Daily Spot

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

[pay]Gold Dec (GCZ) Monday’s recovery from Sunday night’s dip had managed only to fill its gap back to Friday’s close. Any other attraction above did not require a retest. Friday’s gap had to be filled because Monday’s regular open had already recovered back above prior lows, so its gap down did not damage the chart.

That is not the case with Tuesday’s open. It did gap under prior lows (highlighted red). There is no requirement to fill the gap back to Monday’s close (circled green).

Tuesday afternoon’s bounce chipped away at resistance, which remained from the last gap up (circled red). A bounce back to Tuesday’s opening gap around 1359.00 (dashed line) is still attractive for refueling sellers. It could be probed up to 1363.00-1366.00 – any higher would make a probe of prior highs likely before a much bigger downleg begins.

30-year Treasury Dec (USZ) Tuesday’s open gapped down after Monday’s bounce, but rallied from there to close above Monday’s high. The bounce has room up to 133’08-133’10 while still refueling sellers for a much bigger downleg.

Crude Oil Nov (CLX-CLZ) Friday’s close under 81.55 (basis Nov) had signaled that buyers had lost momentum. Monday’s gap up above 81.55 made one more probe of 84.00 possible first, if not likely. Monday’s bounce, although sizable, stopped short of 84.00. But its drop to 79.37 Tuesday confirmed the past two weeks have been all about topping. I’m rolling coverage to the Dec contract, whose price is essentially 65 cents higher than Nov. So this downleg’s objective is “lower prior highs” down to 77.75 before at least a corrective bounce.

Natural Gas Nov (NGZ) I am rolling coverage to the Dec contract. Tuesday’s inside day developed within Monday’s range, which was itself a break to new lows. This setup does not give buyers traction. But it does not prevent a corrective bounce, whose 3.98 target would likely trigger a drop that retests Monday’s 3.85 low. A close above 4.05 before then would suggest a bigger bounce underway.

Dollar Basket Dec (DXZ) Monday’s session-long retracement from gapping up had suggested a retest of last week’s lows was in-play. Tuesday’s gap up above Monday’s high, and its session-long extension higher, don’t prevent that. In fact, there is now more room to absorb bigger selling pressure. More so, the pattern does confirm that whatever the path, a significant bottoming pattern has been forming.

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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.

Dollar Basket Dec (DXZ) Yet another opportunity to bottom is unfolding. The bullish potential seems more assured for four reasons. Reasons 1 and 2 are that the pattern appears to be deciding between whether to form a durable bottom, or just a multi-week corrective rally. Reason 3 is the bearish patterns among various other currencies. Reason 4 is Gold’s outlook, covered below.

As for the Dollar index, Thursday’s 76.65 gap down was probed Friday, but the probe left no unfinished business below. Friday ended with a recovery to “higher prior lows.” Thursday’s opening gap, however, still requires a retest after testing higher prior lows – that is, if a durable bottom is forming.

Otherwise, a recovery is free to extend without further delay, but only temporarily for several weeks. Its resolution would be to resume the decline. Monday’s lack of follow-through to gapping up suggests a durable bottom will be attempted. Probing 76.65 but not recovering would suggest the near-term bearish potential is greater.

Gold Dec (GCZ) The path to retesting 1386.40-1388.00 included a potential detour down to 1352.50. It was attacked overnight to within 70 cents before recovering to fill the gap back to Friday’s 1371.60 close. The regular session never dipped under 1362.00. Optimism remains alive (as the inverse relationship with the Dollar keeps alive the potential to retest its lows before each reverses).

30-year Treasury Dec (USZ) Monday’s gap up left outstanding unfinished business back Friday’s 131’06 close. It also indicated that sellers are refueling for a bigger downleg, when extending to 130’10 could have drained sellers of their selling pressure.

Crude Oil Nov (CLX) Monday’s gap up rejected Friday’s close under 81.55. It was suspicious at the time, but the open made clear that near-term momentum was not extending down. The close probed 83.00, and 84.00 is likely also to be probed before sellers can regain control.

Natural Gas Nov (NGX) Gapping down to new lows on Monday and trending down, after Friday had done the same, is no way to form a bottom.

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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.

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Gold Dec (GCZ) The 1383.50 resistance was retested overnight Thursday and again into Friday’s open. It held both tests. The close was once again in the process of testing 1370.50 support instead of breaking cleanly under it. So there remains potential for this topping attempt to retest Friday’s 1386.20 opening gap, and Thursday’s early-morning ~1388.00 high. The path there might dip first to 1352.50.

30-year Treasury Dec (USZ) Thursday’s break extended sharply lower to test 130’26. This leg should include a test of 130’10. Bouncing first to test 131’22 would make 131’10 less likely to hold this first test as support.

Crude Oil Nov (CLX) Friday’s close under 81.55 suggests that buyers have lost momentum. It does not yet indicate a near-term top is in. A close under 81.00 would target 76.90, which could launch a retest of the recent highs above 84.00.

