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 Wednesday was a counter-trend day, assuming that recent action has been trending. With one exception: Bonds. Its intraday weakness didn’t neutralize any unfinished business below. That suggests optimism may be a little excessive. And that is potentially bearish — from a contrarian perspective — especially with Friday’s Employment Situation report only one day away.
Dollar Basket Mar Contract (DX, ETF: (UUP, UDN)) Wednesday’s price action was almost a “pivot reversal.” Almost. Gapping down in an uptrend, recovering to probe a new trend high, but then closing back under the morning’s low. These elements would qualify as a pivot reversal setup, except that Tuesday’s high was the product of a significant gap. This missing element doesn’t prevent some further dipping Thursday. But it makes that dip only a correction, and not the trend reversal it would otherwise have been.
Eurodollar Mar Contract (EC, ETF: (FXE)) Similar to the Dollar action described above, Wednesday’s “pivot reversal” may delay the Euro’s decline, but should not end it.
Gold Apr Contract (GC, ETF: (GLD)) Tuesday’s drop was corrected by Wednesday’s bounce to 1688.00 It retraced 61.8% of the drop from Tuesday’s 1704.00 close to its 1663.50 low. Tuesday’s post-open high was barely probed. If the two-day base were to launch a rally Thursday, with potential to 1683.00, its origin suggests that its sponsorship would be weak hands, making the bounce likely to fail.
Silver Mar Contract (SI, ETF: (SLV)) The corrective bounce targeting 36.10 required its immediate resumption Tuesday. That failed, but Tuesday’s low held a test of support that allowed Wednesday to try again. Wednesday’s session did trend up immediately and throughout. Closing above 33.85 Thursday would confirm the bounce’s momentum is intact.
30-year Treasury Jun Contract (US, ETF: (TLT)) Rallying stocks Wednesday undermined any need for a flight-to-safety. Bonds dipped to test 141-14 support. Avoiding a lower close also avoided signaling that momentum was already reversing down. That doesn’t protect against gapping down Thursday to test 140-27, whose retest at this stage would likely break lower. There is otherwise no buy signal in-play.
Crude Oil Apr Contract (CL, ETF: (USO)) Wednesday’s fresh low at 104.35 was recovered to test 106.30. That was far enough back above last week’s lows to not be noise around Tuesday’s gap down. The attempt to reject Tuesday’s gap down would be complete by extending higher to close above 107.25. Closing back under 104.80 would instead confirm Tuesday’s gap down and extend it much lower.
Natural Gas Apr Contract (NG, ETF: (UNG)) Two consecutive new low closes have produced a third lower close. While the break could extend lower still, there is no requirement to do so. Wednesday’s session happened to test two relevant support levels at 2.28-2.30. An immediate recovery attempt would not be credible, but could be the beginning of a better bottoming pattern. The trend otherwise remains down.
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