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 Big reversals among currencies tried Friday to undo their recent corrections and consolidations. They may have tried too hard. We’ll know by Monday’s close or Tuesday’s open whether there was any follow-through, or if the recent trending will resume.

Dollar Basket Sep Contract (DX, ETF: (UUP, UDN)) Friday’s bounce tested the 83.35 resistance whose break as support had put into play 81.85. Holding its resistance through Monday’s close would be likely to resume the decline.

Eurodollar Sep Contract (EC, ETF: (FXE)) Friday’s gap down to fresh lows closed under the decline’s 1.2180 target that had held previously. A second consecutive lower close Monday would be very bearish. There may be that challenge, this being a market that tends to duplicate Friday’s action on Monday morning.

Gold Aug Contract (GC, ETF: (GLD)) Friday’s gap down to test 1573.00 reacted back up quickly to test 1584.50 resistance. It held, and like Thursday, the balance of the day only ranged around Wednesday’s 1583.00 high. The intraday low stopped optimistically short of touching Wednesday’s low, suggesting that buyers are impatient. If sellers are weak hands, the pattern is likely to resolve down unless fresh highs above 1592.00 are recovered with no further delay.

Silver Sep Contract (SI, ETF: (SLV)) Friday’s gap down back to the week’s lows under 26.75 was retraced entirely to again test 27.25 resistance. Recovering from the repeated dips has been “ineffectual optimism” while chipping away at support. Any further delay to rallying would all but ensure trending down.

30-year Treasury Sep Contract (US, ETF: (TLT)) Thursday’s intraday bounce to 151-04 had peaked pessimistically short of filling the gap back to Wednesday’s close before reversing back down to close Thursday at 150-18. That was potentially bullish from a contrarian perspective, underscored by Friday’s big gap up above Wednesday’s close that extended higher to test 152-00. The bounce is still targeting at least 152-06, whose recovery would put back into play 153-04.

Crude Oil Aug Contract (CL, ETF: (USO)) Thursday’s surge allowed room for a pullback to 91.09, which was tested Friday to as low as 90.66 intraday before holding through the close. The gap back up to Thursday’s 92.70 close should now try to attract price higher and resume the rally.

Natural Gas Aug Contract (NG, ETF: (UNG, UNL)) Friday’s session trended up to fresh highs at 3.08. This third higher close fulfills the minimum requirement for the two prior sessions’ breakout and confirmation. It should extend higher anyway, since this is a market that tends to duplicate Friday’s action on Monday mornings.

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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 Thursday’s wild intraday swings resembled freshly caught fish thrashing about on the dock. Bonds and the Dollar are trying to avoid breaks lower, while Gold and the Euro are looking for a second chance to rally. Meanwhile, Crude Oil continues swimming upstream to escape.

Dollar Basket Sep Contract (DX, ETF: (UUP, UDN)) Thursday’s gap down to fresh lows reacted back up temporarily into positive territory. That didn’t prevent reversing back down to fresh lows at 82.80. The 81.85 target remains intact so long as Thursday’s 83.25 high is not recovered.

Eurodollar Sep Contract (EC, ETF: (FXE)) The warning after Wednesday’s third consecutive intraday recovery was for an opening surge to a fresh high that would react back down. Wednesday’s gap up above prior highs did reverse almost immediately into negative territory. The dip was recovered to trade out the day unchanged, so another rally effort should gain traction.

Gold Aug Contract (GC, ETF: (GLD)) Recovering 1584.50 would have signaled that Wednesday’s fresh low had finally expended all available selling pressure. It was probed intraday, but ultimately held to close back under Wednesday’s high. This is distributive action, and any rally requires gapping up above Thursday’s 1591.50 high.

Silver Sep Contract (SI, ETF: (SLV)) Thursday’s gap up testing 27.50 was reversed into negative territory instead of extending higher to trigger the 27.75 buy signal. The parameter remains intact.

