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Daily Commodity Spot: Did Flight to Safety From Weak Stocks Delay Bigger Drop in Long Bond, or Is Next Leg Up?


A breakdown of the day's six most active commodity futures.

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: A funny thing happened on the way to reversing the long bond's gains… Tuesday's gap down was recovered back up to last week's highs. Did a flight to safety from weak stocks delay a bigger drop, or is the next leg up?

1. Dollar Basket
March Contract DX, ETF: (UUP, UDN)
The rally's 81.80-82.20 target area has been tested repeatedly, but not very thoroughly. Closing back under 81.05 would start to signal that buying was fully absorbed, and that momentum was reversing down. The rally otherwise remains intact; 82.20 is in play.

2. Eurodollar
March Contract EC, ETF: (FXE)
A window has opened for the euro to bottom. Last week's retest of the prior Sunday night's gap down had opened a window, but buyers crawled through it much too optimistically for a rally to generate solid sponsorship. Friday's drop to new lows fulfilled the decline's long-awaited 1.2650 objective. Now, closing above 1.2750 and 1.2825 would signal another recovery effort. But much more of a delay would simply resolve down.

3. Gold
February Contract GC, ETF: (GLD)
Bounce potential to 1665.00 was fulfilled Thursday. Its retest Tuesday reacted down only slightly, suggesting that fresh highs will test the next resistance at 1683.50, but closing under 1647.00 would signal momentum reversing down.

4. Silver
March Contract SI, ETF: (SLV)
Two weeks ago I was tracking a multisession consolidation that was coiling strength, awaiting an explosion higher. It did come, gapping up sharply. But there has been no followthrough higher since then, - only intraday brief probes of fresh highs that have failed - despite gold extending. There is no requirement to play "catch-up," but I would expect rotation at some point to extend the rally.

5. 30-Year Treasury
March Contract US, ETF: (TLT)
Friday's bounce to 145-11 retested the two-week old high, and not just any old high, but the high of an extended rally, whose rejection produced sharply lower lows and a lot of volatility. Tuesday's open gapped down to test 144-05, then recovered to almost touch Friday's high. There is potential for probing yet higher, but nothing compelling at this stage. Meanwhile, closing under 144-05 would signal momentum reversing back down to last week's lows.

6. Crude Oil
March Contract CL, ETF: (USO)
Last week's retest of the rally's 103.00 target again reacted down, this time after Nigeria's "bullish" news failed to produce much buying pressure. While there remains potential to launch another upleg targeting 111.00, the pattern has yet to prove whether it is accumulation or distribution.

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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