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Daily Spot: Metals – If, Then… Market Timing

Daily Spot: Metals

By Rod David | October 5, 2010 - 7:32 pm

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

[pay]Gold Dec (GCZ) Gold’s bubble keeps inflating. Buyers are not gaining traction in the uptrend, as evidenced by repeated incidences of “ineffectual optimism” along the way.

Most recent was Friday and Monday’s ranging around Thursday’s high without closing above it – after Friday’s open gapped up there and probed higher. There, but for the grace of sellers, went a rally. And it extended sharply higher Wednesday, gapping up $13 and extending another $13 intraday to test 1342.00.

The next higher objective where sellers might finally make a stand is 1349.20, and potentially 1383.50. Their first salvo would be a steep drop that reveals little depth among buyers, sort of an “emperor has no clothes” moment. A recovery and brief distribution back at the highs would interrupt the exodus.

30-year Treasury Dec (USZ) The second consecutive night of probing a fresh high that disappeared by the open, never to be retested intraday, without any renewed selling effort to punish the overnight buyers. That, and only slighter weakness in the face of broad-based buying among stocks, suggests the highs will be retested before resuming the drop. Next targeting 134’27 and potentially 135’20.

Crude Oil Nov (CLX) Monday’s push-back from 82.10-82.15 resistance already ended with Tuesday’s gap up to fresh highs that extended higher. Signs of excessive optimism. The 83.20-83.25 target remains in-play, with greater potential to hold the rally.

Natural Gas Nov (NGX) Inside day.

Dollar Basket Dec (DXZ) Monday’s ineffectual optimism resolved in new lows, but new lows did not recover. The gap down trended down through the morning and stayed down through the close. The open gapped to Friday’s prior low close – not through it – so a recovery Wednesday might not leave unfinished business below.

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

Posted in Daily Spot