Weekend Update - #2

30 YR BONDS
The bond market sold down after a failed test of the 200 sma, with Monday being the big down day.

Bigger picture structure remains unclear. I show a potential intermediate (X) wave in place at the 123-25 H.

Price has reached the lower boundary of the channel. A bounce of some type should not be unexpected.

Key levels to watch for the upcoming week are the 123-25 H and the 117-18 L. Should that 117-18 L give way, I suspect that the 114-26 L will be reached in short order.

The retracement levels from the corrective off the 111-24 L are on the chart.

All prices basis combined contract.

DOLLAR INDEX
The worlds largest supply of toilet paper saw decent downside price action this past week.

I interpret structure to be in minuette (v) of minute [v] of minor 5 of intermediate (C) of primary [B]. A lot of ending 5's are very near folks.

Notice how the 50 sma has held price in check since July.

Noteworthy as well, look at the RSI action since it registered its low in early June. It has consistently been turned back down from the 50% level. In fact, this has happened 6 different times.

There is big positive divergence, forewarning that a change of trend may soon be at hand.

The DSI readings continue to point to a one way trade here. As has been mentioned in these posts numerous times, this can not go on indefinitely.

5 = 61.8% of 1 - 3 at 74.79. This is the minimum downside objective that would be expected to be reached.

Bottom line - This trend is very mature at this point in time. Be aware that it could end at anytime. As always, an impulse off a low with a channel break will give confirming evidence.

Price basis combined contract.

Crude
Hard upside price action in the crude pits this past week.

It is unclear whether crude broke free from a minor B wave triangle or not, as I show on the chart.

Price action certainly resembles a "thrust" that would be expected.

If a triangle, it measures to 84.33.

There is also the possibility that this is part of a combination corrective, and perhaps a combo that is not finished. That has yet to be determined.

Bottom line - price action does not appear finished in this move higher, however, it should be close to needing a retracement.

I am anticipating any retrace to be shallow and short lived.

I am a little bummed out that this didn't setup properly, which would have allowed me to put together a decent long line via calls :( This however, is how the market operates.

Price basis continuous contract.

GOLD
The gold market set another new all-time high this past week, printing 1072.

My interpretation of structure has this market in minuette (iv) of minute [v] of minor C of intermediate (C). The alternate view is a very bullish minor 3 of intermediate (3).

As pointed out in Thursday's post, it is unclear which peak (iii) finished at, 1062.50 or 1072.

Once (iv) completes, we should see another leg higher that would complete [v], and thus C.

If this assessment is correct, then the bulk of gains have already occurred. Of course, there is always the possibility that (v) could extend.

Bottom line - we should see another push higher before a meaningful correction.

Price basis December contract.