Daily Spot
A weekly summary of high-profile members of several complexes.[pay]
Dollar Basket Jun (DXM) Form and function. Yesterday I described the optimal bottoming setup at this stage of the pattern: Rejecting an opening dip to close above a prior high. Thursday’s price action followed the form perfectly – except instead of probing Tuesday’s low to 73.50, Wednesday’s low was probed to 74.05. That might suffice, since Wednesday’s session developed entirely above Tuesday’s range. A second consecutive higher close Friday would signal a corrective rally underway so long as 74.20 holds as support.
Gold Aug (GCQ) Corrective dip done, corrective rally resumed. Recent weakness off of 1355.00 ultimately tested its maximum 1533.00 pullback limit at Wednesday’s low. There was no bullish reason to further delay resuming the rally. Thursday’s surge up to 1550.80 did resume the rally. Its reaction down was still in the process of testing its new pullback limit of 1544.00. There continues to be no bullish reason to delay extending higher to the 1558.00-1560.00 target.
30-year Treasury Sep (USU) The Icarus pattern. Wednesday’s close above 125’20 could have extended higher Thursday. It did gap up at the 126’06 prior high, and then probe fresh highs up to 126’12. But a steep reversal down fell to 124’28. That’s right – yet another big sell-off that failed to close under 124’28 (which held four consecutive sessions to trigger Wednesday’s surge). Having probed fresh highs this time, closing back under 125’10 does signal momentum reversing down. But now a close under 124’18 is needed to confirm that a new downleg is underway.
Crude Oil Aug (CLQ) Waiting for another shoe to drop. [Rolling coverage forward to Aug, which trades at a 50-cent premium to Jul] Wednesday’s bounce up to the 102.00 area held as resistance. Thursday’s higher high was still in the process of testing Wednesday’s 102.41 high. Despite extending the bounce, buyers didn’t gain traction for their effort. Closing under 101.65 would warn that momentum is reversing down. Back under 99.85 would trigger a downleg underway.
Natural Gas Jul (NGN) Getting way ahead of itself. Closing above 4.85 would have signaled a new rally leg underway targeting 6.00. This week’s prior testing of 4.85 suggested it would hold until a pullback could test 4.63-4.65. That didn’t stop another attempt Thursday – ahead of EIA which rarely turns out well. In fact, despite extending up to new highs at 4.98, the pattern resolved down sharply to 4.65. The shock of a big intraday reversal must be absorbed before a rally can resume, preferably with a more thorough intraday test of 4.63-4.65 support, perhaps down to 4.50.
[/pay]
Share your questions and comments on this post in the blog, or in the chartroom…