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.[/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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