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 Wild rides in the Energy complex had different effects. While Crude Oil’s strong gap up was being rejected, Natural Gas was already gapping down sharply. Almost any strength in either one Wednesday could extend up sharply.

Dollar Basket Mar Contract (DX, ETF: (UUP, UDN)) Tuesday’s gap down filled the gap back to Friday’s 79.00 close. The balance of the morning trended back up to Monday’s 79.55 high. Having neutralized the attraction below (the outstanding gap), closing above Monday’s high could have triggered a rally. But holding its resistance through the close does maintain potential to probe one more new low.

Eurodollar Mar Contract (EC, ETF: (FXE)) Tuesday’s gap up was reversed quickly into negative territory, where the balance of the session ranged narrowly just under prior lows. Back above 1.3105 would target 1.3175, whose recovery would reinstate momentum targeting 1.3333. There is otherwise not currently a sell signal.

Gold Feb Contract (GC, ETF: (GLD)) Its 1746.00 target was met at Tuesday’s open, which was quickly reversed down sharply to probe negative territory. Positive territory was recovered through the close. Tuesday’s 1742.30 opening gap should still be tested before any durable downleg can begin, so long as 1728.50 holds as support… The April contract trades at a $2 premium to Feb, and I am rolling coverage forward on Wednesday.

Silver Mar Contract (SI, ETF: (SLV)) Tuesday’s probe of fresh highs was retraced into negative territory under Monday’s lows testing 33.00 support. Closing above 33.60 would trigger a new rally leg targeting 34.60, but almost any delay would extend the pullback to 32.00.

30-year Treasury Mar Contract (US, ETF: (TLT)) An overnight dip to 143-28 was recovered through Monday’s open and extended higher to probe the prior high’s 145-10 resistance. The new high close is officially a breakout that can be confirmed by a second consecutive higher close Wednesday, but it does not comport to a pattern. Meanwhile, probing 146-00 Wednesday and closing negative would signal momentum reversing back down.

Crude Oil Mar Contract (CL, ETF: (USO)) Despite Tuesday’s open gapping up sharply above Monday’s 99.63 high to 101.29, it was all reversed — and then some — back under Monday’s 98.40 low. Monday’s low was still being tested at the close, so sellers did not gain traction for their efforts, even after expending so much energy. But once again there is no bearish reason to further delay extending lower into a downleg. Any delay would again be bullish.

Natural Gas Mar Contract (NG, ETF: (UNG)) Monday’s retest of the rally’s 2.81 target was premature, and needed one more “scarry” dip to clean out sellers. Tuesday’s open complied by gapping down sharply to 2.55 and extending to 2.47. Now a close above 2.61 would trigger the next rally leg with potential for extending up to 3.03.

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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 Currencies began the day retracing all of Friday’s gains. They ended the day holding that retracement. The two-week old corrective moves remain intact, but their ends are nearing.

Dollar Basket Mar Contract (DX, ETF: (UUP, UDN)) Last week ended with two consecutive lower closes. The setup all but requires a third, but not necessarily the next day. A lower consecutive close was likely, since currencies tend to mimic Friday’s action on Monday mornings. But Monday’s open gapped up to Friday’s 79.52 high nonetheless. It was an “inside day” that developed entirely within Friday’s range, so buyers did not gain traction for their efforts. And so long as 79.85 is not recovered above, the gap back to Friday’s 78.99 close will need to be filled.

Eurodollar Mar Contract (EC, ETF: (FXE)) Friday’s ~1.3100 low was retested instantly by Monday’s gap down from Friday’s 1.3214 close. This was in spite of Sunday night’s high having probed above Friday’s high. The balance of the session ranged narrowly off of Friday’s lows. While avoiding a lower close did keep alive the potential for resuming the rally to its 1.3333 target, closing under Monday’s lows would not be helpful.

Gold Feb Contract (GC, ETF: (GLD)) Monday’s gap down never extended lower, and was shallow compared to Friday’s range. But despite coming close, session highs never filled the gap back to Friday’s 1734.50 close. The potential remains alive for fresh highs testing 1746.50 so long as 1724.50 holds as support.

Silver Mar Contract (SI, ETF: (SLV)) Gapping down at Monday’s open to test prior relative lows at 33.25 never extended lower. The balance of the day ranged sideways, barely touching Friday’s close. That much pessimism without gaining traction keeps alive the potential to probe fresh highs before a more durable downleg could begin.

