Daily Spot

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

Gold Dec (GCZ) The 1365.00-1372.00 bounce target’s lower-end had been retested after Monday’s close. Its first test had pushed back before Monday’s open. This made a test likely of the range’s upper-end, too. World events overnight facilitated the test, which extended through the cash session.

The range’s 1372.00 upper-end served as support to a consolidation through Tuesday afternoon. RSIs diverged negatively into the retest. A close back under 1372.00 would signal that buyers had lost traction. Closing under 1365.00 would signal momentum reversing down.

If sellers can’t gain traction soon, then the bounce could extend to test 1395.00. There is room for noise around 1395.00 up to 1399.00, and any higher would target 1409.00. World events are attracting buyers that are artificially driving price higher, and any lull or perceived resolution would help to pop the bubble.

Dollar Basket Dec (DXZ) Time had all but expired for a fresh high to be part of extending the rally. A new high was required, but its delay was starting to suggest it would be only obligatory. Tuesday’s reaction to world events did produce the fresh high. Now the rally must extend higher without delay to prevent Double Topping with last week’s high.

30-year Treasury Dec (USZ) Monday’s test of 128’14 was missed by 1 tick, but Tuesday’s gap up compensated for it. Closing back under 128’14 would have robbed buyers of their traction, but a close under 128’03 is needed to signal momentum had actually reversed back down. If sellers don’t gain traction, there is potential to 130’12-130’16.

Crude Oil Jan (CLF) It was still too soon for a new downleg to begin, so Tuesday’s gap down to 80.55 was recovered up to 82.00. The recovery did not gain traction, but neither did sellers. The new downleg is not yet signaled, but it is free to begin.

Natural Gas Dec (NGZ) Tuesday’s gap down probed under 4.17, but the balance of the session trended up to 4.26. The gap back to Monday’s 4.27 narrowly avoided being filled, keeping optimism in-check to avoid becoming too extended and vulnerable to reversal.

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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) Friday’s delay in resuming the rally made sense after Sunday night’s dip on news of Ireland’s bailout. When Ireland’s deal seemed to flounder, the Dollar’s  recovery made sense since last week’s rally had been confirmed.

What won’t make sense is if new highs don’t print without delay. At least, it won’t make sense in the context of an ongoing rally. The recent breakout and confirmation are owed a fresh high. And it’s getting a little late for that fresh high to be assured of resuming the rally. It is risking being no more than a retest of the confirmation’s high, to form a Double Top.

Leaving the fresh high outstanding while price dips back into the prior consolidation could help to launch another rally leg. Overnight dips before Friday and Monday’s sessions did try as much. But the recovery potential is not helped by ranging narrowly intraday for another session.

Gold Dec (GCZ) The lower-end of the 1365.00-1372.00 bounce target was met overnight within 20 cents Sunday night during the Ireland bailout’s initial currency moves. It was retested after Monday’s close. Revisiting it after the interim pushback suggests that the 1372.00 upper-end will be tested, too.

30-year Treasury Dec (USZ) The 128’14 bounce target was nearly met Monday. Its test remains likely.

Crude Oil Jan (CLF) Monday’s fresh low under 80.70 did offer an intraday buying opportunity, as 80.68 was recovered to 81.80. The consolidation is otherwise still in-play.

Natural Gas Dec (NGZ) Monday’s open often extends the character of Friday’s action in Natty Gas. The open’s gap up was entirely appropriate. The bullish scenario then required only a close above 4.17. In fact, its intraday dip recovered to new recovery highs. The next higher target at 4.40 is in-play so long as pullbacks hold 4.17 as support.

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

Dollar Basket Dec (DXZ) Thursday’s gap down had failed to recover intraday, but it didn’t extend lower, so it qualified as “ineffectual pessimism.” But its pent-up buying pressure wasn’t released Friday, despite recovering into the open from an overnight dip to fresh lows. Tuesday and Wednesday’s confirmed breakout still owe the market at least one fresh high above 79.60. Delaying the rally’s resumption past Tuesday’s open would suggest buyers had lost momentum.

Gold Dec (GCZ) Thursday’s bounce initially extended higher overnight, peaking $2 short of touching the 1365.00-1372.00 bounce target’s lower-end. The shallowness is in-line with weak hands sponsoring the correction, before a more concerted effort by strong hands triggers the next downleg targeting a break under 1320.00.

30-year Treasury Dec (USZ) Friday’s session-long rally wasn’t very productive except for avoiding a downdraft. That’s impressive enough considering the gap back to Wednesday’s 126’30 close was filled early. The long bond tends to repeat Friday’s action on Monday, so further modest improvement is likely. An attempted downleg probably would not be credible until the current bounce first tests 128’03 and preferably 128’14.

