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Did Longer Treasuries Just Run Out of Buyers?


How to interpret today's commodity price action.

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 30-year Treasury's behavior Thursday suggested stocks had become vulnerable to reversing down. They had. But the stock market's loss may have been the bond market's loss, too. While another flight-to-safety Friday did help the bond to rally, its rally neutralized the attraction above.

Dollar Basket
Jun Contract DX; (UUP), (UDN)
Closing above 79.70 Friday would have signaled a new upleg underway. Friday's open gapped above it, and extended sharply higher to test 80.05. Closing Monday above 81.10 would confirm a new upleg underway. This is likely since Monday mornings tend to mimic Friday's behavior in currencies.

Jun Contract EC; (FXE)
Friday's open gapped down to 1.3145. It had served as resistance twice earlier in the week. Thursday's gap above it tried to trigger a breakout, which a second consecutive higher close would have confirmed. Now a second consecutive lower close Monday would confirm a new downleg underway.

Jun Contract GC; (GLD)
The gap back to last Tuesday's 1672.00 close was filled Thursday. It was exceeded through the close up to 1681.00. The bounce's 1688.00 target might not be met. Friday's reaction tested 1657.00-1661.00 support down to 1650.00. Closing back above 1661.00 Monday could renew the rally effort. Otherwise, closing under 1657.00 would resume Friday's decline, likely to probe recent lows under 1600.00.

May Contract SI; (SLV)
Having recovered 32.30 Thursday, it became support, and was required to hold to prevent the decline from resuming. Friday's open gapped down to 32.30 and extended down sharply intraday to test 31.45. A second consecutive lower close Monday would put into play 29.50. Otherwise, a bounce off of 31.45 support would target 32.30.

30-year Treasury
Jun Contract US; (TLT)
The gap back up to 141-12 needed to be filled before a downleg could gain traction. This attraction above helped to absorb the initially negative knee-jerk reaction to Thursday's auction. Falling stocks Friday helped to trigger a gap up that extended to 141-25, but ending the session while testing 141-12. The gap was filled, and another was created - below, at Thursday's 140-15 close - to help attract price down and trigger a pullback targeting at least 138-20.

Crude Oil
May Contract CL; (USO)
Friday's session-long weakness prevented fulfilling the 104.70 bounce target. Its reaction down failed to maintain 103.00-103.25 support, and the bounce's momentum. But 102.25 did hold, which at least prevents sellers from gaining traction. The pattern remains unattractive until breaking beyond 98.85-104.70.

Natural Gas
May Contract NG; (UNG)
Seemingly "bad" news Friday (rising production during falling demand) had negligible effect on price action. This is probably only wider dissemination of news that has been driving price down. It's not a buy signal, but it can be constructive to forming a bottom.

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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