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 Gold fulfilled my bounce targets overnight. Tuesday’s reaction up on Bernanke’s testimony may prove to be only noise. Don’t forget the Humphrey-Hawkins rule: Reactions on day-one are often reversed on day-two.
Dollar Basket Mar Contract (DX, ETF: (UUP, UDN)) Monday’s attack on 82.05 was duplicated Tuesday, and still held. A pullback to test 81.40 is likely.
Eurodollar Mar Contract (EC, ETF: (FXE)) Overnight low touched the 1.3020 target and bounced. Filling the gap back to Monday’s close resolved down under the morning’s lows, but held above the overnight lows. While there may be room for an interim bounce to 1.3140, the drop is likely to extend to 1.2955 and then potentially much lower.
Gold Apr Contract (GC, ETF: (GLD)) Monday’s post-close test of the 1596.50-1601.00 target’s lower-end was followed overnight by a test of its upper-end. Reacting down to 1584.00 support proved quite vulnerable to Bernanke’s testimony, triggering a surge to fresh highs testing 1620.00. Having tested 1618.00 intraday, not closing above it suggests that Tuesday’s buying was an isolated incident, and gained no traction for its efforts. But being a fresh high, no sell signal is indicated. The pattern can back-and-fill to test 1596.50-1601.00 before signaling that momentum is reversing down.
Silver Mar Contract (SI, ETF: (SLV)) Tuesday morning’s initial reaction down was recovered back above Monday’s high to attack 29.50, still targeting 29.85.
30-year Treasury Mar Contract (US, ETF: (TLT)) Monday’s post-close test of the 145-03/145-06 target area extended higher overnight to test its next resistance at 146-06. That apparently discounted all of Tuesday morning’s influence, as it held its retest intraday. Gapping down back into or under 145-03/145-06 would suggest that Tuesday was an isolated incident, and that momentum was reversing down fast.
Crude Oil Apr Contract (CL, ETF: (USO)) Trading remained subdued and ranging narrowly around 93.00. The utter lack of volatility, let alone lack of trending, while Gold and Bonds soar on Bernanke’s reaffirmations suggests that QE is having no economic impact.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL)) Monday’s gap up extended higher overnight to test 3.45, retracing back down to 3.40. A pullback to 3.36 would be optimal before the rally were to resume.
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