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

Daily Spot: Interest rates

By Rod David | May 26, 2011 - 4:26 pm

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

30-year Treasury Jun (USM) Squeaky wheel finally getting grease. Has the repeated testing of 125’06 finally chipped away at its resistance. Reactions down all failed to gain traction before being recovered. And Thursday’s new high up to 126’00 suggests that a breakout is underway. Its target is 126’30 so long as Friday confirms by closing higher for a second consecutive session, and 125’06 holds as support.

Dollar Basket Jun (DXM) A little late for such selling drama. Thursday was a little late to finally force a gap down, considering that price has been under pressure since Monday’s open gapped up. An intraday bounce narrowly missed filling the gap back up to Wednesday’s close, reflecting pessimism to suggest the bottom may be in. Initial strength Friday would be credible for extending higher into the weekend.

Gold Jun (GCM) No Island, but no rally either. Thursday’s gap down wasn’t deep enough to form an Island from Tuesday and Wednesday’s ranging. And the morning’s 1514.60 low already filled the gap back to Monday’s 1515.70 close, so now an Island isn’t possible. A close above 1527.00 would signal the corrective rally extending higher, confirmed above 1530.00 and targeting 1557.00-1560.00. Until closing above 1527.00, a dip should test 1511.50, whose break lower would trigger a bigger drop targeting 1501.00.

Crude Oil Jul (CLN) Reacting down from resistance. Wednesday’s rally to the range’s 101.50 upper-end was retraced back under 100.00 Thursday. Closing under 9935.00-99.50 would signal momentum reversing down, targeting 98.75. But a fresh high close above 101.50 would get a benefit of the doubt for triggering a rally.

Natural Gas Jul (NGN) Absorbing a big dip. Modest weakness down to 4.30 (basis Jun) into Thursday’s open was exacerbated down to 4.20 in reaction to EIA. Despite the sizable plunge, the close recovered above 4.30 to maintain the rally’s momentum. Basis July, closing above 4.40 (basis Jul) should signal the rally has resumed.

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

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