Daily Spot

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

[pay]Gold Dec (GCZ) Gold’s uptrend remained intact so long as two consecutive sizable drops were avoided. Alternatively, a big intraday probe of new highs could signal the trend ending, if the probe were reversed by the close or the following day.

Two recent sizable intraday drops (circled red) found support upon testing 1239.00. A lower close would have signaled momentum reversing down. Instead, Tuesday rallied sharply higher,  up nearly $30 at its intraday peak.

The failed Head & Shoulders pattern (highlighted red) projects either to a 100% swing at 1275.00 or 200% at 1293.00. Now that at least one was met intraday, a close back under 1256.50 would reject the two prior highs, and rob buyers of their traction. A close under 1239.00 would still be needed to signal momentum reversing down.

30-year Treasury Dec (USZ) Monday’s key-reversal extended higher Tuesday, leaving outstanding the gap back to Monday’s 129’16 open. Back under 131’04 would signal the downleg had resumed.

Dollar Basket Dec (DXZ)  Monday’s substantial drop extended down Tuesday to confirm that momentum had reversed down. A close back above 81.50-81.65 would signal that the downleg was correcting with a bounce, first.

Crude Oil Oct (CLV) Friday’s rejection of Thursday’s rejected rally bought the pattern time through at least Wednesday morning. Any downleg attempted before then would be suspicious.

Natural Gas Nov (NGX) Monday’s ranging around Friday’s high didn’t prevent trending up Tuesday. But it did prevent the trending from extending, knocking it down from above 4.00 to under 3.85. Recovering from the intraday probe of one more fresh low – even if still above 3.80 – would allow a more credible rally effort.

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Weekly Spotlight coverage’s 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]As this post’s title implies, I’m reinstating and expanding my coverage of other markets. Each day will focus on a different complex (the schedule is at the bottom of each post). Soon more coverage within each complex will be added, and Softs will be added on Fridays.

[pay]Dollar Basket Dec (DXZ) The Dollar’s drop had gotten ahead of itself. Prior lows (red dashed line) were being probed despite having failed to confirm a break lower from two days earlier. A corrective bounce was likely, either to 82.88-82.98, or to 83.18-83.29.

The latter limit was riskier because any higher would have triggered a more substantial recovery underway. But it was tested, it held with only pennies to spare, and it resolved down sharply.

The resulting pattern formed a Head & Shoulders (defined below) whose 161.8% target would retest August’s low around 80.60. Head & Shoulders patterns tend to be more productive than that, making 80.20 or 79.55 likelier.

The pattern’s drop requires no specific schedule, and a bounce back to 82.75-82.80 is possible before extending down. But a valid decline would delay bouncing until after Tuesday, which would otherwise prevent Monday’s break from being confirmed by a second consecutive lower close.

30-year Treasury Dec (USZ) Probed lower lows but didn’t close lower. Immediate drop Tuesday would be credible for extending down.

Crude Oil Oct (CLV) Friday’s rejection of Thursday’s failed breakout was extended higher Monday. Sellers should be marginalized through Wednesday morning.

Natural Gas Nov (NGX) Friday’s gap up got ahead of itself, and Monday’s fresh high only ranged round Friday’s high. A pullback would help to refuel buyers for a more durable rally. Extending higher first would be suspicious.

Gold Dec (GCZ) Last week’s second big intraday dip bounced from testing the prior big dip’s low around 1239.00. Closing any lower for two consecutive days would seal a top, targeting at least 1216.00-1218.00.

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Weekly Spotlight coverage’s 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]As this post’s title implies, I’m reinstating and expanding my coverage of other markets. Each day will focus on a different complex (the schedule is at the bottom of each post). Soon more coverage within each complex will be added, and Softs will be added on Fridays.

[pay]30-year Treasury Dec (USZ) Wednesday’s lackluster session had failed to extend Tuesday’s rally. Stronger Jobless Claims Thursday started the day weakly by gapping down. A weak 30-year auction was only a formality.

Friday’s dive had gotten ahead of itself, and almost any excuse would be enough to trigger a retest of its low. Closing under 131’22 would have signaled the downleg’s resumption – that’s where Thursday’s open gapped down from Wednesday’s close above 132’00.

The 128’14 target is in-play so long as 131’06 holds tests as resistance. But the decline’s resumption only allows for one test. Although the recent bounce above 131’22 was allowed time to regroup, this leg is different, as is not a reaction to a bigger drop.

Crude Oil Oct (CLV) The growing likelihood for a bigger probe of resistance was fulfilled at Thursday’s open. Its vulnerability to closing negative was fulfilled at the close. There may be a little time and room for a brief morning bounce to retest the $25 area as resistance. But the decline’s resumption should be underway by late morning for optimal credibility.

Natural Gas Nov (NGX) The negative reaction to EIA followed the perfect path for a false break lower to trap shorts and to reverse momentum up. In other words, there’s no excuse not to extend higher without delay. Tuesday and Wednesday’s inside days had made a false break likely. The morning’s dive tested prior lows and yet still managed to close above Friday and Tuesday’s lows. Any early strength Friday would be credible for extending higher.

