Daily Spot

A weekly summary of one complex, including daily updates of other developments elsewhere.[pay]

Gold Jun (GCM) The accident stopped waiting to happen. Four consecutive sessions of “ineffectual optimism” were retraced entirely by Tuesday’s steep drop. Actually, almost all was retraced. Tuesday’s 1492.00 low stopped short of the sequence’s 1482.00 low. This misplaced optimism prevents the drop from completing, and indicates lower lows to come.

Dollar Basket Jun (DXM) Lacking momentum, the decline persists anyway. Gapping down Tuesday within the recent range then extended down to fresh lows. The session ended while still in the process of testing those lows, where a recovery into positive territory would have formed a bottom. Closing Wednesday above Tuesday’s 74.52 high could still form a bottom, but the trend otherwise remains down.

30-year Treasury Jun (USM) Big target met ahead of big day. The three-day narrow range finally broke higher Tuesday, and immediately fulfilled the 122’02 target. It was still being tested at the close, or at least not exceeded enough to put into play the next higher target. That signal will rely upon a second consecutive higher close Wednesday to confirm Tuesday’s breakout above its recent range. Otherwise, a meaningful top will likely have formed. Regardless, there’s a lot of buying pressure being satisfied ahead of a big day, Wednesday’s new FOMC format.

Crude Oil Jun (CLM) Not much interest in affirming the rally. Tuesday’s action ranged narrowly. This comes one day after narrowly avoiding a close under 111.65, despite the steep rejection from retesting the 113.00 target. Now a close under 111.65 could gain traction itself. But the likelier scenario would still retest Monday’s 113.22 opening gap up. EIA reports mid-morning Wednesday.

Natural Gas Jun (NGM) No more room or time to pause. The hesitation continued to consolidate recent gains, presumably refueling to test the bounce’s 4.55 target. A close above it would signal a much more significant rally underway.

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Daily Spot coverage schedule is: Currencies (Mon), Metals (Tue), Energies (Wed), Rates (Thu), Weekender (Fri).

A weekly summary of one complex, including daily updates of other developments elsewhere.[pay]

Dollar Basket Jun (DXM) Keeping its head while all those about it... Two consecutive sessions of gapping down to new lows did not extend lower intraday. Monday’s open neither gapped down nor did it probe new lows. That’s somewhat subdued behavior for an otherwise strong trend. Especially considering Gold’s early strength. Of course, Gold backed off, so perhaps the Dollar is more attracted to the three recent gaps outstanding above.

Gold Jun (GCM) Probing higher highs with little net effect. Last week’s three consecutive sessions of “ineffectual optimism” left the wrong environment for maintaining Monday’s opening gap up. Its brief probe of new highs was retraced back into negative territory. A subsequent bounce intraday retested the open’s gap, neutralizing its attraction above. Closing under the 1506.00 prior highs and under Monday’s 1502.00 low would signal momentum was reversing down sharply.

30-year Treasury Jun (USM) Complacency at resistance only expends energy. Although Wednesday’s session was entitled to range narrowly, Thursday’s narrow ranging reflected weakness. Monday’s narrow range confirms. It’s not a sell signal, but it is weak basing that would undermine a rally attempt. A test of the 122’02 target may be no less likely, but its test is becoming much more likely to reverse down sharply.

Crude Oil Jun (CLM) Optimism, meet resistance. Wednesday and Thursday’s reluctance to decline from the bounce’s 111.65 target reflected just enough optimism to keep alive the bounce’s momentum. Monday’s gap up crossed the line into excessive optimism, just as the prior rally’s 113.00 target was being tested. A big intraday reaction down closed probed 111.65 and closed while trying to recover positive territory. The open’s 113.22 gap up will want to be retested as resistance before a close under 111.65 can trigger an even bigger downleg.

Natural Gas Jun (NGM) Dipping a little, a little late. Despite trading weaker throughout Monday, potential remains alive for extending the rally up to 4.55. Closing any higher would signal a much more significant rally underway.

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A weekly summary of one complex, including daily updates of other developments elsewhere.[pay]

30-year Treasury Jun (USM) The wrong time for a rally to pause. Thursday’s open spiked up to fill the gap back to Tuesday’s close. That was an appropriate way to exit Wednesday’s narrow inside day. Then the gap’s resistance pushed back. That was an inappropriate way to resume Monday and Tuesday’s rally. There is now no unfinished business above. Extending the rally higher immediately would get a benefit of the doubt for targeting 122’02. Closing under 120’25 would trigger a sell signal, confirmed under 120’16, targeting 117’00.

Dollar Basket Jun (DXM) Still gapping down. Wednesday’s narrow ranging at new lows could have formed a bottom Thursday, or even could have gapped up to form an Island reversal. But Thursday gapped down to another new low. Two consecutive gaps down are unlikely to resolve in an Island Reversal. And the gap above creates extra resistance to inhibit a recovery. While a bottoming pattern could still form, beginning the process immediately would still not completely form the bottom until Tuesday’s close or Wednesday’s open. Only a steep spike up could generate momentum and gain traction for a multi-session rally.

Gold Jun (GCM) More signs of distribution. Although Wednesday’s “ineffectual optimism” did not immediately launch a new downleg, Thursday’s price action continued to reflect buyers losing momentum. Overnight highs up to 1509.60 were retraced back under Wednesday’s high, whose resistance wasn’t probed until the afternoon. Each probe was retraced back under Wednesday’s high. It’s just more of the same: Gapping up, ranging exclusively in positive territory and probing prior highs (optimism) without closing above them (ineffectual). And now another gap below is outstanding, back to both Wednesday and Tuesday’s closes. But a close under 1498.00 is needed to signal that momentum is actually trying to reverse down.

