Daily Spot: Week ender.
A weekly summary of one complex, including daily updates of other developments elsewhere.
[pay]Dollar Basket Dec (DXZ) Friday’s bounce didn’t gain traction. That was in-line with Thursday’s dips not having been deep enough to offset Wednesday afternoon’s excessive optimism, which had avoided filling a nearby gap. This maintains the potential for dipping to 76.65 where a more durable bottom can form. Closing first above 78.00 would get a benefit of the doubt, and would likely fill the gap to Tuesday’s close around 78.50. Otherwise the gap to Tuesday’s close will likelier remain outstanding to help attract a recovery from 76.65.
Gold Dec (GCZ) Friday’s relatively narrow range did not deteriorate any further. But the range did hover optimistically above three-week old “lower prior highs” from the rally. A bounce to 1335.00-1336.00 is likely before reusuming decline. Closing above 1344.00 would put into play a test of 1358.00, probably up to 1363.00 or 1366.00. That opportunity has otherwise passed.
30-year Treasury Dec (USZ) Friday morning’s bounce left the balance of the day to range around 131’25, whose test Thursday tried to trigger a sell signal. The open’s gap down had tried to confirm, but that also stopped short of gaining traction. The shallow dip does reflect too much optimism to form a bottom. And the recovery back to 131’25 did not gain traction. There remains potential to resume the decline, but a bounce up to 132’20 first cannot be ruled out.
Crude Oil Nov (CLX) Friday’s session was an inside day. Its opening gap quickly peaked, and the morning’s dip from there stopped optimistically short of filling the gap back to Thursday’s close. The open and closing action essentially tested “higher prior lows” at 81.50-81.55. An inside day, on a Friday, that gains no traction while holding a test of resistance – it could not be any less influential. Further gains intraday cannot be ruled out, but the pattern remains intact targeting 77.75.
Natural Gas Nov (NGX) Friday’s drop to new lows was the second consecutive lower new low following Wednesday’s bounce that had closed above prior lows. This is a breakout and its confirmation, all but ensuring a new low Monday. Positive divergences among RSIs at Friday’s low suggest a new low would not extend. A new low that recovers to close positive would trigger at least a near-term corrective bounce.
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Daily Spot coverage schedule is: Currencies (Mon), Metals (Tue), Energies (Wed), Rates (Thu), Softs (Fri, coming).