Posts by Rod David
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 Dec Contract (EC, ETF: (FXE, UUP))
Although Monday’s rally is only likely to probe higher and not necessarily required, gapping down Tuesday is not the rally’s appropriate end. Higher highs remains likely so long as the 1.0680 pullback limit holds.
Gold Feb Contract (GC, ETF: (GLD))
Tuesday’s shallow intraday weakness nonetheless finished under the 1172.50 pullback limit. A recovery has no excuse to further delay extending higher, let alone closing back above 1180.00 to launch a substantial upleg.
Silver Mar Contract (SI, ETF: (SLV))
Tuesday was essentially an inside day, hovering at Monday’s highs and above 16.70 which must hold to maintain the bullish pattern.
30-year Treasury Mar Contract (US, ETF: (TLT))
Dipping slowly Tuesday didn’t resume the decline, so much as undermine it, all but requiring a more obvious dip back to and through the lows — which remains likely so long as 151-22 isn’t recovered.
Crude Oil Jan Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Gapping down to test the 50.50 pullback limit Tuesday never recovered nor resumed the rally, but the pullback limit held. Now in addition to the next higher objective outstanding at 52.75, the gap back up to Monday’s 51.55 close is likely to be filled.
Natural Gas Jan Contract (NG, ETF: (UNG, UNL))
Probing fresh highs Tuesday up to to 3.73 was not maintained as price dipped back into Monday’s range. This a dangerous area for the rally to lose momentum, as it fills an outstanding gap back up to October’s prior highs. The next reaction down should be sudden, steep and substantial, likely to test 3.60, which must be rejected almost immediately to maintain the rally’s momentum.
Mid-day Update… Been here, rejected that.
Post-open high attacking pre-open high.
Entering the bias environment in decline was still above yesterday’s lows. And it was produced by a late reaction down, from probing fresh highs. Weak-handed sponsorship behaves like this. Like yesterday’s mid-day downtrend, all within the open’s range. No traction.
Yesterday’s dip was recovered, and now this morning’s dip has been recovered, too. The lower-end of the range has been retraced to the range’s upper-end attacking overnight highs. Only attacking, stopping pessimistically short, which can be bullish from a contrarian perspective.
Meanwhile, this is the same area that produced the last downleg. And bias-up above 2207.00 just failed to trigger. There’s no downside requirement, but the bullish scenario would hover up here and await the bias environment lapsing to renew rallying.
Drifting back down would likely test 2203.50,and any lower would start to signal a deeper, lengthier pullback underway. Still likely to recover, but after an interim dip.
Look ahead: Economic Calendar – for Wed Dec 7, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday’s post-open JOLTS report can influence price action, almost as much as the prior week’s Employment Situation report, especially in case of a surprise or by validating an extreme. The mid-morning EIA report could be influential, too, since a critical area is being tested — watch Tuesday’s post-close APA report for clues.
MBA Mortgage Applications
7:00 AM ET
Gallup U.S. Job Creation Index
8:30 AM ET
*JOLTS
10:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
Consumer Credit
3:00 PM ET
Treasury STRIPS
3:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2208.50 | 2207.00 |
| …would target | 2214.25 | 2212.75 |
| Bias-down: under | 2203.00 | 2201.50 |
| …would target | 2197.00 | 2195.50 |
| Signal status: noN-BIAS, STILL TESTING BIAS-UP SIGNAL | 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.
Post-open Review… False alarm.
Gap up fails to materialize.
Gapping up to and/or through yesterday’s highs would have launched uptrending into the afternoon. Pre-open action tried to deliver, but didn’t. Probing up to 2209.00 as retraced to greet the open back above yesterday morning’s highs.
But the open was greeted back at yesterday’s late 2206.00 high. Which could have recovered through the open to qualify. But the open only slid deeper, testing 2201.50.
Neither 2198.50/2207.75 bias signal was touched before signaling no-bias. Neither has been touched since. While there was room to dip slightly deeper without targeting lower lows, it’s not required. So, if this is the range’s lower-end, then its upper-end can now be attacked.
Exiting the bias environment when it begins lapsing at 11:30 above 2206.00 and 2207.75 would keep the door open to an afternoon rally. But delaying a rally leg much later — let alone delaying at least a recovery to the range’s upper-end — would open the other door wider to a deeper dip targeting 2195.50.