Crude Oil Jun (CLM) The safety net is gone. The bounce’s 111.65 target met Wednesday did need to be probed further, and its probe did not gain traction. RSIs diverged negatively into overnight higher highs at 112.48, pushing price down into Thursday’s open. Although Thursday’s session firmed, it closed under the overnight highs. That might be more of the same constructive pessimism that kept the rally alive after Wednesday. But closing back under 110.50 would signal that momentum was reversing down, presumably to begin a much bigger downleg than the prior one from 113.00.

Natural Gas Jun (NGM) Climbing a wall of worry. Wednesday’s second consecutive close above 4.29 got a benefit of the doubt for being a confirmed breakout. Thursday’s higher highs at 4.47 removed some of the doubt. Closing above 4.55 would signal the rally was extending higher, so long as pullbacks were to hold any test of 4.44 support.

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A weekly summary of one complex, including daily updates of other developments elsewhere.[pay]

Crude Oil Jun (CLM) Corrective bounce target met. And held. Tuesday night’s rally peaked upon filling the gap back to 110.00. The rally extended higher Wednesday to fulfill the corrective bounce’s 111.65 target. A downleg is now free to begin, any immediate weakness could extend down. That said, the hesitation at 111.65 smells of pessimism, so a more credible start to the downleg would first reject at least one more fresh high.

Natural Gas May (NGK) Buyers get a benefit of the doubt. [Rolling coverage to Jun after today, trading at a 4-5 cent premium to May] Tuesday’s close above 4.25 [4.29 basis Jun] was confirmed Tuesday, so a rally gets every benefit of the doubt for extending higher. Closing back under the signal Thursday would not only invalidate the signal, but also reverse momentum down.

Dollar Basket Jun (DXM) The bigger they are… Monday’s rally was substantial, but it was no more likely to extend higher while leaving unfinished business below at the gaps back to Thursday and Friday’s closes. Tuesday immediately retraced back to Monday’s post-open low. But Wednesday’s open gapped down substantially below all prior lows. Similar to the same problem that undermined Monday’s rally, Wednesday’s opening gap will need to be retested from above before any rally could be credible to gain traction. That could be done immediately, since Wednesday’s session only ranged narrowly sideways after the open.

Gold Jun (GCM) Sellers starting to gain interest as buyers start losing it. Tuesday night’s probe above the 1500.80 minimum target for this leg was retraced somewhat into Wednesday’s open. The gap up eventually did extend a little higher into the afternoon. But the overnight high’s retest sent price down sharply to nearly fill the gap back to Tuesday’s close. Nearly. An entire session spent in positive territory, probing prior highs and a target, closing back under the morning’s highs. That’s “ineffectual optimism.” Considering that Tuesday’s narrow ranging already suggested that buyers were losing interest, sellers should soon start gaining it.

30-year Treasury Jun (USM) Still suspicious of the confirmed buy signal. Wednesday’s gap down didn’t extend down, and only ranged narrowly just under Tuesday’s close. That’s not inappropriate for the day following confirmation of a breakout, which Tuesday confirmed by closing positive after Monday’s close above 120’25. But the rally should resume Thursday to fresh highs since the breakout itself was already suspicious. Closing back under 120’25 would negate the breakout.

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Daily Spot coverage schedule is: Currencies (Mon), Metals (Tue), Energies (Wed), Rates (Thu), Weekender (Fri).

A weekly summary of one complex, including daily updates of other developments elsewhere.[pay]

Gold Jun (GCM) Shallow at the top. Tuesday’s session ranged narrowly, flat to higher, and nearly touched the 1500.80 objective before closing back under Monday’s highs. The session offered no new information. A close under 1485.50 is needed to signal momentum reversing down.

Dollar Basket Jun (DXM) False break, or premature? Suspicions surrounding Monday’s rally effort were refueled by Tuesday’s gap down that extended back to Monday’s intraday lows. That’s far short of filling gaps below and probing lows down to 74.80-75.00. It’s also nearly an inside day, which would qualify as “ineffectual pessimism.” Regardless, Monday’s break wasn’t confirmed, and lower lows remain likely so long as bounces now hold any test of 76.50-76.60.

30-year Treasury Jun (USM) Not acting like a breakout. Monday’s recovery bled into Tuesday’s session by simply firming throughout the day. The second consecutive close above 120’25 now puts into play a test of 122’02 so long as 120’16 holds as support. The rally potential would become suspect again on any close under 120’25.

Crude Oil Jun (CLM) One more shot at extending the bounce. Monday’s pullback needed to be recovered without delay to prevent sellers from gaining traction. Tuesday’s open gapped down, but immediately began trending up to close positive. Resistance at 108.85-109.10 held its test intraday. Extending higher without delay would maintain potential to 111.65 before launching a bigger downleg.

Natural Gas May (NGK) Too much, too soon. Tuesday morning’s gap up extended higher to retrace all of Monday morning’s plunge. The afternoon was spent testing 4.25 as resistance, happening to close above it. A second consecutive close above 4.25 would confirm a new rally leg underway. Otherwise, there remains unfinished business at 3.97.

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Daily Spot coverage schedule is: Currencies (Mon), Metals (Tue), Energies (Wed), Rates (Thu), Weekender (Fri).