Daily Spot: Interest rates
A weekly summary of one complex, including daily updates of other developments elsewhere.[pay]
30-year Treasury Mar (USH) The 119’12-119’20 area is an inflection point in the longer-term decline. Its current test should either launch a multi-point correction, or else the rate of descent would likely steepen significantly. Intraday probes under the 119’12-119’20 area can still bottom if recovered at the close.
Closing under the 119’12-119’20 area can be recovered the following day, but with a catch: follow-through. Wednesday’s close under the 119’12-119’20 area was recovered Thursday. So, Friday must follow-through and extend noticeably higher. Otherwise, Thursday’s recovery would be suspicious.
The bigger picture points down ultimately. Its path is in question. The 10-point drop from this summer’s highs don’t necessarily need to be retraced. Rather, a paradigm shift in perception is entirely capable of attracting new sponsorship among sellers. Ending this week on a lower note could be very bearish going forward.
Dollar Basket Mar (DXH) Thursday’s close was in the process of testing Wednesday’s high. Wednesday’s high was already probed intraday, after recovering from a gap down. That undermines the recovery leg only to leave no unfinished business above if Friday begins selling off again. Otherwise, the recovery still gets a benefit of the doubt.
Gold Feb (GCG) Last week’s 1372.00-1374.00 prior lows were being tested as resistance at Thursday’s close. Their recovery along with 1381.00 Friday may be the last opportunity to prevent the drop from becoming a new downleg targeting a probe under 1320.00.
Crude Oil Jan (CLF) Wednesday morning’s recovery from its gap down did not improve throughout the entire afternoon. And it did not improve Thursday. While a close under 87.50 might be able to gain traction, I am otherwise still waiting for a test of 90.65.
Natural Gas Jan (NGF) Thursday’s EAI report was not a catalyst for trapping extended shorts. Not a very good one. Instead, the market reacted down sharply to test 4.02. A lot of selling pressure has been expended to travel from one end of the multi-month basing pattern’s range to the other. Closing any lower would threaten to resolve in a new downleg.
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Daily Spot coverage schedule is: Currencies (Mon), Metals (Tue), Energies (Wed), Rates (Thu), Softs (Fri, coming).