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Daily Spot: Metals – If, Then… Market Timing

Daily Spot: Metals

By Rod David | May 24, 2011 - 5:18 pm

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

Gold Jun (GCM) A breakout is a breakout, until it’s not. 1319.00 was recovered Tuesday to signal a corrective rally underway targeting 1357.00-1360.00, so long as pullbacks now hold any test of 1512.50 as support. The correction could extend to new highs before failing. Or it could fail immediately Wednesday, especially on a gap down that would form an Island of Tuesday’s price action. It has been difficult to justify rising Gold price while other metals were falling and the Dollar was rallying. At least metals have reversed up, but metals are unlikely to sustain a rally simultaneously with the Dollar.

Dollar Basket Jun (DXM) Monitoring for a fresh high‘s weakness. Wednesday’s session ranged almost exclusively under Monday’s lows. The ranging also held tests of “lower prior highs” as support. Monday’s opening peak should at least be retested, and the pattern is now ready to produce fresh highs testing 76.60. Its test, followed by a close under 76.30 would be bearish.

30-year Treasury Jun (USM) In the absence of a downleg. Tuesday’s opening dip didn’t extend down. In fact, a spike up on the noon hour’s auction recovered into positive territory. The recovery didn’t extend higher, while testing 125’06 resistance through the close. Now a break back under 124’08 could try again to trigger a downleg. Otherwise, any early strength would be credible for extending higher.

Crude Oil Jul (CLN) Not much excuse to delay the decline. Gapping up at Tuesday’s up filled the gap back to Friday’s ~100.00 close, which held as resistance through the day. Any further strength Wednesday could also test the 101.00 area. But any close under 97.90 would signal a new downleg underway, confirmed by closing under  97.50.

Natural Gas Jun (NGM) Shallow dips should be brief, too. An early dip Tuesday helped to correct Monday’s extension of Friday’s rally. Any weakness should now hold 4.30 as support to maintain the rally next targeting 4.50.

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

Posted in Daily Spot