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Long Bond's Action Is Now Predicting Upcoming Volatility


Gold's action yesterday already started flashing the same warning.

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 near capitulation Tuesday night is suggesting a lot of commodity volatility just ahead.

Dollar Basket
Tuesday's attack on the 84.45 buy signal had stopped pessimistically short, so Wednesday's gap down back to 83.55 shouldn't be able to extend.

Jun Contract EC; (NYSEARCA:FXE)
Tuesday's drop from 1.2955 resistance was retraced entirely overnight. Wednesday held 1.2955 resistance, but the drop has once again lost momentum without closing back under 1.2875.

Apr Contract GC; (NYSEARCA:GLD)
Wednesday's gap up and $10 sideways range formed an inside day without predictive value. But the next trending beyond 1377.00-1398.50 is still likely to trend sharply.

May Contract SI; (NYSEARCA:SLV)
Wednesday's narrow inside day was not predictive, and the week-old 21.80 opening gap below should still be filled.

30-year Treasury
Jun Contract US; (NYSEARCA:TLT)
Sharply lower lows Tuesday night down to 139-29 were recovered before Wednesday's open, and the session never really probed under 141-00. Closing under 141-05 would resume the decline. There is otherwise resistance up to 142-00 and then 142-24 before assuming a bigger bounce is underway.

Crude Oil
Apr Contract CL; (NYSEARCA:USO)
Tuesday's bounce to 96.00 resistance was rejected immediately. Wednesday's gap down to 94.35 bounced momentarily to 95.15 before reversing much lower to 93.10. Back above 94.70 would now be credible for retesting and then breaking above 96.00 targeting 98.10.

Natural Gas
Wednesday's fresh pullback lows held a test of 4.11 (basis Jul, 4.05 basis Jun) but stopped short of recovering above 4.22 to signal momentum reversing up.

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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