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Today's Big Bond Drop Cleans Out Many Sellers

Rod David

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 had indeed ended a corrective bounce Thursday, plunging to new relative lows at Friday's open, and extending lower. The intraday lows held a test of the decline's target, so the decline must close lower Monday to avoid bottoming.

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Dollar Basket
Jun Contract DX; (UUP), (UDN)
Fulfilling the bounce's 82.80 target did not slow the rally, which gapped up Friday and extended higher to test 83.50. Now the rally's momentum remains intact so long as 82.70 were to hold as support.

Jun Contract EC; (FXE)
Thursday's plunge to 1.3015 extended down Friday to test 1.2940. The decline next targets 1.2865 so long as 1.3105 is not recovered.

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Apr Contract GC; (GLD)
As suspected, the break under 1463.50 to resume the decline targeting 1429.50 would likely happen overnight, and slice through interim support. Thursday night's $40 plunge was testing 1429.50 at Friday's open, before extending to 1418.50 intraday. A surge recovered to close back above 1429.50. Friday's lows can still be retested down to 1400.00, a test that would probably hold, unless Monday were to close back above 1452.00.

May Contract SI; (SLV)
Gapping down to 23.25 and consolidating down to 23.15 never extended lower to the 22.95 pullback target. An afternoon surge recovered to Wednesday's higher prior lows at 23.65. Only gapping up above 24.00 could signal that fresh lows aren't still in-play.

30-year Treasury
Jun Contract US; (TLT)
Friday's plunge compensated for the delay from Thursday's test of the 147-02 bounce limit up to 147-12. Friday's open gapped down under all prior lows before extending down sharply to 144-17. The 144-28 target was recovered through the close. A bounce should hold a test of 145-20 if the decline intends to extend to 143-00.

Crude Oil
Apr Contract CL; (USO)
Thursday's gap down under 96.00 had undermined the rally. Friday's open gapped down to 94.75 and extended lower to 93.37. An afternoon rally attacked 96.00 to within $.50, which is not a buy signal, but does keep alive the rally's potential.

Natural Gas
Apr Contract NG; (UNG), (UNL)
Friday's dip back down to 3.91 rejected Thursday's bounce back up to 4.00, but 4.05 still must be recovered before signaling that momentum is 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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