Bigger Picture

A daily summary of high-profile members of several complexes… View a more detailed discussion of each chart at the end of today’s Market Wrap.

Eurodollar Dec Contract (EC, ETF: (FXE, UUP))
Although Monday’s rally is only likely to probe higher and not necessarily required, gapping down Tuesday is not the rally’s appropriate end. Higher highs remains likely so long as the 1.0680 pullback limit holds.

Gold Feb Contract (GC, ETF: (GLD))
Tuesday’s shallow intraday weakness nonetheless finished under the 1172.50 pullback limit. A recovery has no excuse to further delay extending higher, let alone closing back above 1180.00 to launch a substantial upleg.

Silver Mar Contract (SI, ETF: (SLV))
Tuesday was essentially an inside day, hovering at Monday’s highs and above 16.70 which must hold to maintain the bullish pattern.

30-year Treasury Mar Contract (US, ETF: (TLT))
Dipping slowly Tuesday didn’t resume the decline, so much as undermine it, all but requiring a more obvious dip back to and through the lows — which remains likely so long as 151-22 isn’t recovered.

Crude Oil Jan Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Gapping down to test the 50.50 pullback limit Tuesday never recovered nor resumed the rally, but the pullback limit held. Now in addition to the next higher objective outstanding at 52.75, the gap back up to Monday’s 51.55 close is likely to be filled.

Natural Gas Jan Contract (NG, ETF: (UNG, UNL))
Probing fresh highs Tuesday up to to 3.73 was not maintained as price dipped back into Monday’s range. This a dangerous area for the rally to lose momentum, as it fills an outstanding gap back up to October’s prior highs. The next reaction down should be sudden, steep and substantial, likely to test 3.60, which must be rejected almost immediately to maintain the rally’s momentum.

A daily summary of high-profile members of several complexes… View a more detailed discussion of each chart at the end of today’s Market Wrap.

Eurodollar Dec Contract (EC, ETF: (FXE, UUP))
The potential Euro bottom I have been pointing was in jeopardy when Italy’s vote triggered a plunge back through prior lows down to 1.0510. But already recovering at the open had isolated the overnight drop. And gapping up then extended to fresh highs testing 1.0802. The wide outside day does help to suggest a bottom is forming, but it can also expend all near-term available buying pressure and need a corrective dip.

Gold Feb Contract (GC, ETF: (GLD))
Sunday night’s reaction to Italy’s referendum triggered gap up and extension to test the range’s 1190.00 highs before reversing to probe under 1166.00 again down to 1158.60. The pattern remained bullish so long as 1166.00 was recovered through the close, and in fact the gap back up to Friday’s 1177.00 close was tested Monday afternoon. Extending any higher now requires pullbacks to hold 1172.50.

Silver Mar Contract (SI, ETF: (SLV))
Gapping up and testing 17.05 overnight on Italy’s vote was reversed down sharply to 16.55 Monday morning. But recovering into the close reached new intraday highs testing 16.95, just 10 cents under the overnight low, still suggesting a new upleg is underway.

30-year Treasury Mar Contract (US, ETF: (TLT))
An overnight surge to 151-19 on Italy’s vote was reversed to greet Monday’s open back down at 149-22. Extending to 149-11 bounced to test 150-25 — again — bordering on overkill for retesting resistance instead of already exploiting that it has held multiple tests.. Back above 151-22 could suggest the downside is already done.

Crude Oil Jan Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Sunday night’s strength and Monday’s modest gap up ultimately ranged sideways at or above Thursday’s prior high, attacking the 52.75 target to within 30 cents. The trend remains up so long as 50.50 holds as support.

Natural Gas Jan Contract (NG, ETF: (UNG, UNL))
Friday’s pullback under 3.48 to 3.37 was recovered to fresh highs Sunday night, which extended back up to and though Thursday night’s 3.57 high to 3.65. The action is very impressive, but cannot afford to hesitate extending higher as it is testing natural resistance back to October’s high gap at 3.67.