30-year Treasury Sep Contract (US, ETF: (TLT)) Wednesday’s narrowly ranging inside day was likely initially to break falsely in one direction, and then reverse in the opposite. Thursday’s open gapped down sharply, and the session closed negative despite bouncing intraday into positive territory. The open’s gap down did support the negative close, so recovering above the 151-04 interim high would trigger a rally targeting at least 152-06.

Crude Oil Aug Contract (CL, ETF: (USO)) Firming modestly Wednesday to test 90.00 required the rally to start extending higher aggressively if a deeper pullback was to be avoided. Thursday’s open gapped up sharply and extended higher to attack 93.00. The rally targeting 94.55 and 100.15 remains intact so long as 91.10 holds as support.

Natural Gas Aug Contract (NG, ETF: (UNG, UNL)) Thursday’s second consecutive higher close confirmed Wednesday’s breakout above 2.89, next targeting 3.26.

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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 Did Natural Gas finally breakout? A second consecutive higher close Thursday would confirm. A second consecutive higher close Thursday had better confirm, because a false breakout can react sharply in the opposite direction, and this is not a healthy place for that.

Dollar Basket Sep Contract (DX, ETF: (UUP, UDN)) Wednesday’s gap up repeated the recent pattern of reversing back down to current lows. That same pattern included not extending down to fresh lows. A break lower is still likely, but must be obvious by Friday’s open to help prevent a shallow fresh low from recovering.

Eurodollar Sep Contract (EC, ETF: (FXE)) Eventually, recovering from intraday dips only has the cumulative effect of chipping away at support, if none of those intraday recoveries ever recovers above a prior high. This situation has arrived, with yet another gap down Wednesday that could not even recover to unchanged levels. Closing under 1.2235-1.2255 would trigger a new downleg. Meanwhile, any firming above 1.2300 should extend sharply higher to test 1.2395.

Gold Aug Contract (GC, ETF: (GLD)) Wednesday’s open probed another fresh low for the week down to 1567.20. Its reaction up peaked at a 61.8% retracement back to recent highs. It was an inside day, contained completely within the prior session’s range, so a fresh relative high above 1584.50 should extend sharply higher. The alternative to further delaying another upleg would be to resume the decline to new lows.

Silver Sep Contract (SI, ETF: (SLV)) No fresh high was attempted Wednesday, let along a probe above the 27.75 buy signal. The parameter remains alive.

30-year Treasury Sep Contract (US, ETF: (TLT)) Tuesday’s gap down and lower close did not extend down Wednesday. The session’s inside day only ranged narrowly sideways. The 151-18 buy signal was only attacked and not touched, so it remains intact.

Crude Oil Aug Contract (CL, ETF: (USO)) Wednesday’s session firmed modestly throughout to fresh highs testing 90.00. The rally should start extending higher aggressively if it intends to avoid a deeper pullback to 87.40.

Natural Gas Aug Contract (NG, ETF: (UNG, UNL)) Tuesday’s session had finally suggested that impatient buyers were no longer involved. This allowed Wednesday’s open to surge through the 2.89 buy signal and extend higher to test 3.00. The rally remains intact so long as 2.89 holds as support, and the breakout still requires confirmation by a second consecutive higher close Thursday.

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Today’s Highlight Crude Oil keeps on trucking to new recovery highs. Tuesday’s gap up above prior highs recovered entirely from dropping well into negative territory in reaction to Bernanke’s testimony. Can the Euro be far behind?

Dollar Basket Sep Contract (DX, ETF: (UUP, UDN)) Despite closing under its 83.35 sell signal Monday, reaction to Bernanke’s comments Tuesday triggered a surge that filled the gap back to Monday’s 83.67 opening gap up. And the 83.35 still ultimately held as resistance to keep 81.85 in-play.

Eurodollar Sep Contract (EC, ETF: (FXE)) A steep sell-off on Bernanke’s comments from 1.2290 to 1.2197 was recovered fully into the afternoon. Potential remains alive for extending up at least to 1.2395. Recovering this extra dip makes even higher highs likelier.