Natural Gas Nov (NGX) Another opportunity to reverse momentum up was seemingly lost by Friday’s gap down that extended to a new low close. The closing action was still in the process of testing Tuesday’s prior lows, but Natty Gas is not friendly historically to a Friday bottom. A substantial recovery Monday from probing new lows intraday would be very credible for reversing momentum up. There is otherwise no active pattern.

Dollar Basket Dec (DXZ) Friday’s new low was the product of gapping open down to Thursday’s low. This retest cannot be a permanent bottom since there was no interim touch of “higher prior lows,” but it can suffice for launching a substantial multi-week corrective bounce. A durable bottom would first retest Thursday’s 76.66 gap open. This would now be valid since the balance of Friday’s session did rally to test “higher prior lows.” Otherwise, simply extending higher to close above 77.60 would suggest a corrective rally was 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) Wednesday’s last-minute recovery was suspicious and needed some confirming price action Thursday. One example discussed was another dip under 133’06-133’08 support that also recovers into the close. That would have proved support was valid.

Instead, Thursday morning’s price action hovered optimistically above support. The problem was compounded by filling the gap back to Tuesday’s 133’22 close, and neutralizing its attraction. The bond was an easy target for sellers on the 30-year auction’s results, which triggered a spike down that ultimately settled under Wednesday’s lows.

There is no unfinished business above to attract price higher. Unless invalidated immediately by recovering 133’06-133’08, a Double Top is forming. The outstanding gap back down to 131’23 is attracting price down, although it is unlikely to offer anything more than obligatory support since it is the product of an excessively optimistic dip. The next major objective is essentially 130’20, whose break would put into play the outstanding 128’14 target.

Gold Dec (GCZ) Thursday’s gap up from Wednesday’s close around the 1370.50 target wasn’t likely to gain traction. In fact, the gap back to Wednesday’s close was filled. Nevertheless, avoiding a negative close does make the 1383.50-1388.10 overnight highs likely to be retested before the Complex Triangle’s 1326.00 lower-end is put into play.

Crude Oil Nov (CLX) The potential to retest the highs above 84.00 was fulfilled overnight. Intraday action Thursday didn’t retest overnight high, not that it needs to be. A close under 81.55 might be able to seal a top and reverse momentum down. Otherwise, still potential to probe 84.00 intraday.

Natural Gas Nov (NGX) Thursday’s opening gap down revealed a paradigm shift. Now the pattern was creating unfinished business above to help recover from lows. The pattern had entrenched a recovery by closing Wednesday above 3.65-3.67, which allowed room for selling to refuel buyers. In fact, the open’s dip to 3.59 was recovered back to 3.76. But that sold off to close within 3.65-3.67. A close above 3.76-3.77 would be credible for triggering a durable upleg.

Dollar Basket Dec (DXZ) Thursday’s gap down to new lows offered another case study in the consequence of a setup that doesn’t trigger at the close. An immediate session-long rally could have triggered a lengthy multi-week corrective bounce, but that door closed. Now a bottom must retest Thursday’s 76.66 opening gap after first bouncing to “higher prior lows” around 77.20-77.25. Otherwise, the downleg can extend.

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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.

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Crude Oil Nov (CLX) Wednesday’s gap up didn’t gain traction  -the afternoon was spent testing both a prior high and the 83.25 prior target – and that left an outstanding gap back to Tuesday’s close. These are bearish elements that will attract price back down. Eventually.

First, a retest of the 84.00 area is likely, possibly even a probe of new highs. The pattern has now formed a Complex Triangle, and potentially a Double Top with interim upsloping consolidation, either having a bearish resolution.

Natural Gas Nov (NGX) Wednesday’s open gapped up above 3.65-3.67 and extended higher to 3.77. The gap back to Tue close was filled by a mid-day dive to 3.63. With no unfinished business below, a reaction bounced up to 3.73 closing above  3.65-3.67.

Similar to Tuesday’s close that was still testing Friday-Monday’s “higher prior lows” as resistance, Wednesday’s close was in the process of testing two-week old higher prior lows. There being no unfinished business below, immediate strength is all but required, and would be credible for gaining traction to 4.10 and 4.28.

Gold Dec (GCZ) Extended pessimism had made higher highs likely, and Wednesday’s steep rally fulfilled all expectations and more. The gap back to last Thursday’s open and its prior highs were tested up to the 1370.50 target. And that was probed by$5, allowing room to test 1383.50 before fulfilling the Complex Triangle and reversing down.

30-year Treasury Dec (USZ) Wednesday’s close was amazing but not an amazing session. A gap down probed lower lows well under 133’06-133’08 – which could have been probed to no end intraday without consequence, so long as it was recovered on a closing basis. And it was, probed to no end and then recovered. Last-minute action is always suspicious, so follow-through Thursday would confirm whether the late recovery trapped shorts to squeeze higher for 135’20.

Dollar Basket Dec (DXZ) Tuesday’s ultimate rejection of Monday’s recovery attempt was rejected even further, retesting prior lows. At least, touching the upper-end of the structure that contained the low. The gap down and session-long ranging in negative territory is almost “ineffectual pessimism” (a new low intraday would have completed the setup). That’s enough for a recovery to begin, but it is not at all a signal that a recovery is beginning.

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