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Long Bond Might Be Set to Bounce


The long bond got its target out of the way, and now might bounce into Friday's nonfarm payrolls.

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: Gold's surge Wednesday tried to undermine the bearish scenario. Good job. But the bullish scenario remains suspect. Meanwhile, the long bond held a test of its target, allowing it to greet the Employment Situation report in bounce mode.

Dollar Basket
Rather than immediately reject Tuesday's break lower, Wednesday's gap down extended to fresh lows testing 79.25, targeting 79.05.

Mar Contract EC; (NYSEARCA:FXE)
Tuesday's break higher wasn't rejected immediately Wednesday, and instead extended to fresh highs attacking 1.3560, targeting 1.3635-1.3640 so long as 1.3460 now holds as support.

Apr Contract GC; (NYSEARCA:GLD)
Wednesday's opening surge immediately recovered Tuesday's high and 1670.00 to undermine the downleg's momentum. The bounce could test 1687.00-1691.00 before considering it to be a new upleg. Otherwise, closing back under 1677.00 would suggest the bounce had ended, and back under 1670.00 would resume the decline targeting a test of 1637.40.

Mar Contract SI; (NYSEARCA:SLV)
The corrective bounce extended to test 32.25, which could prove very bearish if extended up to 32.50 without first completing the pullback down to 30.25.

30-Year Treasury
Mar Contract US; (NYSEARCA:TLT)
Tuesday's retracement back to Monday's 143-04 lows extended down Wednesday to probe the 142-26 target down to 142-19. Its reaction up on the FOMC statement probed back above 143-04 to rob sellers of their traction. Closing back above 143-18 should signal momentum reversing up, potentially greeting Friday's Employment Situation report in rally mode.

Crude Oil
Mar Contract CL; (UNYSEARCA:USO)
Friday's pre-open probe of fresh highs tested 98.25. Not printing above 98.00 intraday suggests that pessimism remains alive and well, enough so that squeezing outstanding shorts can fulfill the minimum 99.00 target.

Natural Gas
Wednesday's gap up immediately recovered 3.29 to signal the pullback had held its 3.25 target. The 3.36 confirmation was only attacked.

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.
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