Long Bond's Target Met in Big Sell-Off With Stocks

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.

Today's Highlight: It is certainly interesting that the long bond fell out in tandem with stocks Thursday. Usually, it serves as a destination in a "flight to quality." But the long bond had a target in play, and now it has been met.

Dollar Basket
Sep Contract DX; (UUP), (UDN)
One of the two gaps outstanding below was filled when Thursday's attempt to resume the rally was rejected decisively. The lower gap need not be filled before rallying more substantially, but no new signal is yet available from this pattern.

[More from Minyanville.com: What the US Dollar Equities Correlation Is Telling Us ]

Eurodollar
Sep Contract EC; (FXE)
The congestion that was formed by Wednesday's inside day did cause a bounce to fail. The bounce was a little shallower and a little shorter lived than was expected, reversing down into Thursday morning from barely probing 1.3333 overnight. The premature failure proved to be lacking sponsorship when its fresh low was reversed up sharply intraday well above 1.3333. A sell signal has been averted for now, but more topping is still likely.

[More from Minyanville.com: Gold's Big Rally Monday Helps to Entrench Its Recovery ]

Gold
Oct Contract GC; (GLD)
Fresh highs overnight up to 1346.00 were retraced back down to Tuesday's 1319.00 lows. Breaking under it would have signaled a top had formed. Instead its test launched a surge to fresh highs testing 1369.00. The rally's 1375.00 target remains in play so long as pullbacks now hold 1352.00.

[More from Minyanville.com: In Floats the Stock Market's Hindenburg Omen...Again ]

Silver
Sep Contract SI; (SLV)
The rally extended sharply higher to test 23.20. Pullbacks now have room all the way back down to 22.15 whose break would signal momentum reversing down. But the rally has room for extending further only to 23.50.

30-year Treasury
Sep Contract US; (TLT)
Having absorbed Tuesday's shock to the system by ranging narrowly Wednesday, the drop resumed Thursday and quickly fulfilled the long outstanding 131-06 objective. There is no new signal.

Crude Oil
Sep Contract CL; (USO)
The firming continued Wednesday night amid ongoing rioting in Egypt, attacking 108.00. The 110.65 target remains intact so long as pullbacks now hold 106.50 as support.

Natural Gas
Sep Contract NG; (UNG), (UNL)
Thursday's EIA report didn't interfere with the firming already underway that has now extended back above 3.36 to signal a new rally leg underway. Its initial objective at 3.57 and then to 3.70 remain intact so long as pullbacks now hold 3.34 as support.
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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