Daily Spot

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

Gold Dec (GCZ) Monday morning’s dip was too shallow to refuel buyers. Extending down to 1380.00-1381.00 (red line) would have trapped shorts for a more durable upleg. That didn’t prevent the session’s recovery from extending higher Tuesday. But it did prevent Tuesday’s higher high from gaining traction.

The 1420.00-1421.00 target was met overnight, and had pushed back down before the Tuesday’s open. RSIs diverged negatively when it was retested intraday. Eventually the Dollar’s recovery and rumblings about reducing the size of QE2 weighed heavily. Te last hour plunged $18 to 1405.60. Post-close action dived another $23 to 1382.20.

This may constitute the 1380.00-1381.00 pullback to allow a retest of Tuesday’s 1417.80 opening gap up (circled green). So long as 1420.00-1421.00 is not recovered, a drop from there would be expected to gain traction for a bigger drop targeting 1338.00-1342.00 (circled red) and new lows under 1320.00 (highlighted red).

Dollar Basket Dec (DXZ) A dip back into Friday’s range to test 76.65 as support was preferred before recovering to signal a rally leg underway. Tuesday’s dip was shallower than preferred. But it did probe under Monday’s lows before recovering back above Monday’s highs, which is a valid continuation signal. A new rally leg appears to be underway so long as 76.65 is not broken as support. Mind the talk coming out now that suggests QE2 may be scaled back, or not.

30-year Treasury Dec (USZ) The required probe under last week’s low and the prior week’s low finally developed Tuesday. Having delayed its test, the probe was likely to gain traction and extend to its next target at 128’14. Bounces have room back up to 129’24-130’00 without sellers losing traction. Don’t forget that Jobless Claims comes Wednesday this week due to the Veteran’s Day holiday on Thursday.

Crude Oil Nov (CLZ) Tuesday’s fresh high was retraced to close back under Friday and Monday’s high. The fresh high extended far enough that closing under 85.85 would have invalidated the next higher target at 88.40. Post-close action did dive back under the 86.45 prior target down to 85.48. Unless the reversal is rejected immediately Wednesday, the reversal down would be likely to unfold very quickly.

Natural Gas Nov (NGZ) The open’s gap up to fresh highs suggested that impatient buyers had returned. Cooler heads prevailed, and the gap back to Monday’s close was soon filled. A recovery back to session highs proved strong hands were in control. Monday’s breakout targeting 4.40 was confirmed by Tuesday’s higher close. Pullbacks have room down to 4.15 without buyers losing traction.

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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) Monday’s open gapped up above 77.00, whose recovery would signal momentum reversing up. But the balance of the day only ranged narrowly around 77.00.

This doesn’t really fulfill the spirit of triggering 77.00, since the close was essentially flat with the open. Sound familiar? This is identical to Thursday’s “ineffectual pessimism” that gapped down to new lows.

The similarity makes the entire three-day sequence one singular pattern. Rather than reversing up without delay, a little more backing-and-filling becomes likely. Closing higher Tuesday might get a benefit of the doubt if an intraday dip were absorbed in the process.

Regardless, simply having gapped up Monday was enough to confirm that last week’s dip was about fulfilling selling pressure, rather than sellers gaining traction for a  new downleg.

Gold Dec (GCZ) Extended higher after an opening dip that had put only minimum pressure on buyers, so the intraday recovery was the product of impatient buyers. A dip to 1380.00-1381.00 would have been more constructive. So, extending higher to 1420.00-1421.00 first would be that much less sustainable.

30-year Treasury Dec (USZ) Monday was essentially an inside day. It was not an inside day that trended down, despite trending down exclusively after the open’s surge. So it was really a non-event which doesn’t change, affect or alter the prevailing pattern. Still looking for a probe under last week’s low and the prior week’s low. And for all its delay, that probe is likely to be in the form of a new downleg.

Crude Oil Nov (CLZ) Friday had a chance to reject Thursday’s test of the 86.45 area’s target. It didn’t, and went out higher into the weekend to all but ensure higher highs Monday. And higher highs all but ensure the next higher objective is in-play at 88.45. A gap down might gain traction, but the presumption otherwise is that this upleg’s momentum remains intact.

Natural Gas Nov (NGZ) The 3.96-3.97 buy signal was already being probed overnight Sunday after Friday’s bullish intraday recovery. Monday’s open got through it nicely, and extended higher to a new recovery high close. The prior leg’s 4.17 target tested at the previous high might produce some obligatory resistance if retested. So long as 3.96‘s recovery is not rejected Tuesday and a higher close confirms Monday’s breakout, 4.40 is in-play.

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

Dollar Basket Dec (DXZ) Thursday’s “ineffectual pessimism” was also a breakout, awaiting confirmation from a lower close Friday. It wasn’t expected since ineffectual pessimism breakouts are unlikely to be confirmed. And it wasn’t. Coincidentally, Friday close right back at 76.65, which was the long-standing objective inhibiting the past month’s rally attempts. The pattern has done everything it needs to for creating a bottom, just waiting for 77.00‘s recovery to trigger a rally leg.

