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))
The potential Euro bottom I have been pointing was in jeopardy when Italy’s vote triggered a plunge back through prior lows down to 1.0510. But already recovering at the open had isolated the overnight drop. And gapping up then extended to fresh highs testing 1.0802. The wide outside day does help to suggest a bottom is forming, but it can also expend all near-term available buying pressure and need a corrective dip.
Gold Feb Contract (GC, ETF: (GLD))
Sunday night’s reaction to Italy’s referendum triggered gap up and extension to test the range’s 1190.00 highs before reversing to probe under 1166.00 again down to 1158.60. The pattern remained bullish so long as 1166.00 was recovered through the close, and in fact the gap back up to Friday’s 1177.00 close was tested Monday afternoon. Extending any higher now requires pullbacks to hold 1172.50.
Silver Mar Contract (SI, ETF: (SLV))
Gapping up and testing 17.05 overnight on Italy’s vote was reversed down sharply to 16.55 Monday morning. But recovering into the close reached new intraday highs testing 16.95, just 10 cents under the overnight low, still suggesting a new upleg is underway.
30-year Treasury Mar Contract (US, ETF: (TLT))
An overnight surge to 151-19 on Italy’s vote was reversed to greet Monday’s open back down at 149-22. Extending to 149-11 bounced to test 150-25 — again — bordering on overkill for retesting resistance instead of already exploiting that it has held multiple tests.. Back above 151-22 could suggest the downside is already done.
Crude Oil Jan Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Sunday night’s strength and Monday’s modest gap up ultimately ranged sideways at or above Thursday’s prior high, attacking the 52.75 target to within 30 cents. The trend remains up so long as 50.50 holds as support.
Natural Gas Jan Contract (NG, ETF: (UNG, UNL))
Friday’s pullback under 3.48 to 3.37 was recovered to fresh highs Sunday night, which extended back up to and though Thursday night’s 3.57 high to 3.65. The action is very impressive, but cannot afford to hesitate extending higher as it is testing natural resistance back to October’s high gap at 3.67.
Mid-day Update… Holding up, and out.
Is slow drift delaying the rally?
This morning’s 2207.75 renewed bias-up target held its test and retest, reacting down through the noon hour to 2201.50. Now a no-bias environment is fluctuating narrowly at the pullback’s lows.
Exiting the bias environment without already trending would be equally capable of resuming the rally, and of extending the pullback back into Friday’s range.
The latter would likely be only that, a pullback, since price action off this morning’s high has not been distributive. As for the former, probing above 2205.00-2206.50 would be likely to resume the rally, targeting a probe above last week’s highs.
Despite today’s (overnight) surge, no pullback is yet likely to reverse the trend down. Whether today or tomorrow, the rally is likely to resume. Only closing under 2187.50 would start to suggest differently.
Look ahead: Economic Calendar – for Tue Dec 6, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Tuesday’s calendar has nothing with nay track record of influencing price action. That might be enough for its highest-profile item — Factory Orders — to get a reaction to even the slightest surprise..
International Trade
8:30 AM ET
Productivity and Costs
8:30 AM ET
Redbook
8:55 AM ET
Factory Orders
10:00 AM ET
4-Week Bill Auction
11:30 AM ET
52-Week Bill Auction
11:30 AM ET
Gallup US ECI
2:00 PM ET
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2209.75 | 2208.50 |
| …would target | 2214.75 | 2213.50 |
| Bias-down: under | 2204.00 | 2199.75 |
| …would target | 2194.00 | 2192.75 |
| 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.
Post-open Review… Trying to stay ahead of itself.
Surge resumes in time to confirm.
Gapping up to 2201.50 immediately touched the 2200.75 bias-up target. Exceeding it at 10:15 renewed the bias-up signal next targeting 2207.75. Actually, 2207.75 was already tested at 10:15 — twice, as high as 2208.75, but only overlapped. This is not a doubly-renewed bias-up environment.
Nevertheless, this being a bias-up environment, the window can range back down to its 2195.00 bias-up signal as support. A simple corrective dip would target 2202.50, with room for noise down to the original 2200.75 bias-up target. Last Wednesday’s 2210.25 anchor all but requires a retest. Its test should be the reward for returning to within its proximity after probing fresh lows, after finishing this morning’s pullback.
Any deeper of a pullback would tart to suggest today’s upside is done. Recall the premature surge ahead of Europe’s opens that I mentioned earlier? Well, it is now joined by the pre-open reaction down barely attacking Friday’s 2197.25 high to within 3 ticks, and to within 2 points post-open.
The impatient buying doesn’t prevent the upside momentum from expanding, but it makes that less reliable. And more so, it is undermining the upside durability.