Daily Spot: Week ender.
A weekly summary of one complex, including daily updates of other developments elsewhere.[pay]
Dollar Basket Jun (DXM) Whiplash remedy: Bed rest. The only way to avoid lower lows following Thursday’s drop was to gap up above its 76.20 intraday highs. Friday did that, and so much more, extending up sharply to new relative highs at 76.87. Then it fell all the way back into negative territory.
Friday’s low filled the gap back down to Thursday’s close – and held on a closing basis. So, despite plunging from Friday’s high, sellers didn’t gain traction on Friday’s close. So much volatility without any net move suggests non was left on the table. Its effects should dissipate over the weekend. But lower lows remain unavoidable if another recovery isn’t attempted by Tuesday morning.
Gold Jun (GCM) Make, or break. Friday’s opening plunge from the 1439.00 area retraced all of Thursday’s gain from Wednesday’s closing test of 1424.00 – all the way down to 1413.50. Its 1430.00 close retraced 61.8% of the intraday drop, so opening Monday back under 1424.00 would signal another downleg underway. Otherwise, recovering another dip under 1424.00 would all but marginalize sellers to allow new highs up to 1455.00.
30-year Treasury Jun (USM) Accumulation, waiting for a trigger. Despite gapping down to prior lows at 119’20, Friday’s close had recovered well into positive territory at 120’16. The gap open was not a new low, warning immediately that its sellers were not substantial. Even the impending weekend’s illiquidity couldn’t help a new low intraday from extending down. Friday’s low does not require being retested, and closing positive gave buyers a benefit of the doubt – although closing just a little higher, above 120’16, would have been a buy signal. A little backing and filling down to 120’02-120’07 Monday can precede extending the recovery, so long as 119’25 support holds on a closing basis.
Crude Oil May (CLK) Target closing in. Friday’s rally to new highs was still short of the 108.25-108.50 target. This is not a market that necessarily mimics Friday’s action on Mondays, so there’s no assurance of extending higher Monday. But extending higher anyway to fulfill the target and then close back under Thursday’s 105.50 low would seal a top and reverse momentum down sharply.
Natural Gas May (NGK) Its strength is that sellers are weak. The 4.44 buy signal wasn’t likely to trigger on its first test, not when that first test came so quickly after Thursday’s steep intraday recovery. Likelier was one or two days of backing and filling down to the 4.30-4.35 area. The area was tested already throughout Friday, which closed back above 4.35. I would not be surprised if this support were retested Monday. The pattern is still bullish so long as 4.35 holds as support on a closing basis.
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Daily Spot coverage schedule is: Currencies (Mon), Metals (Tue), Energies (Wed), Rates (Thu), Weekender (Fri).