Posts by Rod David
Mid-day Update… There have been new developments.
Overnight lows already retested.
The durability of this morning’s rally was undermined by not having isolated the overnight probe under yesterday’s lows. That essentially validated sellers. “No-bias trending” above the4 2131.25 bias-up signal had room up to its 2137.50 bias-up target. 
But even that would remain vulnerable to reversing back down to retest the 2116.00 overnight low.
Well.
I had almost completed an update reiterating those points when the FBI announcement preempted me. The news also preempted touching this afternoon’s 2135.50 bias-up signal by 1 tick. And that was still several ticks short of the potential.
The reaction down was not optimal, but it fell to 2120.00, 2114.00 and eventually 2112.50. RSIs were already diverging positively, and finally a bounce is attacking yesterday’s 2122.50 post-close low.
Not impressed.
There’s room up to 2127.00-2129.00 without even suggesting the trend is reversing up. And meanwhile back under 2118.00 would resume the decline, next targeting 2105.00 and 2095.00, even 2082.00.
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 three-day old bottoming pattern produced fresh recovery highs Friday. Near-term potential to 1.1100 would require pullbacks to hold 1.0965.
Gold Dec Contract (GC, ETF: (GLD))
Surging Friday afternoon attacked 1283.50 before the close, and then probed $2 above it afterward. This is the upper-end of room for noise around 1266.00, so almost any immediate weakness would be credible for extending down to 1252.50 and potentially 1236.00. Actually rallying would not tolerate much hesitation.
Silver Dec Contract (SI, ETF: (SLV))
Firming Friday tested 17.80 into the close, and then pierced above it momentarily afterward. Two consecutively higher closes above it would signal a rally has launched.
30-year Treasury Dec Contract (US, ETF: (TLT))
Initially retesting Thursday’s 161-22 low was unable to extend down. A bounce has room up to 163-02 before suggesting the downleg won’t extend. But having avoided a second consecutive lower close, fresh lows could more easily start forming a bottom.
Crude Oil Dec Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Fresh lows attacked 48.40, which is a 61.8% projection from the recent Double Top. Its potential for a corrective bounce must still recover 49.05 to suggest that a pullback has ended and new highs are in-play..
Natural Gas Dec Contract (NG, ETF: (UNG, UNL))
Friday’s intraday bounce all but rejected the overnight weakness, but neither was significant enough compared to Thursday’s range for any new predictive value. At least another probe under 3.00 remains likely before closing above 3.12 to signal a recovery underway..
Look ahead: Economic Calendar – for Mon Oct 31, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Chicago PMI is Friday’s only influential report. Its institutional subscribers receive it privately first. Any reaction to it tends to be duplicated when released publicly.
Personal Income and Outlays
8:30 AM ET
*Chicago PMI
9:45 AM ET
Dallas Fed Mfg Survey
10:30 AM ET
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET
Farm Prices
3:00 PM ET
Afternoon Bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2141.25 | 2135.50 |
| …would target | 2147.00 | 2141.50 |
| Bias-down: under | 2133.25 | 2127.75 |
| …would target | 2127.75 | 2122.00 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET MET | 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… Not exactly isolated.
Opening chop didn’t avoid negative territory.
Isolating the overnight probes under yesterday’s lows could have launched a massive short-squeeze. Although the open and the bias timing window probed well into negative territory, the 2125.25 bias-down signal didn’t trigger.
The 2131.25 bias-up signal didn’t trigger either. “Late no-bias” triggered by ultimately holding a test of the bias-down signal through 10:30. An offsetting test of the bias-up signal is now being fulfilled.
Not isolating the overnight probes doesn’t prevent a bounce to 2137.50 or higher. In fact, the bias-up signal is being probed, currently up to 2143.50. This might become a massive short-squeeze, but anything above the 2131.25 bias-up signal during a no-bias environment is “no-bias trending” that requires a complete retracement back down to 2131.25.
The 2126.00 10:15 print is an attraction, too. More than undermine a short-squeeze, it might be a catalyst to reverse momentum for probing overnight lows into the weekend. Volatility today remains likely, whether by trending substantially, or by reversing a significant trending attempt.