Daily Spot

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

Gold Dec (GCZ) The 1342.00 pullback limit (green line) was not met Tuesday. Instead, after Sunday night’s test of the 1366.00 bounce limit (red line) resulted in closing negative Monday, Tuesday’s session was an inside day.

The pullback might yet extend down to 1342.00 where another upleg could be launched, with potential for filling the gap back up to 1372.00 (circled green). Regardless of the intraday high, retesting 1366.00 first would find buyers insufficiently refueled to avoid a new downleg.

Dollar Basket Dec (DXZ) Still aiming for 76.65 pullback target, which became much likelier due to Monday’s break to new relative lows.

30-year Treasury Dec (USZ) Bounced back to its 131’25 sell signal that was already confirmed. FOMC news is expected to bullish for bonds, and rejecting the sell signal would also be bullish. Otherwise, a “sell the news” scenario is likely.Crude Oil Nov (CLZ) Narrow ranging around the recently filled 83.80 gap Tuesday suggests it only neutralized unfinished business, and was not bullish. That doesn’t preclude visiting new highs above 84.00 before finally beginning a downleg.

Natural Gas Nov (NGZ) Tuesday morning’s dip to 3.74 represented the absolute lower-end of noise around the 3.83-3.84 61.8% pullback limit. Tuesday’s close above 3.83-3.84 confirmed the test had held. The rally’s next upleg is free to begin Wednesday afternoon or Thursday morning.

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

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

Dollar Basket Dec (DXZ) Thursday’s drop retraced more than 61.8% of the three-day rally, deeper than simply a correction. This kept alive the potential for probing the range’s lower-end and testing 76.65 to form a more durable bottom. Friday and Monday’s action has hesitated to extend down.

The Euro is also hesitating, although the Yen has probed a fresh high. The Yen’s fresh high is not being rejected, suggesting another higher high to come. In this context, the Dollar could squeeze in one more dip, before squeezing out shorts to trigger a rally.

This week’s election results and FOMC guidance on so-called QE2 measures will prove either that the current ranging is reversal pattern, or else it is a continuation pattern – either a turning point, or else a pause on the way to further extremes.

Gold Dec (GCZ) Potential to 1366.00 was realized Sunday night, and Monday’s close was negative vs. Friday’s close. The retracement has room down to 1342.00 before signaling that sellers are gaining traction for larger downleg. Holding a test of 1342.00 as support would enable filling the gap back up to 1372.00, which doesn’t otherwise require it.

30-year Treasury Dec (USZ) Friday’s bounce extended into Monday’s opening gap up, but the session soon turned down and closed negative. Thursday’s confirmation of Wednesday’s breakout close under 131’25 should now resume by producing fresh lows next targeting 128’14. It is interesting that Wednesday’s FOMC guidance on QE2 measures is so near, seemingly bullish for bonds. In that environment, beware of any quick reversal back above 131’25 that might threaten to invalidate the sell signal.

Crude Oil Nov (CLZ) Friday’s close under 81.50-81.55 was rejected by Monday’s open gapping up above Friday’s high. A two-week old gap back to 83.80 was filled, which wasn’t required. But it held, and the ranging persists.

Natural Gas Nov (NGZ) Potential to 4.17 was fulfilled overnight and then retraced sharply. The reaction down held 3.83-3.84 to retrace 61.8% of the rally from last Monday’s low. Closing any lower would have undermined the potential for another upleg, which now needs a little consolidation to absorb the shock to its system.

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

Dollar Basket Dec (DXZ) Friday’s ranging did not alter Thursday’s bearish signal. The week’s initial three-day rally from one end of the range to the other had only neutralized the attraction above at 78.45. Potential remains alive to retest 76.65 before forming a more durable bottom.

Gold Dec (GCZ) The second day of a monstrous two-day rally forecast after Wednesday’s close finally fulfilled the retest of 1357.00. Potential remains alive for extending to 1363.00 or to 1366.00 before ending the corrective bounce.

30-year Treasury Dec (USZ) Thursday’s confirmation of Friday’s breakout close under 131’25 had entrenched sellers to allow room for a corrective bounce Friday. Since Friday did bounce, the drop’s hesitation should persist through Monday afternoon before resuming.

Crude Oil Nov (CLZ) Friday’s close under 81.50-81.55 signals the next downleg underway, which would be confirmed by closing Monday under Friday’s 80.55 low.

