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Daily Spot: Metals – If, Then… Market Timing

Daily Spot: Metals

By Rod David | September 28, 2010 - 7:42 pm

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

[pay]Gold Dec (GCZ) Many bearish elements have been piling up, but hovering for so long just under a round number was going to probe it. Tuesday’s open gapped down to the range’s lower-end, but the balance of the session rallied sharply to and through 1300.00. Room for noise up to 1313.00 around Tuesday’s high need not be touched.

A “pivot reversal” would form from closing under Tuesday’s low. Gapping down in an uptrend following fresh highs, then recovering to new highs, only to close back under the gap down’s low. The setup normally forms intraday, but can develop over 2-3 days.

A close under 1286.50 would signal that momentum had reversed down, and under 1282.00 would confirm. Tuesday’s rally does create extra room to absorb selling, and closing above 1286.50 after probing 1282.00 intraday would be bullish. Otherwise, the beginning of the end is in sight.

30-year Treasury Dec (USZ) Monday’s “inside day” trended up, so its first trending attempt was likely to be false. The trending attempt probed prior highs. Pullbacks have room down to 133’10 before sellers gain traction to 132’10, where a lower close would signal momentum reversing down, confirmed under 131’25. Noise around Tuesday’s 134’10 high could touch 134’27.

Crude Oil Nov (CLX) Attacked 77.00 but didn’t break through. Still holding 75.65 support, but the delay is not bullish. Closing under 75.55 would signal the Head & Shoulders was reasserting itself.

Natural Gas Nov (NGX) Rallied back to 4.00 which is likely to hold as resistance. Gapping above it could have formed Island, but now fresh lows are likely.

Dollar Basket Dec (DXZ) Tuesday further confirmed the developing pattern by not rallying after Monday failed to confirm Friday’s breakout. The pattern now targets new lows around 78.82, and then a close above Tuesday’s ~79.05 low similar to the Friday/Monday pattern. A substantial rally should then be underway by Wednesday afternoon or Thursday morning.

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

Posted in Daily Spot