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Daily Spot: Metals – If, Then… Market Timing

Daily Spot: Metals

By Rod David | December 22, 2010 - 1:19 am

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

Gold Feb (GCG) Closing Tuesday above Monday’s high confirmed that Monday’s close above 1381.00 did put into play a retest of the prior week’s 1407.00 test. Tuesday’s low even held an attack on 1381.00, making the close’s recovery that much more potent.

It is potentially a problem that Tuesday’s close was only modestly above Monday’s high, and could have been more decisive. But buyers get benefit of the doubt.

Dollar Basket Mar (DXH) A pullback Tuesday had room down to 80.60 without sellers gaining traction. The dip to 80.60 recovered to close positive on the day. The close was still in the process of testing  Monday’s high, instead of breaking it clearly. Buyers may not have gained any traction for their effort. The rally should resume aggressively immediately at this stage if its valid.

30-year Treasury Mar (USH) Tuesday’s pullback held Monday’s low, forming a little triangle that should produce at least one more higher high targeting 123’06 and potentially 124’00. Friday’s

Crude Oil Feb (CLG) Tuesday’s action firmed a little further back towards the two-week old opening gap up at 91.10. Narrowly ranging sideways doesn’t equate to basing, being extended but not wide. A test 91.10 could extend higher temporarily, but not durably.

Natural Gas Jan (NGF) Failed to close above 4.21 Tuesday, whose recovery Monday had helped to forecast 1-2 strong up-days. Closing under 4.11 signaled momentum reversing down. Closing while in the process of testing 4.06 allows for another recovery attempt. Without it Tuesday, the recovery scenario is very much at risk. Wednesday’s close must reject Tuesday’s drop either by closing back above 4.21, or back above 4.06 after probing Friday’s low. Otherwise, new lows are in-play, and  new lows would destroy the multi-month basing pattern.

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

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