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Daily Spot: Interest rates – If, Then… Market Timing

Daily Spot: Interest rates

By Rod David | April 27, 2011 - 4:51 pm

A weekly summary of one complex, including daily updates of other developments elsewhere.[pay]

30-year Treasury Jun (USM) Not a good day in the spotlight. Wednesday’s session did not improve above 122’02, which was still being tested as resistance at Tuesday’s close. Trading flat-to-lower was the opposite of closing higher, which would have confirmed the breakout. However, the gap back up to Tuesday’s 122’04 close should be retested, whether to launch a more durable downleg, or to resume the rally.

Dollar Basket Jun (DXM) Another bottoming window is rejected. Still testing prior lows at Tuesday’s close did not equate to having recovered from probing new lows. Closing above Tuesday’s high still would have been bullish. But intraday tests of Tuesday’s high were rejected by a steep drop to new lows for the trend, which remains down.

Gold Jun (GCM) Excessive buying on excessive optimism. The bounce from Tuesday’s drop extended up to probe Sunday night’s 1519.00 area highs. The regular close exceeded it, and post-close action has tested 1530.00. Since Tuesday’s drop stopped short of touching the 4-day low, Wednesday’s higher high is vulnerable to being only a retest of Monday’s (Sunday night’s) high.

Crude Oil Jun (CLM) No unfinished business above. Despite Wednesday’s weaker open down to 110.71, a substantial intraday turnaround probed Monday’s 113.22 opening gap up to 113.40. This was just short of touching prior intraday highs, which may be enough pessimism to avoid a downleg. Regardless, closing under 112.30 would signal the bounce’s momentum had ended. But a close under 111.65 is needed to signal momentum reversing down.

Natural Gas Jun (NGM) Narrow, extended ranging is not accumulation. Tuesday’s consolidation was unnecessary following Monday’s consolidation. So, Wednesday’s consolidation did not help the rally potential at all. Especially since Tuesday’s close had snapped back from touching the range’s low, and Wednesday’s open tried initially to extend higher. The 4.55 target is still possible, but now its test is likely to hold as resistance.

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Daily Spot coverage schedule is: Currencies (Mon), Metals (Tue), Energies (Wed), Rates (Thu), Weekender (Fri).

Posted in Daily Spot