Long Bond's Failure Monday Can Now Fulfill Downside Objectives

By Rod David  DEC 17, 2012 3:47 PM

Take a look at the intraday action in commodities.

 


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: The long bond’s plunge Monday back to last week’s lows proves its interim bounce was sponsored by weak hands. The attraction to nearby fresh lows must be fulfilled and rejected quickly to avoid a deeper prolonged decline.

Dollar Basket
Mar Contract DX; (NYSEARCA:UUP), (NYSEARCA:UDN)
Monday’s gap down  and probe of fresh multi-session lows, spending the entire session in negative territory, was pessimism. Not closing under Friday’s 79.60 prior lows is “ineffectual pessimism.” The decline must extend lower without delay Tuesday, or else it is bottoming.

Eurodollar
Mar Contract EC; (NYSEARCA:FXE)
Monday’s gap up and probe of fresh multi-session highs, spending the entire session in positive territory, was optimism. Not closing above Friday’s 1.3714 prior highs is “ineffectual optimism.” The rally must extend higher without delay Tuesday, or else it is peaking.

Gold
Feb Contract GC; (NYSEARCA:GLD)
Monday’s overnight attempt at resuming the decline failed for not first bouncing temporarily above Thursday’s 1703.60 high. That’s still possible, but no longer assured of failing.

Silver
Mar Contract SI; (NYSEARCA:SLV)
Monday’s fresh lows attacking 32.00 reacted up only to test Thursday and Friday’s ~32.25 prior lows as resistance. The trend remains down unless 32.60 is recovered through the close.

30-year Treasury
Mar Contract US; (NYSEARCA:TLT)
Thursday’s recovery had formed a weak base that doomed Friday’s 148-19 higher highs to failure. Mondays deep decline back to last week’s 147-09 lows resumed the decline targeting 147-00.

Crude Oil
Jan Contract CL; (NYSEARCA:USO)
Last week’s failed attempts at launching a downleg under 86.50 were punished by returning to the 87.65 prior high. Back under 86.50 would again target fresh lows.

Natural Gas
Jan Contract NG; (NYSEARCA:UNG), (NYSEARCA:UNL)
Friday’s modest gap up ranged very narrowly around Monday’s 3.36 highs. The pattern can be exploited to launch a durable rally, but probably only without any further delay past Tuesday’s open.

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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