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Long Bond Picked Wrong Time to Try Flushing Out Sellers


Probing new lows ahead of the employment situation report is dangerous.

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 pattern finally fulfilled its outstanding objective to produce at least one more new low close. Doing so ahead of Friday's employment situation report without reacting back up into the close was not the recipe for a bottom.

Dollar Basket
Wednesday's drop to 82.10 support resolved up sharply Thursday. Closing above 82.75 Friday would confirm the rally had resumed, its higher targets in play.

Sep Contract EC; (NYSEARCA:FXE)
Holding the 1.3220 bounce limit intraday and overnight Wednesday allowed Thursday's opening plunge to probe fresh lows under 1.3145. Avoiding a second consecutive lower close is the minimum requirement to even suggesting a bottom may be forming.

Dec Contract GC; (NYSEARCA:GLD)
Closing back under the 1404.50 pullback limit Tuesday did not form a downleg, only a drop to the wide range's lower end. Rallying sharply through Thursday's open did not prevent an even deeper drop Thursday testing 1365.00. Closing back above 1377.00 would have robbed sellers of their traction, so holding it as support after gapping up above 1381.00 Friday is the minimum requirement to begin reversing momentum up.

Dec Contract SI; (NYSEARCA:SLV)
Tuesday's Island continued its reversal Thursday by probing under Monday-Wednesday's lows. Sunday night's 23.11 low was also probed, although it ultimately held as support. Back above 23.55-23.75 would trigger a rally leg.

30-Year Treasury
Dec Contract US; (NYSEARCA:TLT)
The drop resumed and extended Thursday down to 128-18, finally fulfilling the pattern's outstanding requirement for at least one more new low close. There was no reaction up intraday, and two-week old overnight action printed lower, so lower lows with potential to 127-04 may be in play.

Crude Oil
Oct Contract CL; (NYSEARCA:USO)
Thursday's close above 108.15 signals momentum has reversed up, targeting at least 110.65.

Natural Gas
Not confirming Tuesday's breakout Wednesday undermined Thursday's gap up that pierced the outstanding 3.70 target. It was reversed back down to the rally's prior target at 3.57. Nevertheless, initial strength Friday would be credible for resuming the rally.

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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