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))
Restrained optimism had kept Wednesday’s gap up from extending, and from being too aggressive at this early stage of a bottom. Thursday’s shallow dip a little deeper back into Monday’s range now allows a rally attempt to be credible for extending higher intraday.
Gold Dec Contract (GC, ETF: (GLD))
The recent probe back above 1266.00 was barely held as Thursday’s ranging hovered narrowly above it.
Silver Dec Contract (SI, ETF: (SLV))
Barely gapping up Thursday was unable to extend anywhere near the 17.80 resistance before settling in to fluctuate tightly around unchanged for the day.
30-year Treasury Dec Contract (US, ETF: (TLT))
Chipping away at 163-27 and 164-08 support finally had greater influence than the potential bounce targeting 165-30 and 166-19. Thursday’s open gapped down to slightly pierce prior lows by 2 ticks at 163-04 and then trend down sharply to 161-22.This leg should touch 160-26 so long as 163-02 holds bounces..
Crude Oil Dec Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Thursday firmed back to attack Wednesday’s 50.10 high but remained within Wednesday’s range. Consolidating narrowly, an “inside day” in this case, doesn’t reject the prevailing weakness when developing at the lows.
Natural Gas Dec Contract (NG, ETF: (UNG, UNL))
Wednesday’s dramatic extension of the decline wasn’t so much corrected Thursday, as the decline slowed. The intraday bounce stopped short of testing the 3.12 recovery signal. No lower close is required of the confirmed breakout, but another probe of lows under 3.00 is likely.
Mid-day Update…Back into the mud.
Morning slide bounces, to a degree.
The first hour’s slide to 2126.75 held the 2129.75 bias-down target when it mattered, and avoided renewing the bias-down signal. The balance of the morning’s no-bias environment was supported appropriately by 2129.75.
The 2132.50 bounce target was fulfilled just as the bias environment began lapsing. Bounce potential to 2135.75 was fulfilled during the noon hour. Its resistance held.2135.75 is also this afternoon’s bias-up signal. It did not trigger, and this is another no-bias environment. But there is no requirement during the afternoon for this setup to produce an offsetting test of the other bias signal.
This pattern off the lows tends to produce another surge, similar to the noon hour’s entry. Actually trending up to fresh highs — or down, for that matter — is difficult with two high-profile post-close earnings items coming from AMZN and GOOGL.Resolving up would help very much to reduce the ongoing vulnerability of a fresh session low triggering a much greater downleg.
Look ahead: Economic Calendar – for Fri Oct 28, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: GDP is high-profile, but it has little influence on price action. Not reliably. If it does on Friday, then the morning’s other econ reports would likely duplicate the reaction.
AMZN, GOOGL earnings
THU post-close
GDP
8:30 AM ET
Employment Cost Index
8:30 AM ET
*Consumer Sentiment
10:00 AM ET
Baker-Hughes Rig Count
1:00 PM ET
Afternoon Bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2141.75 | 2135.75 |
| …would target | 2147.25 | 2141.50 |
| Bias-down: under | 2134.00 | 2128.25 |
| …would target | 2128.50 | 2122.50 |
| 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.
Post-open Review… Big, Bigger, Biggest (yet).
Increasingly larger pre-open legs overshadowed by post-open plunge.
The last overnight upleg had retraced the prior 9-point rally, and extended 5 points higher to attack 2144.00. The 2142.00 open slid sharply back down to 2135.00. And that was just the opening 15 minutes of volatility.
Not immediately, but soon the drop had resumed and extended down to 2126.75, 17 points under the pre-open high. All well within the first hour.
The 2143.00 bias-up target was tested pre-open, by (barely) more than 15 minutes, so we can’t assume its test was rejected. Otherwise, having also rejected a test of the 2138.00 bias-up signal, offsetting tests of BOTH bias-down parameters would be in-play, including the 2122.50 bias-down target. Instead no-bias triggered. The 2129.75 bias-down signal’s test is already fulfilled.
In fact, the bias-down signal was probed after 10:15. Maintaining its break through 10:30 would have invalidated the no-bias signal. But it was overlapped in time to maintain the no-bias signal. Probing under it would be “no-bias trending” that requires recovery.
Until the no-bias environment begins lapsing, a bounce to 2132.50 and 2135.75 is possible. But not required. Back under 2127.75 first would target 2124.50 and possibly the 2122.50 bias-down target. Regardless of an interim bounce, delaying a break lower for long enough would be free to trend down even deeper.