Daily Spot

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

Today’s Highlight Nobody expects the… Spanish Inquisition! And nobody expects Gold to tumble $70 in two days. Otherwise, it wouldn’t have rallied high enough to be able to tumble so far, so quickly. Entering the new year in rally mode fulfilled the recent buy signal’s objective, but the quick rejection is surprising, nonetheless.

Dollar Basket Mar Contract (DX, ETF: (UUP, UDN)) The extended 80.55-80.75 target was probed early Friday to almost 81.00. The balance of the session ranged flat-to-lower, but never turned negative, so no sell signal is yet calculable.

Eurodollar Mar Contract (EC, ETF: (FXE)) The extended 1.3035 target was probed down to 1.3005, reversing intraday to close slightly positive above 1.3075. Not extending the decline immediately Monday would allow a corrective bounce up to 1.3180.

Gold Feb Contract (GC, ETF: (GLD)) Thursday’s post-close tumble under 1675.00 needed to hold 1662.00 to maintain any bounce potential. The drop was otherwise vulnerable to extending down, but not necessarily sharply. The overnight to fresh lows at 1626.00 wasn’t predicted. It is a shock to the system that will require being absorbed. Bounces should hold 1652.00-1657.00, and probing any higher would be considered a short-entry opportunity.

Silver Mar Contract (SI, ETF: (SLV)) Friday’s new low testing 29.25 is a shock to the system that will need to be absorbed before a buy signal can form. There is meanwhile room for noise down to 29.00.

30-year Treasury Mar Contract (US, ETF: (TLT)) Thursday’s extended drop not only confirmed 143-30 being in-play, but also limited the extent of a corrective bounce. The target was met early Friday down to 143-17. A bounce up to 144-21 Friday afternoon has pretty much used up all available room before extending down to the next target area at 142-26/143-06

Crude Oil Feb Contract (CL, ETF: (USO)) Not having extended the rally Thursday, a deeper pullback became likely. Its 91.25 pullback limit was attacked down to 91.52. The recovery to close positive should not delay extending the rally to fresh highs.

Natural Gas Jan Contract (NG, ETF: (UNG, UNL)) Strength on Friday’s EAI release was subdued, still leaving no actionable parameters.

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

Today’s Highlight What the cliff giveth, FOMC taketh away… Gold’s surge to new relative highs was retraced entirely Thursday. The precious metal fell in-line with currencies like the Euro. Each is testing relevant support, so any delay in reversing up would suggest another downleg coming.

Dollar Basket Mar Contract (DX, ETF: (UUP, UDN)) Thursday’s gap up to the rally’s 80.20 target later extended sharply higher to test 80.50, targeting 80.55-80.75.

Eurodollar Mar Contract (EC, ETF: (FXE)) Wednesday’s close under 1.3195 gapped down Thursday, and then later extended through its 1.3080 target. The drop can extend to 1.3035 or 1.2965 so long as 1.3145 is not recovered.

Gold Feb Contract (GC, ETF: (GLD)) Not extending up immediately Thursday made a correction likelier down to 1675.00. Thursday’s open gapped down to test it. The FOMC Minutes triggered another downleg back to “lower prior highs” at 1662.00. Just closing above 1663.00 keeps alive potential for retesting 1675.00, or even probing above it to 1690.00. But resuming the rally is premature, as is rejecting the prior rally leg.

Silver Mar Contract (SI, ETF: (SLV)) Thursday’s reaction to FOMC Minutes extended the morning’s drop under 31.00, but only to 30.40, still above “lower prior highs.” A recovery remains credible so long as 30.25 holds as support.

30-year Treasury Mar Contract (US, ETF: (TLT)) Extending down Thursday confirms Wednesday’s steep drop. It also creates potential for a corrective bounce up to 145-08 while lower lows at 143-30 are in-play. Closing above 146-00 would suggest a bigger bounce underway.

Crude Oil Feb Contract (CL, ETF: (USO)) The reaction down from Wednesday’s high did not extend lower Thursday as the market ranged narrowly sideways. A corrective dip to the gap below at 91.80 could be tested down to 91.25 would suggesting the rally had ended.

Natural Gas Jan Contract (NG, ETF: (UNG, UNL)) Wednesday’s gap down to new lows was not rejected Thursday. Fresh lows were probed without extending down, but there is no active signal.

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

Today’s Highlight Now that this fiscal cliff business has been settled once and for all (right?), and year-end mark-to-market influences are moot, markets can get on with their true intent (right?). I wonder whether the true intent in Natural Gas is to bring all potential sellers out of the woodwork. Wednesday’s gap down to new lows suggests as much.

Dollar Basket Mar Contract (DX, ETF: (UUP, UDN)) Despite initially weakening in reaction to the fiscal cliff vote, 79.50 support held again to produce another fresh high, with 80.20 still in-play.

Eurodollar Mar Contract (EC, ETF: (FXE)) The gap up in reaction to the fiscal cliff vote was reversed into negative territory testing 1.3165. So long as 1.3195 is not recovered, 1.3080 is now in-play.

Gold Feb Contract (GC, ETF: (GLD)) Monday’s rally extended to higher highs with Wednesday’s gap up and test of 1695.50. Near-term momentum cannot delay recovering 1693.00 to resume the rally and avoid a pullback to 1675.00.

