Daily Spot: Interest rates
A weekly summary of one complex, including daily updates of other developments elsewhere.[pay]
30-year Treasury Mar (USH) Finally. Right? Finally? The long-awaited break is trying again. Any break has been long-awaited. Thursday’s low attacked its two-week old prior low, which had attacked its prior low (red solid line). Neither of the prior two lows were actually touched, a degree of optimism that has prevented a bottom from forming.
But the pattern forms a potential Head & Shoulders (highlighted red). And if this break gains traction, then its 118’00 target is in-play. There would be room down to 117’16 before assuming the downleg was going to be much bigger.
Head & Shoulders, or not, the current trading range has developed above the trend extreme (circled green). This makes the pattern “complex.” Resolving down next would confirm. Also confirming would be to reject new lows for an aggressive rally back to the current trading range’s highs – often through it.
Closing first back above 120’14 would undermine this attempt to decline. It might also be bullish enough for a probe above the trading range’s highs.
Dollar Basket Mar (DXH) Rinse, wash, fresh low, repeat. Thursday’s gap down bounced to fill the gap back to Wednesday’s close. It even tested Wednesday’s high. But each held, so once again buyers expended energy without gaining traction. Recovering from another probe of the lows would be bullish. Otherwise, the risk is to trend down sharply into and out of the weekend.
Gold Feb (GCG) When it rains... Wednesday’s mid-morning drop back to Tuesday’s close had hovered there too optimistically not to be concerned with the recovery attempt. Especially since the high had peaked at 1378’00 resistance, without leaving any unfinished business above. Thursday’s tumble to new lows was one close under 1365.00 too many. The next lower objective is obligatory support at 1333.00, and then 1325.00.
Crude Oil Feb (CLG) Doesn’t the market listen to analysts? Wednesday’s late close under 92.00 extended down sharply, and already neutralized its 89.00 objective. Selling pressure that takes so much time to unleash, and so little time to fulfill, tends to resolve in one of two ways: It either continues falling uninterrupted, or retests its trigger. Regardless, the ultimate resolution is still likely to be down, despite rhetoric continuing to call for $100 oil. Actually, the last drop came amid the $100 calls, so now we’re hearing $150, $200. And still seeing big drops.
Natural Gas Feb (NGG) Going to have to do better than that. Wednesday’s close above 4.55 extended higher in reaction to EIA. An outstanding gap back to 4.65 was filled. I’ll give this a benefit of the doubt for breaking higher, but there is room back down to 4.55 before signaling momentum reversing down.
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Daily Spot coverage schedule is: Currencies (Mon), Metals (Tue), Energies (Wed), Rates (Thu), Weekender (Fri).