Daily Spot: Interest rates
A weekly summary of one complex, including daily updates of other developments elsewhere.[pay]
30-year Treasury Jun (USM) No news wasn’t good news. Thursday’s early volatility seemed like Friday’s Employment Situation report had been released already. Despite the open gapping up from Wednesday’s 120’06 close, through 120’16 to probe 120’25, it was all retraced into negative territory down to 119’23.
Just closing back in positive territory does avoid signaling that sellers gained any traction. But failing to close above 120’16 and 120’25 after testing them intraday also means buyers gained no traction for their efforts. And their traction was needed for helping to absorb any unfavorable reaction to Friday’s report.
Closing under 119’25 would have made a negative reaction likely to the Employment report. Closing positive instead, there is at least potential to retrace and even to reverse the initial knee-jerk reaction. But there is no indication of that ultimate reversal’s direction, not until closing Friday beyond either end of the 119’25-120’16 range.
Dollar Basket Jun (DXM) About that warning shot across the bow... Sellers had not gained traction on Wednesday’s steep drop. But buyers didn’t gain traction, either, from the recovery attempt. That left the pattern vulnerable to extend down, and it did extend down sharply overnight. That was the less likely resolution, the likelier resolution being to retest the week’s 76.70 highs on the way to filling an outstanding gap at 77.00. But this detour could extend down to 75.85 or 75.60 before another rally effort can begin. Gapping up above 76.35 might be able to squeeze higher into the weekend anyway.
Gold Jun (GCM) Something bigger is brewing. Wednesday’s close was in the process of testing 1426’00. That didn’t signal the bounce would extend higher, and it didn’t prevent it. Bouncing was the less likely scenario, but the bounce did extend higher to fulfill its 1439.00 target early Thursday morning. The balance of the session ranged sideways. There was no basing that required testing 1439.00, and there is no unfinished business above. Extending higher again anyway would all but ensure new highs probing 1455.00. Otherwise, a close under 1424.00 would signal a new downleg underway.
Crude Oil May (CLK) Influx of buyers only trip themselves. One or two extra days spent consolidating Monday’s drop did not make a rally attempt any less likely. But the delay did make the rally unlikely to be durable. The rally was finally attempted by Thursday’s gap up that extended to probe last week’s high. New highs remain likely, targeting 108.25-108.50 so long as pullbacks now hold 105.50. But the delay makes the rally likely to form a much more durable top.
Natural Gas May (NGK) That was quick. EIA triggered a retest of Wednesday’s low, filling the gap back down to Tuesday’s close, while also probing Tuesday’s low. All unfinished business below was neutralized, allowing a retracement of the excessively pessimistic drop from 4.55. The recovery didn’t wait long after neutralizing attractions below. It didn’t even wait an entire session. The drop was quickly absorbed to close back up near 4.44, whose recovery on a closing basis would signal the next upleg underway.
[/pay]
Share your questions and comments on this post in the blog, or in the chartroom…
Daily Spot coverage schedule is: Currencies (Mon), Metals (Tue), Energies (Wed), Rates (Thu), Weekender (Fri).