Dollar Basket Dec (DXZ) Wednesday’s drop was a little too early to resume the decline. Thursday’s bounce takes off some of that pressure. There’s no requirement to extend down into the weekend.

Gold Dec (GCZ) Thursday’s deep drop wasn’t substantial enough to to fulfill the character of resuming the decline at this stage of the pattern. A failed probe of fresh highs, or a second consecutive drop, would signal that sellers were in control.

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Share your questions and comments in this blog post’s Comments section, or during the chartroom’s What’s Next morning market tour, and in the day’s end Markets on Close…

Weekly Spotlight coverage’s 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]As this post’s title implies, I’m reinstating and expanding my coverage of other markets. Each day will focus on a different complex (the schedule is at the bottom of each post). Soon more coverage within each complex will be added, and Softs will be added on Fridays.

[pay]Crude Oil, Oct (CLV): A two-week old, $3.60 corrective bounce lasted only three days. But it was the longest and largest of a nearly $13, three-week long drop. The bounce long ago stopped gaining ground, but it has yet to resolve down.

Rather, a narrowing range has repeatedly probed the consolidation’s ~75.00 upper-end. A gap under 72.00 remains outstanding (circled red) to attract price back down. But its attraction cannot prevent more probes above ~75.00. Closing back under 73.25 would warn the decline had resumed, signaled under 72.75.

This week’s EIA report is delayed until Thursday due to Monday’s holiday. A more serious probe above 75.00 that is reversed through the close – or through Friday’s close – should extend the reversal to new lows.

Natural Gas, Nov (NGX): A long, drawn-out decline to new lows reached a critical target at its low. Sideways ranging since then has twice tested the low, once holding a probe below it.

A gap outstanding to Friday’s 4.16 close was left outstanding by Tuesday’s gap down. Wednesday’s inside day already undermines the credibility of any trending attempted Thursday. EIA reporting mid-morning is a likely catalyst to spark a trending attempt whose durability can reveal the sponsorship’s strength.

Intraday weakness below prior lows would probably need time into next week to be absorbed, regardless of whether it were recovered through the close. A failed intraday rally would make one more new low likely.

Dollar Basket, Dec (DXZ): Tuesday’s rally to resistance at 83.25 (basis Dec) retraced immediately to test 82.85-82.95 support. Its break on a closing basis would trigger the decline’s resumption, extending into a new downleg.

30-year Treasury, Dec (USZ): Ranged narrowly.

Gold, Dec (GCZ): Second consecutive inside day while testing resistance. Trending attempted from an inside day is often proved to be a false breakout. Such a probe of higher highs would fit the narrative of an extended corrective bounce, so long as the probe failed to hold through the close or through Friday’s open.

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Share your questions and comments in this blog post’s Comments section, or during the chartroom’s What’s Next morning market tour, and in the day’s end Markets on Close…

Weekly Spotlight coverage’s 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]As this post’s title implies, I’m reinstating and expanding my coverage of other markets. Each day will focus on a different complex (the schedule is at the bottom of each post). Soon more coverage within each complex will be added, and Softs will be added on Fridays.

[pay]Gold, Dec (GCZ): New highs are not a sell signal. And the rally from July’s drop has retraced enough that new highs may be only a formality. Extending higher from there, instead of simply probing fresh highs, is unlikely.

Extending back to the highs now being tested was also unlikely. This current leg should be only a corrective bounce, a bear market rally. Its eventual resolution was likely to resume the bull market. But the pullback into July’s lows stopped short of its target.

Two recent sessions (circled green) have gapped and/or spiked down – suddenly, sharply and substantially – only to be recovered intraday. Their gaps/spikes down created pent-up buying pressure, which was neutralized that day. But sellers both times failed to exploit the vulnerability.

This suggests at least one surge / gap / spike up to follow. Its reaction would identify when momentum is ready to reverse down. Closing under the surge’s origin or its prior low would be one example. Otherwise, I am only monitoring this market for a new pattern.

Crude Oil: Tuesday’s weak morning tested 72.75 support whose break would signal a new downleg underway. The test held so that the gap back to Friday’s close could be filled. The gap held as resistance. Having chipped away at support, the next attack on 72.75 is likely to break lower.

Natural Gas: Tuesday’s open gapped down to test the decline’s low close. It held, and produced a bounce. The bounce stopped pessimistically short of filling the gap back up to Friday’s close. Any close above the 4.16 area would be credible for reversing momentum up.

30-year Treasury: The long bond’s gap open reflected holiday improvement that already tested the 131’22 bounce limit. It was exceeded while stocks fell. Perhaps the test will be a two-day affair instead of one. Regardless, a close back under 131’22 is needed to signal the decline has resumed.

Dollar Basket: The Dollar gapped up and trended higher to come within 2 cents of its 82.85-82.96 bounce limit’s upper-end. Closing any higher would signal a last leg up to new highs underway. There’s room down to 82.55-82.65 before signaling momentum has reversed down into a new downleg.

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Share your questions and comments in this blog post’s Comments section, or during the chartroom’s What’s Next morning market tour, and in the day’s end Markets on Close…

Weekly Spotlight coverage’s schedule is: Currencies (Mon), Metals (Tue), Energies (Wed), Rates (Thu), Softs (Fri, coming).