Gold Dec (GCZ) The rally extended, and no sell signal will be triggered without first closing back under 1380.00-1381.00. Higher targets have potential next to 1420.00-1421.00.

30-year Treasury Dec (USZ) The 1231’25 sell signal’s test at Thursday’s close launched another gap down. Its post-open spike down expended a lot of selling pressure but still failed to probe prior lows. That is required by prior signals, so any bottoming attempt prior to that is likely to fail.

Crude Oil Nov (CLZ) Thursday’s test of 86.45 could have fulfilled the pattern’s buying pressure. Thursday’s highs were probed overnight and into Friday’s close, so 86.45 was not rejected. Since a new high close on Friday in this market tends to extend into Monday, the next higher target at 88.40 is probably in-play. Gapping down Monday under 85.20 would instead trigger an Island Reversal.

Natural Gas Nov (NGZ) The pattern continues to behave bullishly, and smartly. Friday’s open gapped up, creating newly unfinished business below at the gap back to Thursday’s close. Then an intraday dip neutralized it, and the close recovered into positive territory, retesting the morning’s high. A close above 3.96-3.97 would signal the next rally leg is underway.

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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]

30-year Treasury Dec (USZ) After Wednesday’s FOMC reaction triggered a 3-point dive, the drop’s momentum allowed room for a bounce up to 130’26. This bounce limit was exceeded, but not by a little. It was exceeded by so much that the drop’s entire direction was jeopardized.

The bounce ultimately tested 131’25, the original sell signal. It was still being tested at the close, which means it was not recovered despite being in position to do so. A bullish signal could have triggered, and did not, which is bearish. I would not step in front of further gains, but immediate weakness Friday would help to confirm the bounce had ended.

Thursday’s bounce might also be considered last-minute optimism ahead of Friday’s Employment Situation report. Closing back under 130’26 Friday would signal the drop’s momentum had resumed.

The next lower objective is 128’14. Wednesday’s low stopped optimistically short of probing the prior low. And a probe of prior lows was already a requirement since the 131’25 sell signal (boxed red) had already broken and been confirmed (circled red).

Dollar Basket Dec (DXZ) Gapped down Thursday, to new lows, and ranged entirely in negative territory. But the close was essentially unchanged from the opening print, so the pessimism was ineffectual. Since Thursday’s new low close is a breakout, and a lower close Friday would confirm, Thursday’s ineffectual pessimism suggests Friday’s close won’t confirm. So, new lows Friday will be extra vulnerable to recovering and reversing into positive territory.

Gold Dec (GCZ) Gapped up above 1366.00, filled gap back to 1372.00 and sliced through prior highs. New highs are not a sell signal, and the surge can extend higher, but Tuesday’s low stopped optimistically short of filling nearby gap and Thursday’s open created new gap back down to Wednesday’s close.

Crude Oil Nov (CLZ) Thursday’s new high fulfilled the Compelx Triangle’s target (depicted in yesterday’s chart), so the pattern is now free to Double Top with October’s prior high. Thursday’s close was essentially flat with the open, so any weakness would be credible for extending down.

Natural Gas Nov (NGZ) The fourth consecutive session held 3.83-3.84 support to maintain the corrective pullback. The open’s optimism ahead of EIA is fairly reliable for being reversed sharply. Thursday’s was, all the way back down to 3.74, but sellers did not gain traction as the close recovered 3.83-3.84. Still need close above 39.6-3.97 to signal momentum reversing up.

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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 Nov (CLZ) Wednesday’s ranging around month-old 84.90 prior highs without extending higher has reflected restrained optimism to help avoid becoming overextended. The potential to probe prior highs more thoroughly depends upon avoiding a close under 83.55.

The interim consolidation sloped upward, which reflects optimism. This tends to expend buying pressure that is sorely missed just when it is needed most – now, trying to extend above the prior high.

Natural Gas Nov (NGZ) Three consecutive sessions now have tested the 3.83-3.84 pullback limit that keeps alive the potential for another upleg. A close above 3.96-3.97 would signal the next upleg underway, targeting 4.40. EIA reports Thursday morning.

Dollar Basket Dec (DXZ) The FOMC reaction spiked down sharply to new lows, which easily included a test of 76.65. Its retest into the close proves its relevance. And having held its test through the close allows a rally leg to begin without delay.

Gold Dec (GCZ) Wednesday’s open spiked up to retest 1363.00 that was quickly retraced. A $30 drop from 1357.00 preempted the afternoons FOMC reaction. The 1342.00 pullback limit was tested thoroughly into and out of the close. A downleg is free to begin.

30-year Treasury Dec (USZ) Tuesday’s attack on the 131’25 sell signal jeopardized the bearish pattern. So did Wednesday’s rally up to 133’00 ahead of FOMC’s QE announcement. A negative close was needed to maintain the bearish outlook. The news triggered a dive to 130’00. Bounces should now hold tests of 130’26 to maintain this leg’s momentum targeting 128’14.

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