The yield on the 10-Year Treasury holds daily support. Gold tested monthly resistance on Monday then closes below Friday’s low. Crude oil still influenced by annual pivot at $77.05. The euro tests quarterly resistance on Monday then closes below Friday’s low. The Dow rally tested the 50-day simple moving average. Mortgage modification program not working and gives false reading on mortgage delinquencies.
US Treasury Yields – Monday’s support at 3.313 held and today’s support is 3.331 as $40 billion 2-Year notes are auctioned with monthly support at 0.797. The daily chart for the 10-Year shows the longer-term trading range between the 200-day simple moving average at 3.544 and 3.061 with annual resistances at the floor at 2.999 and 2.813. The US Treasury auctions $38 billion 5-Year notes on Wednesday as the FOMC statement looms, and $30 billion 7-Year notes are auctioned on Thursday.
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Chart Courtesy of Thomson / Reuters
Comex Gold – The daily chart shows rising MOJO, but Monday’s all time high of $1266.5 a failed test of my monthly resistance at $1265.9. The close was below Friday’s low which defines a “key reversal” day. Today’s pivot is $1238.8. The 21-day and 50-day simple moving averages provide key supports at $1223.0 and $1197.9.
Courtesy of Thomson / Reuters
Nymex Crude Oil – The daily chart still shows overbought MOJO with oil above its 50-day and 200-day simple moving averages and annual pivot at $77.34, $76.95 and $77.05 with today’s resistance at $78.55. The 21-day is lower support at $73.75.
Courtesy of Thomson / Reuters
The Euro – The daily chart shows rising MOJO as strength reached my quarterly resistance at 1.2450. Monday’s close was below Friday’s low resulting in a “key reversal” day. The 21-day simple moving average is support at 1.2213.
Courtesy of Thomson / Reuters
Daily Dow: The Dow is overbought on its daily chart and the 50-day simple moving average has been tested at 10,585. The 200-day simple moving average and my annual pivot are supports at 10,341 and 10,379. I do not expect this short-term rebound to get back to or above the April 26th high at 11,258. It remains “Dow 8,500 before Dow 11,500”.
Courtesy of Thomson / Reuters
Help for Homeowners is just not working - There have been 1.24 million homeowners who enrolled in the $75 billion mortgage modification program, and more than a third of them have dropped out. In May 150,000 mortgage holders bailed out of the program for a total of 436,000 who have exited since the program began in March 2009.
A snafu is paperwork. When banks looked at financial information, many were disqualified. Many applicants decided not to fill out the paperwork deluge, or claimed that the bank lost their documents, while banks claim that borrowers were not sending in completed documents. The failure of this program has had many homes in mortgage-limbo that have delayed foreclosures and is a reason I forecast lower home prices and another wave of foreclosures in the second half of 2010. This will cause a double-dip in housing, additional bad loans at banks, which will keep unemployment high and cause the real economy to double-dip.
The latest graph courtesy of the Federal Housing Finance Agency (FHFA) reflects the pause and slight dip in Seriously Delinquencies in mortgage loans.
Disclosure: No positions
