Daily Spot: Interest rates
A weekly summary of one complex, including daily updates of other developments elsewhere.[pay]
30-year Treasury Dec (USZ) The Double Top pattern’s retracement of more than 61.8% was consolidated. Its break is now underway. Wednesday’s confirmation of Tuesday’s sell signal (closing under 131’25) entrenched sellers. Lower lows are now a requirement, but with no particular timing other than preceding a close back above the 131’25 signal.
In fact, Thursday’s price action ranged narrowly without probing a fresh low. This ineffectual optimism is in-line with Wednesday’s low, which avoided touching September’s prior low (dashed line). The margin (circled) reflects a similar optimism from which any bounce would be doomed to failure.
The current downleg’s target is 128’14. A close under 128’04 would signal the next downleg underway, targeting the 125’16 area.
Dollar Basket Dec (DXZ) Three consecutive sessions had rallied aggressively from end of a trading range to the other. The last session filled an outstanding gap, neutralizing its attraction above, without gaining traction to extend the rally naturally. The vulnerability to reversing down sharply was manifest in Thursday’s steep one-day drop. Closing under 73.35 77.35 would signal the drop extending, targeting 76.85 and 76.65.
Gold Dec (GCZ) Three consecutive sessions had fallen sharply from end of a trading range to the other. The last session filled an outstanding gap, neutralizing its attraction below, without gaining traction to extend the drop naturally. The vulnerability to reversing up sharply was manifest in Thursday’s steep one-day rally. Closing above 1347.00 would signal the rally extending, targeting 1359.00 and 1363.00/1366.00.
Crude Oil Nov (CLZ) Thursday’s session made only negligible gains, despite Wednesday’s recovery from probing under 81.50-81.55. This suggests Wednesday’s dip was not bullish. A close under 81.50-81.55 would still trigger the next downleg.
Natural Gas Nov (NGZ) The reaction EIA met more of the same pessimism / tempered optimism that continues to make this bottoming effort so credible. The eventual recovery through 3.80 extended higher nearly a dime to attack 3.90. So long as 3.80 now holds as support, the 3.98-4.03 area is targeted. And except for some resistance there from “higher prior lows,” this current leg could extend to 4.17 before correcting.
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Daily Spot coverage schedule is: Currencies (Mon), Metals (Tue), Energies (Wed), Rates (Thu), Softs (Fri, coming).