30-year Treasury Mar Contract (US, ETF: (TLT)) Recovering all the way back up to 143-04 last week required the drop to resume without delay Monday — or else extend higher. And higher means potentially retesting the 145-10 highs. Monday’s open did gap up, and extend higher to probe 144-28 (up to 145-03) which is a proxy for 145-10. Closing under their 144’05 interim high would signal momentum already reversing down.

Crude Oil Mar Contract (CL, ETF: (USO)) Monday’s gap down and close under 99.40-99.75 suggests that Friday’s drop has gained traction. Monday’s interim high already filled the gap back to Friday’s close, so there should be no further delay to extending down if the reversal is valid. Any delay would suggest otherwise.

Natural Gas Mar Contract (NG, ETF: (UNG)) Monday’s high retested the rally’s 2.81 target. Nevertheless, it is still too soon to break higher, as the pattern is still consolidating last week’s volatility.

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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 Currencies extended their recent trending, probing above recent highs, while stocks fell to their range’s lower-end. Have currencies gotten ahead of the game, and coming into near-term extremes?

Dollar Basket Mar Contract (DX, ETF: (UUP, UDN)) Wednesday’s tepid probe of fresh lows for the week was extended lower nonetheless on Thursday. And now Friday has closed below the consolidation for a second consecutive session. This setup typically produces at least one more lower low. Also, currencies tend to duplicate Friday’s behavior on Monday morning, making fresh lows likely Monday morning. Recovering to close positive Monday after probing fresh lows could form a bottom. Otherwise, the trend remains down.

Eurodollar Mar Contract (EC, ETF: (FXE)) Although the open’s gap up to 1.3145 was retraced back down to Thursday’s 1.3104 close, Thursday’s 1.3186 high was eventually recovered Friday up to 1.3223. The rally’s 1.3333 target remains intact, with next resistance at 1.3285.

Gold Feb Contract (GC, ETF: (GLD)) Holding above 1719.00-1720.00 through Thursday’s close made the rally likely to extend to 1746.50. Slightly higher highs probing 1736.00 Friday still managed to close just above Thursday’s highs, keeping alive the rally’s momentum. Now the rally needs pullbacks to hold any test down to 1724.50.

Silver Mar Contract (SI, ETF: (SLV)) Friday’s opening dip was recovered to probe and close above Thursday’s highs. Having retested the rally’s 33.55 target intraday, and having ranged around Thursday’s high all Friday afternoon, the higher close does not signal the rally being ready to resume.

30-year Treasury Mar Contract (US, ETF: (TLT)) Friday’s opening gap down to 142-05 support was recovered to the 143-04 bounce limit. Its resistance needed to hold to for assurance that a new downleg was about to begin. But afternoon highs retested Wednesday’s 143-16 FOMC peak. Reversing back down under Monday under 143-04 would be credible for launching a new downleg. But not immediately rejecting Friday’s rally would make it likely to extend higher Monday.

Crude Oil Mar Contract (CL, ETF: (USO)) Friday’s choppy session maintained Thursday’s range. While that may seem neither bullish nor bearish, the burden of proof was on sellers to extend Thursday afternoon’s rejection of the morning’s gap up. The sell-off must now basically melt-down Monday to be credible, or else rally back to 103.00 and potentially to 111.00.

Natural Gas Mar Contract (NG, ETF: (UNG)) Friday morning’s flat ranging around 2.65 broke higher into the afternoon, and then again into the close, attacking the rally’s 2.81 target. Regardless, the rally is unlikely to resume without first testing 2.56, and preferably also 2.50 over the course of 2-3 days.

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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 follow-through to Wednesday’s steep moves should find profit-taking ahead of the weekend.

Dollar Basket Mar Contract (DX, ETF: (UUP, UDN)) Thursday’s bounce stopped short of testing 79.85, let alone recovering as would be necessary to signal momentum reversing up.

Eurodollar Mar Contract (EC, ETF: (FXE)) Wednesday’s break to fresh highs extended higher overnight for Thursday’s open to gap up and test 1.3186. But the balance of the session dipped back down to test Wednesday’s 1.3100 high as support. The pullback has room down to 1.3070-1.3085 to still recover and potentially resume the rally. Any lower would extend the pullback to 1.3020.

