Daily Spot: Interest rates
A weekly summary of one complex, including daily updates of other developments elsewhere.[pay]
Gold Jun (GCM) That was big, but not big enough. Monday’s “ineffectual pessimism” gave way to some very effective pessimism. An overnight dip tested the rally’s original 1455.00 target as support, but entered the regular session back above 1463.50 to suggest that selling pressure had been absorbed. That didn’t prevent an intraday swoon that probed 1447.00-1449.00 down to 1445.00. Closing above 1455.00 would have signaled sellers gained no traction for their efforts (again), but it was still being tested at the close. Now a close above 1463.50 would target new highs near 1480.00, and a close under 1447.00 would trigger a bigger drop underway.
Dollar Basket Jun (DXM) The downleg is getting complacent. Monday’s action had fulfilled any downside objective to allow a bottom to form, but did not require a bottom to form. In fact, Tuesday’s open gapped down and probed fresh lows. But that gap down was slightly above Monday’s intraday low, and the gap back up to Monday’s close was nearly filled. Ultimately, the session closed under Monday’s low, but above Tuesday morning’s ranging. Once again, there is potential to rally without leaving any unfinished business below, but no signal requiring it.
30-year Treasury Jun (USM) A big correction, if it’s over. Monday’s second consecutive session of “ineffectual pessimism” produced a gap up Tuesday that tested the 119’04 bounce limit. Higher highs intraday tested 119’18, whose recovery would signal a much bigger rally underway to 120’16-120’25. Closing back under 119’04 would have been optimal to confirming the downleg targeting 117’00 was still in-play.
Crude Oil May (CLK) The reaction down has outgrown itself. The rally’s 113.00 target had reacted down substantially Monday. It extended down even further Tuesday. RSIs diverged only modestly on an overnight test of the rally’s prior target at 108.25-108.50 as support. Its bounce to 110.20 was reversed intraday to probe 105.50. And the trend remains down so long as 107.00-107.50 holds as resistance. A lot of selling pressure has been expended very quickly, increasing the potential to recover 107.00-107.50. Extending down any further without first refueling sellers would make a long-entry more interesting.
Natural Gas May (NGK) Little interest. Monday’s rally only left unfinished business below, so no buy signal was triggered. Higher highs might have fulfilled a short-entry parameter, and still might. But otherwise, I am still only monitoring the pattern.
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Daily Spot coverage schedule is: Currencies (Mon), Metals (Tue), Energies (Wed), Rates (Thu), Weekender (Fri).