Daily Spot: Interest rates

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

30-year Treasury Dec (USZ) Thursday continued improving after Wednesday’s test and retest of the 128’14 and 128’03 targets. The subdued bounce wasn’t overly optimistic, so may be able to extend its 129’24-130’00 bounce objective to 130’12-130’16.

For as long as 128’14 has been targeted, the brevity of the move suggests it will not be the ultimate low. Although the corrective bounce can extend a little further, it need not, and the decline can resume at any time.

Dollar Basket Dec (DXZ) Wednedsday’s ineffectual optimism wasn’t bearish, but it could have been if Thursday’s open had gapped down. Gapping up instead was bullish.

Gold Dec (GCZ) The attraction back to Tuesday’s 1417.80 opening gap was essentially filled Wednesday night (within 20 cents). This allows the pattern to resume its decline any time. Not resuming the drop by Friday’s open would make a more thorough test of 1417.80 likely.

Crude Oil Nov (CLZ) Wednesday night’s action fulfilled the 88.40 target, and retested it while RSIs diverged negatrively. A close under 86.50 would signal momentum reversing down. Not reversing down by Friday’s close would make the rally more likely to extend further, next targeting 91.50.

Natural Gas Nov (NGZ) The shock of Wednesday’s steep reversal was still being absorbed Thursday, extending down further to test 3.92. The rally could resume as early as Friday afternoon, or Monday afternoon, by recovering 4.15. Delaying the recovery any longer, or closing any lower, would suggest the rally off of October’s low was just a monster correction that is ready to resume the decline.

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