Gold Feb Contract (GC, ETF: (GLD)) The next higher target at 1718.00-1720.00 was probed considerably up to 1731.50. The balance of the session consolidated back down to 1718.00-1720.00. Gapping down Friday under 1703.00 would form an Island Reversal out of Thursday’s range, and reverse momentum down to target 1676.00. Any lesser opening weakness would have potential for probing a fresh high up to 1746.50.

Silver Mar Contract (SI, ETF: (SLV)) The 33.55 target was probed Thursday up to 33.79. But the session mostly ranged back down to 33.55. The next higher objective is 34.50 so long as pullbacks hold 33.10.

30-year Treasury Mar Contract (US, ETF: (TLT)) Not immediately extending down from Wednesday afternoon’s steep dive meant the decline was not likely to resume. But it was not necessarily bullish. So, Thursday’s gap up was not required to extend any higher, and did not. The session worked its way higher toward 143-03, whose test should either reverse down toward 140-00, or else extend the rally sharply.

Crude Oil Mar Contract (CL, ETF: (USO)) 100.35 resistance was  broken Thursday, after two prior tests held its resistance. A steep reversal back under it is ending the day while testing 99.40-99.75, so the larger distributive pattern remains alive. But a lower close Friday would offer helpful confirmation..

Natural Gas Mar Contract (NG, ETF: (UNG)) Although Wednesday’s 2.81 target was pierced momentarily overnight, the three-day bounce held to its schedule by retracing back down to 2.58 Thursday. Several days of ranging flat to lower are now likely.

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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 Gold’s $60 intraday rally off the morning’s lows broke through several relevant resistance levels above. The session ended while probing a big resistance, suggesting that any immediate dip would be recovered.

Dollar Basket Mar Contract (DX, ETF: (UUP, UDN)) Wednesday’s gap up to retest Tuesday’s high created extra room to absorb Wednesday afternoon’s downdraft. So, despite tumbling to probe under Monday’s lows, Monday’s lows were still being tested at the close. Closing Thursday above 79.85 would signal that a bottom was in, but the trend otherwise remains down.

Eurodollar Mar Contract (EC, ETF: (FXE)) Wednesday morning’s open gapped down to retest Tuesday’s low, which was itself a test of the 1.2955 pullback limit. It held its retest. Recovering into the FOMC news accelerated exponentially to fresh highs at 1.3108, above prior highs. Even an interim dip held above prior highs, suggesting the rally’s momentum remains intact.

Gold Feb Contract (GC, ETF: (GLD)) Despite reacting down Monday from within $2 of the 1684.00 target, the target remained in-play. And despite the deep reaction down to 1649.20 Wednesday morning, the afternoon’s reaction to the FOMC news rallied sharply to probe above 1700.00. Big resistance is only slightly higher at 1718.00-1720.00, while an interim pullback has room down to 1702.00.

Silver Mar Contract (SI, ETF: (SLV)) Wednesday morning’s dip was a day too late to easily gain traction. But it recovered a little too easily. That didn’t stop extending sharply higher in reaction to the FOMC news, coming within 20 cents of the 33.55 target. Tuesday and Wednesday’s shallow pullbacks suggest that buying pressure will be expended at the target.

30-year Treasury Mar Contract (US, ETF: (TLT)) Tuesday’s shallow dip left open the potential for a break above 141-14 to test 142-00. It tested 143-16 — overshoot #1. I noted at the time how weird this pattern was, especially if it were to close above 143-04. It closed back under 142-00 — overshoot #2. This volatility will earn a few days rest of narrow ranging, but not yet. The drop’s momentum remains intact and targeting 140-00 so long as 142-05 were to hold as resistance.

Crude Oil Mar Contract (CL, ETF: (USO)) Only slightly higher highs Wednesday seemed oblivious to other market behavior. But this does suggest that any strength has been related to geopolitics, and not necessarily due to accumulation. That’s bad news, if a rally were to begin. Otherwise, closing under 98.25 would launch a downleg.

Natural Gas Mar Contract (NG, ETF: (UNG)) The 2.81 objective was satisfied Wednesday. The session also probed a third consecutive higher high. This is in-line with the rally’s setup that expected this timing for a near-term peak. The pattern should now enter a period of basing..

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