Spot coverage schedule is: Currencies (Mon), Metals (Tue), Energies (Wed), Rates (Thu), Softs (Fri, coming).

A weekly summary of one complex, including daily updates of other developments elsewhere.

30-year Treasury Mar (USH) Last week’s attack on 124’18 (circled green) came close enough to require its test. The interim bounce above the prior high (highlighted yellow) made 124’18‘s eventual test likely to break lower. Monday’s “ineffectual optimism” (circled red) confirmed that buyers had not gained traction.

The return to 124’18 should not produce more than a brief, shallow bounce. The hesitation to break lower immediately is understandable considering Wednesday’s big gap down and sizable intraday slide expended a lot of selling pressure.

Breaking under 124’18 would next target 123’02-123’06. The longer that a break is delayed, the likelier that its break would be steep.

Dollar Basket Dec (DXZ) Wednesday’s gap down started the corrective drop immediately after Tuesday’s “ineffectual optimism” had warned it was coming. This made it likely to last only 1-2 days. Thursday’s 80.11 low didn’t recover 80.50-80.70, which would have signaled the rally’s resumption. Closing above 80.70 Friday would indicate the pullback had ended.

Gold Feb (GCG) Wednesday’s two probes above Tuesday’s highs didn’t gain traction. This was in-line with Tuesday afternoon’s signal that buyers had not gained traction, while sellers had not signaled a reversal. Thursday’s probe of yet higher highs also retraced back under Tuesday’s highs, which was also in-line with buyers not having gained traction, while awaiting a reversal signal from sellers. A higher high has potential to fill a gap back to 1407.00, but it would likely be rejected very harshly. And any close under 1381.00 would signal momentum already reversing down.

Crude Oil Jan (CLF) Potential for extending to 87.10 was met overnight after Wednesday’s open rejected Tuesday’s sell signal. RSIs diverged negatively to trigger a weaker open. That was recovered for the balance of the session to trend up to 88.00. Either a reversal down triggered under 87.50 will end the week, or a break above 88.50 will extend the rally through Tuesday morning.

Natural Gas Jan (NGF) Thursday’s gap up extended Wednesday’s recovery. While that was not inappropriate for the pattern, it was bad timing for the EIA report. Natty Gas tends to be wrong when it is optimistic or pessimistic ahead of EIA. In fact, its market did react negatively. But the reaction filled the gap back to Wednesday’s close and held on a closing basis. It’s bullish action, but Friday’s action may be more about consolidating the week’s volatility.

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Daily Spot coverage schedule is: Currencies (Mon), Metals (Tue), Energies (Wed), Rates (Thu), Softs (Fri, coming).