CHARTING MONEY: CBOT Treasurys Vulnerable To A Dip
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12:00 ET
=DJ CHARTING MONEY: CBOT Treasurys Vulnerable To A Dip
19 Dec 12:00
By Stephen Cox, CMT
A Dow Jones Newswires Column
NEW YORK (Dow Jones)--Interest-rate futures may be ready to dip because CBOT
Treasurys are testing important resistance. A dip in T-note futures may do
little for the stock market, however, which showed its bearish character when a
promising early-morning rally fell apart.
The CBOT March 10-year T-note practically tested 113-16 target resistance
Thursday morning, and the selloff that followed was a routine development. The
contract is now liable to dip at least to moving average support at 112-16, and
a test of 112-04 support is probable.
But the intraday high so far, 113-14, is a new high for the uptrend since
Dec. 2, and the March T-note is bullish on the long-term charts as long as
111-16 support holds. The initial signal of a renewed uptrend will be a
decisive move above monthly resistance of 114-21.
The IMM March eurodollar is stalled at 98.63 resistance. A dip to 98.58 is
very likely now. Nonetheless, the contract has, on a daily settlement basis,
broken out of month-old consolidation trading on the continuation chart. Moving
average support and rising technical momentum suggest that a test of 98.75
isn't far off.
Hot Stock Rally Ices Up (Or Cools Down)
As of this writing, the Thursday morning stock market rally had turned sour
as the indexes slip lower on the day. The Dow Jones Industrial Average didn't
make it to 8580.82 daily breakout resistance. The NYSE Composite practically
tested 479.99 breakout resistance and then turned down. Those two indexes are
notable confirmations of the market's ongoing bearish character.
The DJIA is edging down to bounce-point support at 8386.25, and a test of
that support may touch off a rally to 8580.82. But the average is vulnerable to
a test of the lower 7800.00 handle by next month.
The Nasdaq Composite will be set up for a bounce when it tests 1335.09 target
support. Ultimately the Nasdaq is going for 1278.35. The daily chart allows for
a test of 1278.35 late this month, although a January test is becoming more and
more likely.
If I Had A Grain Of Gold For Every Etc. ...
Now that the Comex leading February gold contract has probed the $350.00
handle, I imagine that everyone who is anyone in the gold-futures market is
talking about that bullish triangle formation on the weekly continuation chart
that signaled the bull move a week ago.
The triangle was completed when the contract moved above $330.00 resistance.
The pattern points to $365.10, which will probably be tested before the end of
April. A dip to $339.50 will no doubt occur first.
And I imagine that all this talk of the triangle is more often than not
followed by another comment, on pattern recognition and technical analysis in
general. I've heard variations of this comment a lot. In this case it would go
something like this:
"That bullish triangle was a self-fulfilling prophecy. If the technicians see
a triangle then the technicians buy. The market goes up. QED."
The phrase "self-fulfilling prophecy" is obligatory.
The first subscriber who e-mails me with the inherent fallacy in the above
statement before the market closes on Friday will personally receive my sincere
best wishes for the holidays and for the New Year.
And it will be sincere, because I'll be away from the markets for the
following two weeks. Now, that's a self-fulfilling prophecy.
To try the Charting Markets weekly technical newsletter go to
djnewswires.com
For more technical analysis see: Dow Jones Newswires, N/DJTA; Telerate, page
4073; Bloomberg, NI DJTA; and Reuters key word search "Charting Markets."
-By Stephen Cox, Dow Jones Newswires; 201-938-2064; stephen.cox@dowjones.com
(Stephen Cox, a chartered market technician, is chief technician for Dow
Jones Newswires.)
(Data by CSI, Commodity Research Bureau)
(END) Dow Jones Newswires
12-19-02 1200ET |
