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Long Bond's Quick Bounce May Be Done Already

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Technical targets for the market's most traded liquid commodities.

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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 bounce Monday may be enough to allow another downleg to begin. The bigger question may not be whether the downleg can resume, or when it will resume, but how big its next move will be, relative to Friday's plunge.

Dollar Basket
Sep Contract DX; (UUP), (UDN)
Monday's gap up never extended higher, and only ranged sideways. A second consecutive higher close would avoid labeling the pattern as "ineffectual optimism," which would be bearish.

Eurodollar
Sep Contract EC; (FXE)
Monday's gap down proved that Friday's retracement of its intraday surge had already reversed momentum down. Closing Tuesday under 1.2215 - preferably after gapping open under it - would confirm an attempt underway to fill the gap back down to last week's 1.2065 close.

Gold
Aug Contract GC; (GLD)
Monday's narrow ranging around the bounce's 1622.00 target without rejecting it makes some fresh high likely. Its failure to close above 1622.00 would be the first indication that momentum may be reversing down.

Silver
Sep Contract SI; (SLV)
Monday morning's surge to fresh highs at 28.10 extended higher after the close to test 28.20. Extending through 28.25 would target 30.00-30.35.

30-year Treasury
Sep Contract US; (TLT)
Monday's corrective bounce came within 2 ticks of its 151-06 objective. A gap back to Friday's 150-03 close was left outstanding, and should attract price back down to resume the decline.

Crude Oil
Sep Contract CL; (USO)
Still no movement Monday off of testing 90.00, further suggesting that 90.00 is not a valid buy signal - at least, not from this "standing start." A dip that then recovers above 90.00 would be more credible for launching an upleg.

Natural Gas
Sep Contract NG; (UNG), (UNL)
Monday's gap up compensated for the rally being delayed by last week's extended test of the 3.05 pullback limit. The 3.26 target was attacked to within $.03. The target remains in-play, with potential for exceeding it up to 3.40, so long as pullbacks now hold 3.10-3.13.

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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No positions in stocks mentioned.
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