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 Tuesday’s one highlight among commodities was a lack of correlation among them. Gold, and the Dollar index, were both under pressure. Crude probed fresh relative high while currencies were glued to their prior session’s opens. Wednesday’s session should light a few fireworks.

Dollar Basket Mar Contract (DX, ETF: (UUP, UDN)) Tuesday’s “ineffectual pessimism” gapped down, probed prior lows, and spent the entire session in negative territory — all without closing under the morning’s low. Closing above 80.40 would gain traction initially to test 80.85. Its recovery would target 81.25 and then new relative highs.

Eurodollar Mar Contract (EC, ETF: (FXE)) Tuesday’s gap up probed above Thursday and Friday’s highs, but held under Wednesday’s highs, and essentially extended the narrow range in-play since last Tuesday afternoon. Tuesday’s price action not only did not upset last week’s pattern of “ineffectual optimism,” it was more of the same. Closing under 1.3070 Wednesday, confirmed under 1.3055, would trigger a bigger decline targeting 1.3015 and 1.2975.

Gold Feb Contract (GC, ETF: (GLD)) Thursday’s close under the 1610.50 sell signal finally produced its first real probe under 1600.00. Also closing under 1585.00 maintains the drop’s next lower target at 1575.50. The gap back up to Friday’s 1607.50 close would start to be an attraction if 1598.00 were recovered first.

Silver Mar Contract (SI, ETF: (SLV)) Gapping down Tuesday to 28.81 never got out of the gravitational pull back up to Friday’s 29.05 close. But filling it intraday held, and its test reacted back down to session lows. The objective to probe under 27.90 remains in-play so long as bounces were now to hold 28.85 resistance.

30-year Treasury Mar Contract (US, ETF: (TLT)) Extending slightly higher from Tuesday’s gap up quickly tested 142-12. Its probe as support last week by a lower low would have predicted a much bigger downleg underway if repeated one extra day. It was tested as resistance during Tuesday’s “inside day.” Gapping down Wednesday under 142’05 would be likely to resume the decline. Otherwise, the corrective bounce still has room to test 143’04.

Crude Oil Mar Contract (CL, ETF: (USO)) Monday night’s brief weakness down to 99.52 held well above the 99.40 bounce limit. Resistance at 100.00 was soon recovered on the way to fresh highs at 101.88. Pullbacks must now hold 100.30 to maintain this leg’s 103.00 target.

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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.[/pay]

Today’s Highlight After Monday’s surge to fresh highs, the 30-year Treasury bond reversed down sharply into its worst weekly performance since June. The bond’s destination in a “flight-to-quality” isn’t needed during a stock market rally. But is there more to it than that? [pay]

Dollar Basket Mar Contract (DX, ETF: (UUP, UDN)) Friday’s “inside day” started by gapping down. The gap was recovered entirely, but held as resistance through the close. The “ineffectual pessimism” still keeps alive greater potential for rallying out of the current consolidation.

Eurodollar Mar Contract (EC, ETF: (FXE)) Friday’s “inside day” started by gapping up. The gap was recovered entirely, but held as support through the close. The “ineffectual optimism” still keeps alive greater potential for declining out of the current consolidation.

Gold Feb Contract (GC, ETF: (GLD)) Thursday’s break under 1610.50 was not rejected at Friday’s open. The setup wasn’t confirmed Friday by a second consecutive lower close. Fresh lows under 1600.00 to 1575.50 would still be credible, but less so if not begun almost immediately after Christmas by dropping dramatically.

Silver Mar Contract (SI, ETF: (SLV)) Friday’s low-volume “inside day” conspicuously avoided probing under Thursday’s 29.00 low, or recovering. The delay should end after the weekend and resume the drop next targeting 27.90.

30-year Treasury Mar Contract (US, ETF: (TLT)) Wednesday and Thursday’s steep drop extended sharply lower Friday, too. Monday’s 1-point rally to 146-08 was reversed to 141-28. Like S&Ps, bonds have returned to levels last seen about two weeks earlier. Could there be more at work than just an inverse correlation between the two markets? We’ll find out very soon, if bonds were to continue falling while S&Ps reverse back down, too. Then Europe’s sovereignty risks will be applied to U.S. Treasuries.

Crude Oil Mar Contract (CL, ETF: (USO)) Thursday’s headlines about Crude visiting $100 made the rally vulnerable to a near-term correction. Yet, Thursday’s 100.15 highs were probed up to 100.38 Friday. But only briefly, as the headline-headwind pushed price back down under 100.00. Nevertheless, the rally’s momentum remains intact so long as 97.00-97.40 can hold pullbacks as support.

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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 Crude Oil extended higher to probe above $100, which got everyone’s attention. Of course, this was the second day of gains since triggering a buy signal Tuesday.

Dollar Basket Mar Contract (DX, ETF: (UUP, UDN)) Eurodollar Mar Contract (EC, ETF: (FXE)) Thursday morning’s initial trending attempt was quickly retraced back Wednesday’s range, which was itself an inside day. Early trending Friday beyond Thursday morning’s extremes would be likely to trend further into and out of the weekend. There is otherwise no active signal.

Gold Feb Contract (GC, ETF: (GLD)) Regardless of Tuesday night’s wild detour up to 1643.70, Tuesday and Wednesday’s tests of 1620.00 resistance could react down to test 1610.50 before signaling a new downleg underway. Thursday ‘s open dipped immediately and extended down to probe under 1600.00. The close was still testing 1610.50, but a second consecutive lower close Friday would confirm a new downleg underway. That would be difficult without also taking currencies beyond their Thursday morning extremes.