Crude Oil Jan (CLF) The spread between Dec and Jan contracts is about 45 cents. The drop’s target equates to 81.75-82.50, and its bounce target is 83.75. Thursday’s bounce to 82.90 was a reaction to having overshot the target Thursday. Monday should react similarly to Friday’s “ineffectual pessimism.” Its open gapped down and the entire session developed in negative territory without trending down. A fresh low Monday under 80.70-81.00 would likely be a buying opportunity.

Natural Gas Dec (NGZ) Thursday’s bullish recovery had finished just short of confirming Wednesday’s breakout, despite probing Wednesday’s highs. Friday compensated for the delay by gapping up and extending higher. The original recovery leg’s 4.17 target is being retested, and Friday’s higher high is essentially a breakout – the rally’s durability relies almost entirely on printing and maintaining higher highs Monday.

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

30-year Treasury Dec (USZ) The retest of 126’00 as support follows yet another shallow bounce. The last two bounces resolved in new lows at their targets without a trapping longs to refuel the decline. Either selling pressure is about to end abruptly, or bigger selling pressure pressure coming into the market.

If it is the former, that selling pressure is running dry, then pent-up buying pressure will fuel a corrective rally with potential to 130’25. But even if it is the latter, that new selling sponsorship is being attracted, then a bounce still has room to test 128’03-128’14. And a bounce should test 128’03-128’14 as resistance at some point.

The next break lower would target 124’16-124’20 regardless of its origin. Its test would be a defining moment for the long bond, whose sell-off would either be overdone, or just getting started.

Dollar Basket Dec (DXZ) Tuesday’s confirmation of Monday’s breakout allowed Wednesday’s dip to refuel buyers. Thursday’s extra dip wasn’t necessary, but it doesn’t invalidate the rally. Its opening gap down to support never extended lower intraday, suggesting that the dip was corrective, and leaving the rally free to resume.

Gold Dec (GCZ) Having filled the 1337.60 gap Tuesday and then having held it Wednesday, a corrective bounce targeting 1365.00-1372.00 became possible. Thursday’s gap up to the 1357.00 area was a good start. But any further bounce should be equally aggressive to be a correction.

Crude Oil Nov (CLZ) Wednesday’s steep drop had exceeded the 81.30-82.00 target all the way back to last month’s prior lows. The excess selling pressure triggered created a vacuum above, which triggered a gap up Thursday to quickly test 82.00. The bounce should also test 83.35 before being able to resume the decline to new relative lows.

Natural Gas Nov (NGZ) Wednesday’s breakout needed the confirmation of a higher close Wednesday. But Wednesday’s open gapped back down and extended lower. Although the entire drop was recovered to probe Wednesday’s highs, Wednesday’s highs held as resistance on a closing basis. Another intraday dip that recovers to fresh highs would be more bullish than to immediately extend higher.

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

Crude Oil Nov (CLZ) The 81.30 target (highlighted green) had been met already well ahead of Wednesday’s open. The cash session tested it anyway, and probed it down to 80.00.

This also tests the Double Top’s interim consolidation. While its eventual break is likely, which would put into play the next lower target, it has yet to be influential. A lot of selling pressure has been expended aggressively since topping at the 88.45 target. And now the lower-end of a consolidation is being probed, without there being any interim corrective bounce.

Double Tops with interim upsloping consolidations are accidents waiting to happen. The path lower may be delayed, and this is an opportune time for that. But the pattern’s ultimate resolution is down.

Natural Gas Nov (NGZ) Monday’s open or close could have retraced all of Friday’s loss (from horizontal green solid line). Tuesday’s open could have sufficed. But Friday’s loss has been recovered too late to reject Friday’s loss.

A rally can no longer be a reaction to the decline. It must be wholly of its own accord. The price trigger happens to be the same – a close above 3.92 – but the pattern has changed. Two days of consolidating under 3.92 have created a new pattern.

Wednesday’s gap up to and through 3.92 Monday or Tuesday would have signaled the downleg recovering. Recovering it Wednesday means a new upleg may be forming. Being the first day of a breakout (not a reaction), a second consecutive higher close is needed to confirm. Not confirming Thursday, after all of the extra selling pressure, would be bearish.

Dollar Basket Dec (DXZ) Monday’s breakout and Tuesday’s confirmation had bought the rally an opportunity to retrace and refuel buyers. Reaching an important target Tuesday helped. Wednesday’s dip was relatively shallow, especially on a closing basis. A further dip may be required Thursday morning. But the rally should be trying one more time otherwise.

Gold Dec (GCZ) The filled gap at 1337.60 didn’t indicate that sellers were losing traction. Price action there simply did not reflect accumulation. A bounce of some sort to some degree still seems likely before resuming the decline to target a retest of October’s 1320.00 lows.

30-year Treasury Dec (USZ) Tuesday’s rally didn’t much improve Wednesday, but neither was it rejected. And its session high stopped just short of filling the gap outstanding from Friday’s close. The corrective bounce should still extend up to 128’03-128’14, possibly higher, before the decline resumes.

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