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 The long bond’s plunge Monday back to last week’s lows proves its interim bounce was sponsored by weak hands. The attraction to nearby fresh lows must be fulfilled and rejected quickly to avoid a deeper prolonged decline.
Dollar Basket Mar Contract (DX, ETF: (UUP, UDN)) Monday’s gap down and probe of fresh multi-session lows, spending the entire session in negative territory, was pessimism. Not closing under Friday’s 79.60 prior lows is “ineffectual pessimism.” The decline must extend lower without delay Tuesday, or else it is bottoming.
Eurodollar Mar Contract (EC, ETF: (FXE)) Monday’s gap up and probe of fresh multi-session highs, spending the entire session in positive territory, was optimism. Not closing above Friday’s 1.3714 prior highs is “ineffectual optimism.” The rally must extend higher without delay Tuesday, or else it is peaking.
Gold Feb Contract (GC, ETF: (GLD)) Monday’s overnight attempt at resuming the decline failed for not first bouncing temporarily above Thursday’s 1703.60 high. That’s still possible, but no longer assured of failing.
Silver Mar Contract (SI, ETF: (SLV)) Monday’s fresh lows attacking 32.00 reacted up only to test Thursday and Friday’s ~32.25 prior lows as resistance. The trend remains down unless 32.60 were recovered through the close.
30-year Treasury Mar Contract (US, ETF: (TLT)) Thursday’s recovery had formed a weak base that doomed Friday’s 148-19 higher highs to failure. Mondays deep decline back to last week’s 147-09 lows resumed the decline targeting 147-00.
Crude Oil Jan Contract (CL, ETF: (USO)) Last week’s failed attempts at launching a downleg under 86.50 were punished by returning to the 87.65 prior high. Back under 86.50 would again target fresh lows.
Natural Gas Jan Contract (NG, ETF: (UNG, UNL)) Friday’s modest gap up ranged very narrowly around Monday’s 3.36 highs. The pattern can be exploited to launch a durable rally, but probably only without any further delay past Tuesday’s open.
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