Natural Gas Nov (NGZ) The week-long bottoming pattern’s breakout above 3.80 Thursday did not hesitate Friday to fulfill its first target at 3.98-4.03. Natty Gas tends to repeat Friday’s character on Monday, so the current leg has great potential to also include the rally’s next target at 4.17.

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

30-year Treasury Dec (USZ) The Double Top pattern’s retracement of more than 61.8% was consolidated. Its break is now underway. Wednesday’s confirmation of Tuesday’s sell signal (closing under 131’25) entrenched sellers. Lower lows are now a requirement, but with no particular timing other than preceding a close back above the 131’25 signal.

In fact, Thursday’s price action ranged narrowly without probing a fresh low. This ineffectual optimism is in-line with Wednesday’s low, which avoided touching September’s prior low (dashed line). The margin (circled) reflects a similar optimism from which any bounce would be doomed to failure.

The current downleg’s target is 128’14. A close under 128’04 would signal the next downleg underway, targeting the 125’16 area.

Dollar Basket Dec (DXZ) Three consecutive sessions had rallied aggressively from end of a trading range to the other. The last session filled an outstanding gap, neutralizing its attraction above, without gaining traction to extend the rally naturally. The vulnerability to reversing down sharply was manifest in Thursday’s steep one-day drop. Closing under 73.35 77.35 would signal the drop extending, targeting 76.85 and 76.65.

Gold Dec (GCZ) Three consecutive sessions had fallen sharply from end of a trading range to the other. The last session filled an outstanding gap, neutralizing its attraction below, without gaining traction to extend the drop naturally. The vulnerability to reversing up sharply was manifest in Thursday’s steep one-day rally. Closing above 1347.00 would signal the rally extending, targeting 1359.00 and 1363.00/1366.00.

Crude Oil Nov (CLZ) Thursday’s session made only negligible gains, despite Wednesday’s recovery from probing under 81.50-81.55. This suggests Wednesday’s dip was not bullish. A close under 81.50-81.55 would still trigger the next downleg.

Natural Gas Nov (NGZ) The reaction EIA met more of the same pessimism / tempered optimism that continues to make this bottoming effort so credible. The eventual recovery through 3.80 extended higher nearly a dime to attack 3.90. So long as 3.80 now holds as support, the 3.98-4.03 area is targeted. And except for some resistance there from “higher prior lows,” this current leg could extend to 4.17 before correcting.

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

Crude Oil Nov (CLZ) The month’s ranging has been awaiting a confirming close under 81.50-81.55 (highlighted pink) to signal a downleg underway, targeting 77.75. Monday’s test stopped short. Wednesday’s test recovered into the close.

Support has been chipped away sufficiently to expect the next dip under 81.50-81.55 to gain traction and extend down sharply. Another probe under 81.50-81.55 that recovers would be bullish.

The gap back to 83.80 (circled red) does not require being filled, but it would be a likely attraction if 81.50-81.55 were to reject another break attempt.

Natural Gas Nov (NGZ) The gap back to Monday’s close (circled red) had been filled by Tuesday afternoon’s dip, reflecting patient buyers. They were rewarded by Wednesday’s opening surge to fresh highs.

The balance of the session dipped, retracing 61.8% of the recovery from Monday afternoon’s low. This is a healthy pullback that once again shows sponsorship to be patient buyers.

EIA reports on Thursday, and the restrained optimism is bullish. A new upleg would be signaled close above 3.80, initially targeting 4.00. Probing 3.80 intraday but failing to close above it would be bearish at this stage of the pattern’s recovery attempt, and a close under 3.73 could point down to new lows.

Dollar Basket Dec (DXZ) Wednesday’s session-long rally through 78.00 resistance filled the gap back to 78.45. Buyers gained no traction without closing above the gap’s 78.51 prior high. Similar to Gold, three consecutive sessions of rallying from the lower-end of the prior week’s range back to its upper-end have expended a great deal of buying energy. The pattern is vulnerable to a significant reversal if the recovery does not extend higher without delay

Gold Dec (GCZ) Wednesday’s drop back to last week’s lows did not gain new traction, and it neutralized an outstanding gap’s attraction below. A close under 1320.00 would be difficult to recover. But three days of trending down since Monday’s opening gap up, from one end of the prior week’s range back down to its lower-end, leave the pattern unusually vulnerable to a 1-2 day surge up to new relative highs targeting 1357.00.

30-year Treasury Dec (USZ) A second consecutive lower close following Tuesday’s breakout now confirms a new downleg underway. The break activates the Double Top pattern forming since August’s high. The next objective below is 128’14. An interim bounce should hold any test of 130’26.

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