Gold Aug Contract (GC, ETF: (GLD)) Despite dropping sharply Tuesday morning to 1571.00 on Bernanke’s comments, the gap back up to Monday’s 1591.80 close was filled. Higher highs that had printed overnight to almost 1599.00 should be retested, which should also help to resume a rally to 1623.00-1624.00. Closing under 1582.00 would still signal momentum reversing down.

Silver Sep Contract (SI, ETF: (SLV)) A fresh low down to 26.72 was retraced entirely back up to recent resistance at 27.38. The repeated saves should be rewarded by some higher high, increasing chances for testing 27.75 and extending higher through 28.25 to 30.00-30.35.

30-year Treasury Sep Contract (US, ETF: (TLT)) Gapping down Tuesday back to Friday’s 151-04 close robbed Tuesday’s breakout of its traction. A bounce up to 151-18 resistance pushed back to fresh lows testing 150-26. Any lower close would have sealed a top, but there is otherwise still potential for testing 151-24, whose recovery would resume the rally.

Crude Oil Aug Contract (CL, ETF: (USO)) Gapping up to test 89.25 could not avoid detouring back under the 88.00 prior high in reaction to Bernanke’s testimony Tuesday. But the entire dip was recovered to fresh highs attacking 89.50, maintaining the 91.00 target so long as 87.40 support is not broken.

Natural Gas Aug Contract (NG, ETF: (UNG, UNL)) Tuesday’s narrow, depressed ranging helps to drain optimism out of the pattern that might have been inhibiting a recovery. But, a close above 2.89 still needs to trigger.

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Today’s Highlight Gold and the Euro extended higher immediately Monday, after first gapping down. Gold underperformed by failing to recover positive territory, suggesting that the Euro’s bounce will be only a temporary correction.

Dollar Basket Sep Contract (DX, ETF: (UUP, UDN)) Despite Monday’s open gapping up, the morning’s exit was probing under 83.35 support, putting into play 81.85 so long as a negative close is repeated Tuesday.

Eurodollar Sep Contract (EC, ETF: (FXE)) Monday’s early dip held another test of 1.2180 support. All post-open price action trended up to fulfill the bullish requirement for there being no delay in resuming Friday morning’s recovery. In fact, the morning’s recovery extended into positive territory above Friday’s highs. At least 1.2395 should be tested on this leg.

Gold Aug Contract (GC, ETF: (GLD)) Friday’s bounce from last week’s 1555.00 target was not resumed immediately at Monday’s open, which gapped down. But the open’s gap down did hold its test of 1582.00 to prevent sellers from gaining traction, by recovering almost immediately back up to Friday’s close. Any potential for extending the rally still depends upon all intraday action being obviously biased-upward — almost no pullback can be tolerated by the pattern at this stage.

Silver Sep Contract (SI, ETF: (SLV)) Friday’s bounce did not extend any higher Monday, but the open’s retracement of Friday’s gains was recovered almost entirely. Since the bounce still had room up to 27.75 before failing, and since the intraday recovery hesitated pessimistically before filling the gap back to Friday’s close, there remains potential for extending higher on a close above 27.75.

30-year Treasury Sep Contract (US, ETF: (TLT)) Friday’s dip was not so abrupt as to suggest it was sponsored by strong-handed sellers, and it held 151-00 support, leaving the 153-04 target intact. Monday’s open gapped up and extended to fresh highs at 152-10. Pullbacks now have room down to 151-19 without jeopardizing the rally’s momentum.

Crude Oil Aug Contract (CL, ETF: (USO)) Monday’s flat open then firmed intraday to test the previous highs at 88.00. The afternoon probed fresh highs that should extend higher to 91.00 so long as 87.62 now holds as support.

Natural Gas Aug Contract (NG, ETF: (UNG, UNL)) Holding 2.89 resistance Friday once again kept the following session (i.e. Monday) from extending higher. No other parameter is active.

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