Silver Mar Contract (SI, ETF: (SLV)) Wednesday’s “ineffectual pessimism” proved less relevant than Tuesday’s “ineffectual optimism” when Thursday’s open trended down below each. The afternoon ranged consolidated down to 29.00, targeting 27.90.

30-year Treasury Mar Contract (US, ETF: (TLT)) Narrow ranging Thursday off of Wednesday’s fresh low maintained the pattern’s sell signal. A bigger bounce would have helped to refuel sellers, so extending down Friday without delay would be suspicious.

Crude Oil Mar Contract (CL, ETF: (USO)) Wednesday’s gains had confirmed Tuesday’s buy signal, which had put into play a test of 103.00. Thursday’s fresh highs probed above 100.00 intraday to grab headlines. Headlines can accompany near-term turning points, and a little correction to this 3-day 6-dollar rally would be helpful — preferably avoiding a close under 99.00 to maintain the rally’s momentum.

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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 Wednesday’s highlight really happened Tuesday night, when the Euro plunged. Another of Wednesday’s highlight also belongs to Tuesday night, when the steep plunge was retraced back under Tuesday’s lows. Uneventful price action Thursday would not be surprising, as the market absorbs such wide ranging.

Dollar Basket Mar Contract (DX, ETF: (UUP, UDN)) Tuesday’s outperformance vs. the Euro made lower lows unlikely, or unlikely to gain traction. It was the latter, as an overnight dive was retraced entirely and then reversed into positive territory Wednesday. The recovery never gained traction, and the balance of the session ranged narrowly back into negative territory. Back under 80.15 would once again target 79.25, but a rally to 80.80 would be signaled above 80.40.

Eurodollar Mar Contract (EC, ETF: (FXE)) Tuesday night’s surge fulfilled the rally’s potential to 1.3200 and reacted back down sharply. Tuesday’s intraday buyers had not gained traction, so the reversal down was all but required. Any break maintained under 1.3055 would likely extend lower to full outstanding gaps back down to 1.3015 and 1.2975.

Gold Feb Contract (GC, ETF: (GLD)) 1620.00 resistance held, ultimately, but not until being probed momentarily by an overnight surge up to 1643.70. A close back under 1610.50 is still needed to signal a downleg underway 1596.00 and potentially 1575.50.

Silver Mar Contract (SI, ETF: (SLV)) Tuesday’s “ineffectual optimism” was followed Wednesday by “ineffectual pessimism” — gapping down, probing Tuesday’s 29.26 prior low and spending the entire session in negative territory. Almost any new weakness Thursday should find little if any support to delay extending down to fresh lows targeting 27.90 and 27.05. Otherwise, back above 29.60 would target 31.00.

30-year Treasury Mar Contract (US, ETF: (TLT)) Tuesday’s steep drop extended lower overnight under 144-02 down to 143-19. Wednesday’s gap up quickly tested 144-12 resistance before reversing back down to new lows at 143-04. This level’s relevance during last month’s rally makes its support significant, too — and likely to hold. Regardless, fresh lows have room down to 142-12 before starting to consider a bigger downleg already underway.

Crude Oil Mar Contract (CL, ETF: (USO)) Overnight probes above 98.00 were retraced initially, making Wednesday vulnerable to reversing down sharply. But 98.00 was recovered again on EIA’s report of significant inventory contraction. The intraday high tested 99.40, and closing above it Thursday would confirm 103.00 is in-play.

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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 Yesterday’s Euro drop either had “opened the floodgates to a new downleg, or else Tuesday will reject Monday’s weakness with a vengeance.” In fact, Tuesday’s open gapped up sharply above Monday’s high, then extended more sharply above Friday’s prior high. But if vengeance is a dish best served cold, then Tuesday’s rally may have have been a one-day wonder. A second consecutive higher close Wednesday would qualify as a rally.

Dollar Basket Mar Contract (DX, ETF: (UUP, UDN)) Tuesday’s steep drop retraced all the way back down to last Tuesday morning’s low, which had launched a steep surge into that afternoon. This underperformed the Euro, which retraced only the move from last Tuesday afternoon. Closing under 80.15 would extend the decline targeting 79.25. While a bounce has room up to 80.70 before assuming new highs are in-play, just rallying out of Tuesday’s pattern would suggest the week-long decline had ended.

Gold Feb Contract (GC, ETF: (GLD)) The bounce had potential for extending to one more higher high at 1620.00, which was tested Tuesday. And retested Tuesday, while RSIs diverged negatively. Closing back under 1610.50 would target 1596.00, possibly as a new downleg targeting 1575.50 and lower.

Silver Mar Contract (SI, ETF: (SLV)) Initial weakness Tuesday would have trended down, but Tuesday’s open gapped up to avoid a decline. The gap back to Friday’s close was filled, and held. And the entire session was spent in positive territory. Gapping up, testing prior highs, exclusively positive… that’s a lot of optimism, except for actually closing above a prior high. So, Tuesday’s pattern was “ineffectual optimism,” and a break under its 29.26 low would trigger a downleg targeting new lows.

30-year Treasury Mar Contract (US, ETF: (TLT)) No longer being needed as a flight-to-safety, Tuesday’s open gapped down 11 ticks. The 145-22 sell signal triggered immediately, and the balance of the session slid to 144-00. More than just a pullback, a trend change is triggered by closing under 144-12. But that is contingent upon a second consecutive lower close, especially considering how much selling pressure was expended Tuesday.

Crude Oil Mar Contract (CL, ETF: (USO)) 95.25‘s recovery overnight launched a surge to open Tuesday testing 97.00. The balance of the session firmed flat-to-higher. A second consecutive higher close above 98.00 would confirm a bigger upleg underway targeting 103.00. Reacting down from probing 98.00 intraday would instead trigger a pullback to 94.75, probably steep.

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