U.S. TREASURY BONDS AND NOTES
September U.S. T-Bonds: Prices slipped to another fresh four-week low overnight. Shorter-term moving averages (4- 9- 18-day) are still fully bearish. The 4-day moving average is below the 9-day average and the 18-day. The 9-day is now below the 18-day. Slow stochastics still show the market being short-term oversold and due for a corrective bounce very soon. Shorter-term resistance lies at 106 15/32–Thursday’s high–and then at 106 25/32–this week’s high. Buy stops likely lie just above those levels. Shorter-term technical support lies at the overnight low of 105 25/32 and then at 105 16/32. Sell stops likely reside just below those levels.
September U.S. T-Notes: Prices are steady in early morning dealings. Slow stochastics still show the market as being well oversold and due for a rebound very soon. Buy stops likely reside just above shorter-term resistance at 104.16.0, and then just above resistance at Thursday’s high of 104.21.5. Shorter-term moving averages are still fully bearish. The 4-day moving average is below the 9-day and 18-day average. The 9-day is below the 18-day moving average. Heavier sell stop orders are likely located just below solid support at 104.00.0.
The September U.S. dollar index is solidly higher in early morning electronic dealings, and near the session high, and the currencies are solidly lower. The DX this morning has seen a bullish upside “breakout” from a congestion area on the daily bar chart. Dollar index bulls now have solid near-term technical momentum. The dollar index finds shorter-term technical resistance at 86.70. Shorter-term support is seen at 86.00. The September Euro has today seen a bearish downside “breakout” from a congestion area on the daily bar chart. The Euro today finds sell stop orders are likely located just below shorter-term technical support at 1.2550 and then heavier sell stops just below solid support at 1.2500. Shorter-term technical resistance for the Euro is seen at 1.2600 and then at the overnight high of 1.2663. Buy stops likely reside just above those shorter-term resistance levels.
The metals are trading solidly lower in early morning dealings, and near the overnight lows. The very strong greenback is pressing the metals lower today. In August gold, prices would have to push back above solid resistance at $600.00 to give the bulls fresh upside technical momentum. Key shorter-term technical support for August gold today is $570.00. Heavier sell stops likely reside just below that level, and then just below support at this week’s low of $564.30. Buy stops likely reside just above resistance at the overnight high of $588.00 and then just above shorter-term resistance at $590.00.
Prices are trading modestly lower in early electronic dealings. In August crude, look for buy stops to reside just above resistance at the overnight high of $71.17 and then at $71.50. Look for sell stops just below shorter-term support at $70.00. Same story: I look for more trading within the recent well-defined range–bound by key near-term support at this week’s low of $68.65 in August crude and solid resistance at $73.00. But a drop below the aforementioned trading range–including multiple closes below it–would then likely mean a trading range in crude oil prices between $65.00 and $70.00.
Prices were mostly lower in quiet overnight electronic trading. Near-term weather in Corn Belt is fully bearish. I don’t see a lot of downside pressure today, heading into the weekend. Trading may become more subdued ahead of next Friday’s all-important USDA updated acreage reports. Pressure today will likely come from lower “outside markets”–gold and crude oil. My bias is that the risk in the grain markets now is for a bigger upside move rather than a bigger downside move.