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Long Bond's Shorts Can't Tolerate Another Bounce Here


Take a look at today's action in currencies and 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 Wednesday confirms that last week's bounce was only "obligatory." The probe under last week's lows is unlikely to form a bottom on its first day. But look out above if another fresh lows is suddenly rejected. If a bigger downleg isn't underway, then the alternative should be a big, big bounce.

Dollar Basket
Tuesday's test of 80.05 support held Wednesday, but only for price to firm, suggesting a trading range as described here yesterday is beginning.

Mar Contract EC; (NYSEARCA:FXE)
Fresh highs Wednesday were retraced back under 1.3465-1.3475 resistance to continue suggesting the recent bounce had peaked, but no distribution pattern has formed to indicate a reversal.

Apr Contract GC; (NYSEARCA:GLD)
Hovering around unchanged broke lower after the close to attack Tuesday's 1639.50 low, presumably resuming the decline.

Mar Contract SI; (NYSEARCA:SLV)
Wednesday's break back under 30.80 is presumably resuming the decline targeting 30.25.

30-year Treasury
Mar Contract US; (NYSEARCA:TLT)
Tuesday's weak session was nonetheless optimistic to barely avoid touching its 143-04 sell signal. Wednesday's open compensated by gapping down and extending to new lows at 141-09, confirming the previously signaled 140-26 target is in-play, so long as 143-04 isn't recovered.

Crude Oil
Mar Contract CL; (NYSEARCA:USO)
Wednesday's inability to extend higher is not immediately a concern to the bullish pattern, since Tuesday's gap up did maintain its intraday extension. But the patience that was earned Tuesday is now unavailable, requiring Thursday to immediately resume the rally targeting 99.00.

Natural Gas
Delaying lower lows again Wednesday does give credibility to a rally attempt Thursday, so long as it is maintained beyond the EIA report, and extends meaningfully above 3.36.

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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