Something About NFP and the Weekend's Illiquidity Sharpens the Mind -- and the Reaction

By Rod David  NOV 02, 2012 2:50 PM

The long bond's corrective bounce continued reacting down aggressively. Even currencies seemed to shake their ongoing ranges.

 


The following are the latest daily summaries of my ongoing intraday coverage, providing context to interpret price action. Any prices listed are for a contract's current "front month." Their direction tends to correlate with any ETFs listed for each.

Today’s Highlight: Between Friday’s Employment Situation report and the weekend’s impending illiquidity, intraday action moved price aggressively. The long bond’s corrective bounce continued reacting down aggressively, as did gold. Even currencies seemed to shake their ongoing ranges.

Dollar Basket
Dec Contract DX; (NYSEARCA:UUP), (NYSEARCA:UDN)
Thursday’s strength did extend higher to its 80.37 target Friday. In fact, the open gapped up there, and then surged to test fresh highs at 80.75. A second consecutive higher close ­ which usually follows a break higher on Fridays ­ would target 82.10, so long as 80.30 holds as support.

Eurodollar
Dec Contract EC; (NYSEARCA:FXE)
Friday’s reaction to the Employment Situation report plunged through 1.2900 and through it to test 1.2840. A second consecutive lower close Monday would confirm a new downleg underway targeting 1.2400.

Gold
Dec Contract GC; (NYSEARCA:GLD)
The corrective bounce up to 1727.00 that closed Thursday back at or under 1717.00 extended down sharply Friday to test 1675.00. That threatens the potential for this drop from 1800.00 to be only a correction, unless 1704.00 were recovered without delay. Otherwise, closing under 1673.00 would target 1605.00-1610.00.

Silver
Dec Contract SI; (NYSEARCA:SLV)
The corrective bounce never fulfilled its potential up to 33.00 before reversing down sharply Friday to 30.82. Closing under 30.75 Monday would confirm a bigger downleg underway targeting 28.15-28.55, but closing above 31.50 would signal that a significant corrective drop had likely ended.

30-Year Treasury
Dec Contract US; (NYSEARCA:TLT)
The reaction down from nearly touching the 149-12 bounce target plunged 1 point Friday to 147-18. It was retraced to back above 148-00, which continues to avoid signaling a bigger downleg underway ­ while also leaving potential to retest 149-12.

Crude Oil
Dec Contract CL; (NYSEARCA:USO)
Although firming to close above 87.00 Thursday suggested 89.00 would be tested before resuming the decline, the decline may have resumed already by falling Friday down to test 85.00. That is essentially the two-week old “pivotal low” that preceded last Monday’s 84.66 actual low, all but requiring a new low ­ presumably the 81.85-82.50 target.

Natural Gas
Dec Contract NG; (NYSEARCA:UNG), (NYSEARCA: UNL)
Multiple consecutive sessions of testing the 3.70 prior low without yet recovering required at least an obligatory low. Friday fulfilled the setup by sliding down to 3.53. Back above 3.70 would signal momentum reversing up. Otherwise, a second consecutive lower close Monday ­ which this market tends to do following a break close on Fridays ­ would confirm a bigger downleg underway.

Editor's note: Rod's analytical techniques are designed to efficiently identify targets and turning points for any liquid stock or market in any time frame. He applies his techniques live intraday, primarily to S&P futures, at RodDavid .com.
No positions in stocks mentioned.

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