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))
Gapping up Monday only touched the original 1.0655 target as resistance before reversing back to unchanged, poied to resume the decline next targeting 1.0545.
Gold Dec Contract (GC, ETF: (GLD))
Probing the 1213.00 bounce limit through Monday’s open ultimately held as resistance, keeping alive potential for a fresh low at 1196.50.
Silver Dec Contract (SI, ETF: (SLV))
Still testing and retesting the 16.62 prior low Monday won’t launch a credible recovery without first probing deeper. By the same token, delaying a deeper dip would be “ineffectual optimism,” making an eventual deeper less likely to recover, at all.
30-year Treasury Dec Contract (US, ETF: (TLT))
Bouncing Sunday night stopped short of 154-19 whose recovery is the minimum requirement to even consider that Friday’s break lower was ultimately absorbed. Anything shallower, and probably anything any later, is likely just a temporary correction before the recent range proves it has been a continuation pattern targeting sharply lower lows.
Crude Oil Jan Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Russia joining the mix of recent OPEC headlines triggered a gap up Monday to resume the rally next targeting the 49.00 area (basis Jan, 48.25 basis Dec). It was attacked to within 50 cents intraday, so that pullbacks must now hold 46.40 (basis Jan, 45.70 basis Dec) to maintain the rally’s momentum.
Natural Gas Dec Contract (NG, ETF: (UNG, UNL))
Gapping up again on Monday needed only to be maintained for a second consecutive higher close above 2.80 to signal momentum reversing up. While that typically becomes a rally leg, two gaps left outstanding below does suggest a rally would be premature. Dipping intraday to fill one or both gaps would now be likely to recover and to reverse up.
Mid-day Update… New highs, old sponsorship.
The rally persists, but without a corrective refueling dip.
This morning’s 2185.00 bias-up signal held as support when tested during the morning’s bias environment. The plunge that tested it stopped suddenly and reversed up gradually. The earlier pattern at 2191.25 requiring a retest was then probed into the noon hour.
The room for noise above 2185.00-2186.00 up to 2192.00 wasn’t very influential as the rally extended through the noon hour. Now 2195.25 has been touched, while triggering this afternoon’s 2192.50 bias-up signal.
It’s too late to invalidate the bias-up, targeting 2199.50. But bias-up can be invalidated by exiting the bias environment back under the 2186.50 bias-down signal — so long as 2195.25 isn’t yet probed. Otherwise, a fresh high would entrench the uptrend.
Currently, a 2193.50 pullback limit is being tested, and back under 2192.50 would reverse momentum down to at least test 2188.25. None of which alone would yet invalidate the upside.
Look ahead: Economic Calendar – for Tue Nov 22, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: None of Tuesday’s econ reports has a track record for influencing price action. Redbook will be of interest if only to help establish a baseline of retail activity with so-called Black Friday only days away.
Redbook
8:55 AM ET
Existing Home Sales
10:00 AM ET
Richmond Fed Manufacturing Index
10:00 AM ET
4-Week Bill Auction
11:30 AM ET
2-Yr FRN Note Auction
11:30 AM ET
5-Yr Note Auction
1:00 PM ET
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2195.00 | 2192.50 |
| …would target | 2202.00 | 2199.50 |
| Bias-down: under | 2189.00 | 2186.50 |
| …would target | 2183.25 | 2180.75 |
| Signal status: BIAS-UP | 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… A peculiar bearishness.
Probing fresh highs, albeit only temporarily.
The 2186.50 open was under Friday’s 2187.50 opening high, so the gap was contained within the range. That didn’t prevent extending higher to within 1 tick of the 2191.50 bias-up target.
1-minute RSI was diverging negatively again when 3-minute RSI finally left being persistently overbought, and price started diving. The 2195.00 bias-up signal was touched at the dive’s low, well after 10:15 and just before 10:30. So, this is a bias-up environment.
The character of price action at the high suggests it will be retested in even the most bearish scenario. Presumably, its retest would at least touch 2192.00. That’s not necessary, and it’s even unlikely if 2195.00 is probed when the bias environment starts lapsing at 11:30.
The bearish WedEX’s influence is probably moot, unless the balance of the morning were to trend down through the overnight lows — which is unlikely, because that would be under the bias-up signal during a bias-up environment. But there remains a window for injecting a pullback before Thursday’s bullish seasonality, so I’m not expecting volatility to subside.