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 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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