Daily Spot: Interest rates
A weekly summary of one complex, including daily updates of other developments elsewhere.[pay]
30-year Treasury Jun (USM) Perhaps a little too cautious. Wednesday’s close under the 119’26 signal was confirmed by Thursday’s close under118’26. That was quick. And maybe a little too pessimistic – down more than 2 points in two days – ahead of Friday’s Employment Situation report. This defensive posturing has dipped too far to ensure that a negative reaction can be absorbed. An initially favorable knee-jerk reaction up to 119’16 or 119’26 would still be vulnerable to reversing down.
Dollar Basket Mar (DXH) Second time isn’t a charm, either. Wednesday’s second consecutive breakout wasn’t confirmed. At least, not cleanly. Thursday’s recovered to close while in the process of testing Wednesday’s lows as resistance. Initial buying pressure Friday would be credible for extending higher. But there is no support below otherwise to prevent extending down into and out of the weekend.
Gold Apr (GCJ) False breakout confirmation? Still being in the process of testing 1435.00 resistance at Wednesday’s close made a pullback likely Thursday. Closing higher to confirm Tuesday’s breakout made the pullback all about refueling buyers. My objective for the dip was 1424.00. It reached 1412.20. Intraday. A close back under 1416.00 before Thursday would have signaled momentum reversing down in a very big way. Holding 1416.00 at Thursday’s close leaves the door open for Thursday’s dip to have been the expected correction, albeit twice as large as anticipated.
Crude Oil Apr (CLJ) All hat. A very large hat. Pessimism: Thursday’s open gapped down, the afternoon probed the morning’s low, and (essentially) the entire session was spent in negative territory. Ineffectual: The close was back above the morning’s low. This consolidation of the prior two days’ firming, occurring just under the prior week’s highs, suggests buyers have regrouped to attempt another rally Friday. Ineffectual Pessimism doesn’t launch durable legs, so failing to extend higher could be bearish.
Natural Gas May (NGK) Trash compactor. Thursday’s close under 4.93 (basis May, 4.88 basis Apr) gave sellers traction. A close above it would rob sellers of their traction, and back above 4.98 would give buyers traction targeting 4.26. Probably higher to compensate for the delay. Otherwise, the pattern is vulnerable to sinking further, but I am only interested in a long-entry to capitalize on the past two weeks’ accumulation.
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Daily Spot coverage schedule is: Currencies (Mon), Metals (Tue), Energies (Wed), Rates (Thu), Weekender (Fri).