Silver Mar Contract (SI, ETF: (SLV)) Monday’s hesitation did prove to be bullish from a contrarian perspective by gapping up Wednesday. New hesitation upon testing 31.50 might also be bullish, but its reaction down to test 31.00 support must recover back above 31.40 without further delay Thursday to test the 31.65 target on this leg.

30-year Treasury Mar Contract (US, ETF: (TLT)) Monday’s drop to 147-00 support gave way easily in reaction to the fiscal cliff vote, cratering Wednesday to 145-13. Having round-tripped all of the prior two-week 3-point rally, a second consecutive lower close would confirm that this leg is next targeting 143-30.

Crude Oil Feb Contract (CL, ETF: (USO)) Wednesday’s fresh high up to 93.87 retained enough gain intraday to confirm Monday’s breakout close above above 92.00. The next higher target is 95.15, presumably on the way to 99.00.

Natural Gas Jan Contract (NG, ETF: (UNG, UNL)) Despite buyers not gaining traction for any recent gaps down — as was evidenced by testing prior highs Monday — Wednesday’s open gapped down sharply to fresh lows. While the pattern may become an Island by gapping up Thursday, there is still nothing compelling about positioning long this market before a signal is triggered.

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

Today’s Highlight Mark-to-market influences for tax purposes can influence the last session’s price action. But Gold’s rally Monday seems very much in-line with expectations.

Dollar Basket Mar Contract (DX, ETF: (UUP, UDN)) Monday’s choppy sideways ranging kept alive potential to test 80.20, which would put into play higher targets.

Eurodollar Mar Contract (EC, ETF: (FXE)) After Sunday night’s temporary strength, Monday’s session ranged almost exclusively in negative territory. Friday’s 1.3325 close was still being tested, and not broken. Back under 1.3195 should trigger a delayed decline targeting 1.3080, but there is otherwise potential for fresh highs to test 1.3325.

Gold Feb Contract (GC, ETF: (GLD)) Having earned one extra day to make its case, the recovery began Monday by gapping up above 1660.00, and then extended higher to 1681.00. Just recovering 1675.00 was the minimum requirement, so a second consecutive higher close Wednesday would confirm a major recovery underway.

Silver Mar Contract (SI, ETF: (SLV)) Monday afternoon’s surge above last week’s 30.20 prior highs did not touch last week’s 30.501 prior high. If the hesitation is bullish — which it is, potentially, from a contrarian perspective — then the recovery should not hesitate extending higher Wednesday.

30-year Treasury Mar Contract (US, ETF: (TLT)) Monday’s blip-up peaked just under Friday’s 148-25 pre-open high before reversing down sharply to 147-03. There is no bullish reason for this retracement, and closing under 147-00 would signal signal momentum reversing down.

Crude Oil Feb Contract (CL, ETF: (USO)) Friday morning’s retest of 91.30-91.40 prior highs suggested that a distributive top was not forming. Monday’s fresh highs attacked 92.00. A second consecutive higher close Wednesday would confirm.

Natural Gas Jan Contract (NG, ETF: (UNG, UNL)) Friday’s recovery had stopped pessimistically short of extending to fresh highs. That didn’t prevent gapping down Monday, instead of extending higher. But there was no breakout to confirm, so buyers aren’t undermined. And gapping down Monday did not gain traction — in fact, it filled the gap back down to Thursday’s close. Above 3.45 would qualify as a breakout.

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

Today’s Highlight Not yet extending its first recovery leg, Gold had become vulnerable to reversing down sharply. That it fell only slightly Friday does keep the door open for another day.

Dollar Basket Mar Contract (DX, ETF: (UUP, UDN)) Friday’s gap up to fresh highs peaked short of touching the 80.20 target, and spent the session ranging narrowly around the rally’s 79.79 prior target. A close above 80.20 is still required to put into play any higher objectives.

Eurodollar Mar Contract (EC, ETF: (FXE)) Despite gapping down well under 1.3225, Friday’s session largely ranged narrowly around 1.3225. Closing under it would still launch a new downleg targeting 1.3080.

Gold Feb Contract (GC, ETF: (GLD)) Exploiting the recovery back above 1657.00 was long overdue. Friday’s dip may have helped by stretching the rubber band back under 1657.00. But a rally above 1663.00 to at least 1675.00 and higher is the least to expect if a downleg isn’t underway already.

Silver Mar Contract (SI, ETF: (SLV)) Since Friday’s session was spent entirely under 30.25 prior highs without extending down, its recovery through any close should launch a rally leg targeting 31.65.

30-year Treasury Mar Contract (US, ETF: (TLT)) An overnight dip to 147-23 recovered back to Thursday’s148-17 high into Friday’s open. An afternoon dip only attacked 148-00 instead of breaking it to trigger a downleg.

Crude Oil Feb Contract (CL, ETF: (USO)) Friday’s retest of Thursday’s high suggests that not confirming Wednesday’s breakout wasn’t distributive. There is still room down to 89.30 before suggesting that sellers may be retaking control.

Natural Gas Jan Contract (NG, ETF: (UNG, UNL)) The week’s “ineffectual pessimism” had suggested the interim rally attempts were actually chipping away at resistance. Friday’s open gapped up to 3.40 and attacked prior highs around 3.50. Plenty of time was spent hovering under prior lows to reflect more “ineffectual pessimism.” Not extending higher immediately Monday would be very bearish for not being able to exploit the bullish setup.

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