Daily Spot: Energies and Interest rates
A weekly summary of one complex, including daily updates of other developments elsewhere.[pay]
Crude Oil Jan (CLF) While awaiting the next downleg to begin, the ongoing consolidation continues to contain price action. Its potential to test 83.75 resistance was fulfilled Wednesday. And it extended slightly higher. Pullbacks have room down to 83.00-83.10 before signaling the bounce had ended. A close under 82.10 would signal a new downleg underway.
Natural Gas Jan (NGF) This week’s EIA data sparked a spike up that came within 2 cents of the long-standing 4.52 target (4.40 basis Dec). Its reaction down was substantial, but it didn’t undo the surge’s positive effects. Indeed, a lot of selling pressure was absorbed Wednesday afternoon without sellers gaining traction. That doesn’t prevent a deeper dip and retest of 4.30 as support, but it makes that deeper dip’s recovery likely. Assuming that 4.52 were met, the next higher target would be 4.75.
30-year Treasury Dec (USZ) Tuesday’s close was still in the process of testing the 128’14 bounce target. It was not clearly recovered to put any higher target in-play. Wednesday’s open gapped down easily on the morning’s economic reports. The gap opened at Monday’s 128’00 close, neutralizing any attraction back into Tuesday’s range. And the balance of the session slid easily to attack 126’00 support within 10 ticks. Avoiding an actual test of 126’00 despite having ample time to do so (circled green) reflects optimism that makes its test likely to break lower. The next lower target is 124’16-124’20.
Dollar Basket Dec (DXZ) Having finally produced the required new high Tuesday, any delay in extending higher would suggest the pattern was Double Topping. Wednesday’s fresh high extended into the close. The rally’s momentum remains intact and next targeting 80.50 so long as 79.62 holds as support on a closing basis. Wednesday’s strength is especially impressive considering it happened against the backdrop of a story that China and Russia may have “quit the Dollar.”
Gold Dec (GCZ) Global tensions eased, which allowed Gold to soften. But it only dipped back into the 1365.00-1372.00 range intraday, without closing under either 1372.00 or 1365.00. There is otherwise no signal that the rally’s momentum has peaked, or that momentum is reversing down.
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Daily Spot coverage schedule is: Currencies (Mon), Metals (Tue), Energies (Wed), Rates (Thu), Softs (Fri, coming).