Daily Spotlight: Interest rates

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

[pay]30-year Treasury Dec (USZ) Thursday’s econ reports exploited a weakened pattern. The prior day’s ranging had neutralized both freshly created gaps, without triggering a break either way. Typically, gapping beyond the range is required to resume trending. An inside day would otherwise be likely.

But Thursday’s open dipped and the morning dived, trending back down to Monday’s low. Monday’s entire Key Reversal setup has been retraced. They always are – and sooner, rather than later, when they try extending higher immediately as this one did Tuesday.

Thursday’s fresh low was also a new low close. But the closing bars were still overlapping prior lows. It’s not clear that sellers have regained momentum. A bounce back to higher prior lows at 130’16 is possible. Closing under 129’18 would signal the downleg had resumed.

Crude Oil Oct (CLV) Thursday’s open gapped down to immediately retrace Wednesday’s session-long rally off the open’s gap down. The morning slid to fresh lows. The balance of the session consolidated, and a close back above 75.00 would trigger another bounce leg. Closing under 74.15 would indicate that a downleg was already underway.

Natural Gas Nov (NGV) Prior lows were attacked, but not probed under 3.85. This still neutralized the rally that wasn’t gaining traction. The afternoon already rallied back to and through Wednesday’s 4.05 high. Now RSIs are diverging negatively, so the rally’s health depends upon extending higher without delay.

Gold Dec (GCZ) Not having reacted down much from Tuesday’s test of its 1275.00 target, Thursday’s open gapped up to retest it. The entire session was spent ranging in positive territory, probing fresh highs. This excessive optimism helps to rob buyers of their traction, and now a break under the 1265.00 interim low would be bearish.

Dollar Basket Dec (DXZ) Despite dipping back under 81.50 intraday, it held on a closing basis. Back above 81.65 would confirm the decline’s delay will extend into Monday.

[/pay]

Share your questions and comments in this blog post’s Comments section, or during the chartroom’s What’s Next morning market tour, and in the day’s end Markets on Close…

Weekly Spotlight coverage’s schedule is: Currencies (Mon), Metals (Tue), Energies (Wed), Rates (Thu), Softs (Fri, coming).