Posts by Rod David
Pre-close View… Took long enough.
Bias environment exits into a rally.
All of those ongoing overnight and morning highs stopping short of each other — with a couple of shallow afternoon bounces, too — 
were building the bullishness from a contrarian perspective. Their retest wasn’t required, and a retest wasn’t required within a specific time frame. But sellers weren’t gaining traction.
This morning’s gap up wasn’t necessarily maintained without dipping to test yesterday afternoon’s low. That only opened a template that would delay the rally until the final 60-90 minutes.
In fact, fresh highs as the afternoon’s no-bias environment came within view of lapsing (actually starting just 2-3 minutes early) have extended up to 2177.25. Thursday’s post-open high had stopped pessimistically short of touching Wednesday night’s 2180.50 high. And now its retest is slightly likelier than not to also visit 2185.00-2186.00.
Meanwhile, the rally has gained traction. This afternoon’s bias environment began lapsing above the noon hour’s high, and the final hour was entered higher. If not rewarded by extending higher through the close, then trending up tomorrow morning would be likely. Otherwise, back under 2173.50 would start to signal at least a pullback underway targeting 2169.50-2170.50.
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))
Ranging narrowly Tuesday did not affect the pattern’s 1.0655 target that remains in-play so long as bounces hold 1.0835.
Gold Dec Contract (GC, ETF: (GLD))
The bounce off of Monday’s 1211.00 low didn’t much extend Tuesday, and more fluctuated in slightly positive territory, keeping alive the 1206.00 and 1196.50 targets.
Silver Dec Contract (SI, ETF: (SLV))
Bouncing Tuesday held 17.10 resistance to maintain the likelihood of retesting Monday’s 16.62 low.
30-year Treasury Dec Contract (US, ETF: (TLT))
Tuesday’s range was relatively narrow compared to Monday, which undermines the credibility of any recovery attempt before Friday. And possibly also Monday, while a bigger bottom can start forming and should revisit at least 153-07.
Crude Oil Dec Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Gapping up more than $1 to 44.55 Tuesday extended another $1 intraday. Now holding 44.15-44.30 would allow the rally to extend, potentially targeting 48.25.
Natural Gas Dec Contract (NG, ETF: (UNG, UNL))
Gapping up to test 2.80 could have extended higher Monday, but Tuesday’s attempt wasn’t likely to extend. But its intraday reaction down should still extend to fill the gap back to Friday’s 2.62 close, and possibly also probe the 2.55 low.
Mid-day Update… The brass ring.
Another pass at breaking resistance passes.
The overnight rally touched 2169.75, then reacted down to 2161.50. Recovering through the open touched 2169.25, and this morning’s ultimate high was another tick higher. Interim reactions down tested and retested 2165.00.
This is a no-bias environment. Fresh highs may be probed, but this afternoon’s 2169.00 bias-up signal should otherwise define the bias environment range’s upper-end. A more substantial rally would be credible after the bias environment begins lapsing at 2:30.
Back under 2164.50 would still be credible for probing back into yesterday’s range. And that would still be vulnerable to becoming a new downleg.
Look ahead: Economic Calendar – for Wed Nov 16, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday’s two Fed speakers are scheduled before and after regular trading hours, limiting their impact on intraday action. The pre-open PPI data will be watched for its inflationary signs. Any obvious price reaction — which is likely — can be duplicated by the morning’s other econ reports.
MBA Mortgage Applications
7:00 AM ET
Neel Kashkari Speaks
7:30 AM ET
*PPI-FD
8:30 AM ET
Industrial Production
9:15 AM ET
Atlanta Fed Business Inflation Expectations
10:00 AM ET
Housing Market Index
10:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
Treasury International Capital
4:00 PM ET
Patrick Harker Speaks
5:30 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2172.25 | 2169.00 |
| …would target | 2178.50 | 2175.50 |
| Bias-down: under | 2166.75 | 2163.75 |
| …would target | 2161.50 | 2158.25 |
| Signal status: NO-BIAS, TESTED 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.