Posts by Rod David
Pre-close View… Another distraction.
This afternoon’s distraction is world events.
Not to minimalize the tragedy of it all, but several terrorist actions around the globe are having a similar effect this afternoon as did the president’s press conference Friday.
This afternoon’s 2261.00 bias-up signal didn’t trigger, but it was practically busting at the seams during the bias environment. It was probed up to 2262.50, and then retested as the bias environment began lapsing. No longer being required to define the range’s upper-end could have repeated the open’s surge, but that was overtaken by headlines.
Several terrorist actions around the globe have injected an unknown that wasn’t part of the market’s earlier calculus. That’s not so much bearish as it is inhibitive to rallying.But not rallying IS potentially bearish, since there is “unfinished business below” at this morning’s 2251.25 bias-down signal.
Not trending back up through 3:10-3:20 makes rallying unlikely before the close. Not probing any deeper would allow the 3:37 position-squaring window another chance to rally. Meanwhile, flat-to-lower is likely.
Daily Spot…
A daily summary of high-profile members of several complexes… View a more detailed discussion of each chart at the end of today’s Market Wrap.
Eurodollar Mar Contract (EC, ETF: (FXE, UUP))
Last week’s test of the 4.0410 lowest calculable objective doesn’t require a retest, despite Friday’s high having held a test of the decline’s initial 1.0525 target as resistance. But bottoming requires that 1.0435 not break as support, at least through any close, at least for no more than one session.
Gold Feb Contract (GC, ETF: (GLD))
Friday’s spike up through the 1135.50 buy signal was in reaction to destabilizing news instead of organic, so its 1146.00-1149.00 target wasn’t any likelier to be met. But 1135.50 held as a pullback limit through Monday’s open so the target area’s test is likely anyway.
Silver Mar Contract (SI, ETF: (SLV))
Monday’s inside day gapped down slightly and trended down slightly, which suggests that weak hands are pessimistic. That is potentially bullish from a contrarian perspective, but does not preclude one more probe of fresh lows with potential to 15.66.
30-year Treasury Mar Contract (US, ETF: (TLT))
Monday repeated the pattern of bouncing optimistically by gapping up, instead of fulfilling the requirement for at least one more new low close. The cumulative delay suggests that more than one new low close will develop to compensate for the delay.
Crude Oil Jan Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Overnight strength up to 52.50 was retraced to greet Monday in negative territory, and not retested despite returning to positive territory intraday. A second consecutive close Monday would confirm Friday’s breakout, requiring at least an eventual third higher close.
Natural Gas Jan Contract (NG, ETF: (UNG, UNL))
Dipping overnight to a fresh low at 3.33 was recovered before Monday’s open, but momentum did not reverse up, making fresh lows likely with potential down to 3.19.
Mid-day Update… More sponsorship?
Time growing short to avoid new downdraft.
Ultimately, this morning’s rally only attacked 2264.00. That’s still productive for the bullish WedEX. Negative territory was never touched, Friday’s highs were probed, and the rally was comprised of two aggressive uplegs.
It wasn’t influential enough to recover the 2260.25 bias-up signal by 10:15 to trigger it, or by 10:30 to invalidate no-bias — or to recover the 2267.25 bias-up target by 10:30. So, a test of this morning’s 2251.25 bias-down signal has become “unfinished business below.”
The WedEX influence lapsed with the morning bias environment. It is no longer influential. Triggering this afternoon’s 2261.00 bias-up signal would still be credible. Otherwise, back under 2257.50 would at least threaten the 2255.00 bias-down signal.
Look ahead: Economic Calendar – for Tue Dec 20, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Tuesday’s calendar is quiet, at least domestically and intraday. But the Bank of Japan issues its decision on interest rates overnight.
Redbook
8:55 AM ET
4-Week Bill Auction
11:30 AM ET
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2265.25 | 2261.00 |
| …would target | 2271.25 | 2267.25 |
| Bias-down: under | 2259.00 | 2255.00 |
| …would target | 2254.75 | 2250.50 |
| Signal status: NO-BIAS | FAQ | |
| INTRO VIDEOS #1 and #2 | ||
1. At 1:20, trading above the bias-up signal or under the bias-down signal would put into play a test of its bias-up or bias-down target.
2. Not triggering either bias signal at 1:20 would be “no-bias,” and the bias signals should define the bias environment’s range.
— A test of the opposite bias signal would be targeted if one bias signal was tested before triggering no-bias.
3. Touching the bias signal within 3 minutes either way of 1:20 would invoke a grace period through 1:30 to trigger a late signal.
— “Late” signals don’t require testing the opposite bias signal, but it’s still likely.
4. Still testing the bias signal at 1:30 after invoking the grace period would trigger “noN-bias,” with no bias influence.