Is the Long Bond Forming a Bottom?

Minyanville

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.

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Today's Highlight: The long bond's test of major support Monday was made painfully obvious to Tuesday morning's sellers who were squeezed two points off the low and well back into positive territory.

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Dollar Basket
Jun Contract DX; (UUP), (UDN)
The attraction below 81.33 was fulfilled Tuesday morning, but not very constructively. The open's gap down was shallower, and didn't extend down until after filling the gap back to Monday's 81.65 close. That neutralized its attraction above, and last week's 81.00 lows should still be probed.

[More from Minyanville.com: The Long Bond Tested Support Today ]

Eurodollar
Jun Contract EC; (FXE)
Tuesday's retest of last week's ~1.3305 high still stopped short of testing the 1.3333 objective.

Gold
Aug Contract GC; (GLD)
An overnight plunge to new lows extended lower Tuesday to test 1365.00. Friday's 1377.00 "higher prior low" was tested as resistance. Recovering it through two consecutive closes would rob this downleg of its momentum. Meanwhile, at least 1351.00 remains in-play.

Silver
Jul Contract SI; (SLV)
Two days of ranging around the drop's 21.80 target allowed the drop's momentum to remain intact. Tuesday's gap down extended to 21.40 and bounced back up to Friday's 21.65 "higher prior lows." Closing lower again Wednesday would confirm 20.20 is in-play.

30-year Treasury
Sep Contract US; (TLT)
Monday's gap down that was spent exclusively in negative territory could not prevent a new low Tuesday targeting 137-30 or 137-18. But it made a new low likely to recover into positive territory. Tuesday's pre-open dip to 137-25 reacted back up 2 points through Monday's 138-27 close to 139-22. This is another opportunity to begin bottoming, but Tuesday's 138-05 opening gap will need to be retested, and held.

Crude Oil
Jul Contract CL; (USO)
Monday's pullback extended down Tuesday well under the 95.65 pullback limit to test 94.30 support. The reaction up from there was held back at 95.00 until a late surge through it. Extending back above 95.65 would resume the rally, next targeting 98.10.

Natural Gas
Jul Contract NG; (UNG), (UNL)
Tuesday's fresh low did what Friday could not, producing a second consecutive lower close. This all but requires testing at least 3.55-3.60 before any bottoming potential.
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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