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Daily Spot: Currencies – If, Then… Market Timing

Daily Spot: Currencies

By Rod David | May 23, 2011 - 5:01 pm

A weekly summary of one complex, including daily updates of other developments elsewhere.[pay]

Dollar Basket Jun (DXM) Making up for the delay. Although Friday’s gap up ultimately maintained little of its post-open gain, the rally had resumed. And it was likely to extend into Monday, which tends to mimic Friday’s behavior. In fact, the open gapped up above all prior highs.

Gold Jun (GCM) “De-coupling” doesn’t explain it. Firming with Gold for the second consecutive session Monday is an odd relationship between the two. But all other metals are weaker, suggesting that Gold’s odd relationship is with its complex. Regardless, closing above 1519.00 would get a benefit of the doubt for extending higher to 1557.00-156.00. Back under 1499.00 would signal the decline had resumed.

30-year Treasury Jun (USM) Big resistance holds another big effort. Monday’s gap up retraced two-three days spent reacting down from last week’s breakout attempt. It also broke back above the rally’s latest 125’06 target that never extended higher. It held as resistance through the close, but now a close under 125’18 would signal a new upleg underway. Closing under 124’20 would once again signal momentum reversing down.

Crude Oil Jul (CLN) Getting ahead of itself. The decline’s long-awaited resumption may have arrived with Monday’s gap down. Breaking under 98.60 extended down more than $2 intraday. Closing under 97.50 would have confirmed the downleg underway, but it was still within a nickel of being tested at the close. Having gapped down sharply, not extending any lower intraday is pretty optimistic. And optimism does not make a bottom

Natural Gas Jun (NGM) Bottom’s up. Mondays tend to mimic Friday’s action in this market. So Friday’s strong buy signal and confirmation above 4.15 and 4.20 extended higher Monday to 4.38. The rally targeting 4.50 and potentially 4.80 remains intact so long as 4.30 holds as support.

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Daily Spot coverage schedule is: Currencies (Mon), Metals (Tue), Energies (Wed), Rates (Thu), Weekender (Fri).

Posted in Daily Spot