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Daily Spot: Week ender. – If, Then… Market Timing

Daily Spot: Week ender.

By Rod David | October 17, 2010 - 5:21 pm

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

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Gold Dec (GCZ) The 1383.50 resistance was retested overnight Thursday and again into Friday’s open. It held both tests. The close was once again in the process of testing 1370.50 support instead of breaking cleanly under it. So there remains potential for this topping attempt to retest Friday’s 1386.20 opening gap, and Thursday’s early-morning ~1388.00 high. The path there might dip first to 1352.50.

30-year Treasury Dec (USZ) Thursday’s break extended sharply lower to test 130’26. This leg should include a test of 130’10. Bouncing first to test 131’22 would make 131’10 less likely to hold this first test as support.

Crude Oil Nov (CLX) Friday’s close under 81.55 suggests that buyers have lost momentum. It does not yet indicate a near-term top is in. A close under 81.00 would target 76.90, which could launch a retest of the recent highs above 84.00.

Natural Gas Nov (NGX) Another opportunity to reverse momentum up was seemingly lost by Friday’s gap down that extended to a new low close. The closing action was still in the process of testing Tuesday’s prior lows, but Natty Gas is not friendly historically to a Friday bottom. A substantial recovery Monday from probing new lows intraday would be very credible for reversing momentum up. There is otherwise no active pattern.

Dollar Basket Dec (DXZ) Friday’s new low was the product of gapping open down to Thursday’s low. This retest cannot be a permanent bottom since there was no interim touch of “higher prior lows,” but it can suffice for launching a substantial multi-week corrective bounce. A durable bottom would first retest Thursday’s 76.66 gap open. This would now be valid since the balance of Friday’s session did rally to test “higher prior lows.” Otherwise, simply extending higher to close above 77.60 would suggest a corrective rally was underway.

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

Posted in Daily Spot