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 already Wednesday from Tuesday’s bottoming pattern was a little too too soon for such aggression to be reliable for extending higher. Its reaction down back into Tuesday’s range now allows another rally effort to be credible.
Gold Dec Contract (GC, ETF: (GLD))
Extending higher after Tuesday’s close was retraced before Wednesday’s open, undermining the corrective bounce’s potential up to 1283.50. Closing back under 1266.00 would resume the potential for testing at least 125, if not also 1236.00.
Silver Dec Contract (SI, ETF: (SLV))
Never actually probing above the 17.80 buy signal, let alone closing above it, has kept alive the attraction to retesting or attacking recent lows.
30-year Treasury Dec Contract (US, ETF: (TLT))
Wednesday’s open gapped back down to test 163-27 and 164-08 that must hold to maintain the bottoming pattern trying to form, and potential for bouncing to 165-30 and 166-19.
Crude Oil Dec Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Gapping up Wednesday to reflect Tuesday’s post-close surge was soon rejected by a reversal down from above 50.00 to back under 49.00. That barely filled the gap back down to Tuesday’s close, but the decline has little excuse not to extend without delay.
Natural Gas Dec Contract (NG, ETF: (UNG, UNL))
Wednesday gapped down again after Tuesday had already fulfilled the third lower close requirement. The session nevertheless extended down sharply to 2.97, levels not seen since June. The drop now has room down to 2.86 before launching any reliable corrective bounce.
Mid-day Update… Ready to rock, or roll over.
Pullback holding support.
This morning’s late rally above 2127.75 was resisted initially at the 2133.50 bias-down signal. Being resistance during a bias-down environment didn’t prevent probing above it to 2140.00. But probing above the bias-down signal during a bias-down environment required at least retesting 2133.50 as support.
2140.00 happens to be natural resistance. It is a 61.8% retracement back up to yesterday’s pre-open 2150.00 test. Overbought RSIs that formed at 2140.00 require its eventual retest. That’s possible at any time since its reaction down just fulfilled the minimum downside objective by testing 2133.50.
Trying to retest this morning’s high would get every benefit of the doubt for trying to resume the rally. There is resistance above at 2145.75, unfinished business at 2148.00, and then a likelihood of probing yesterday’s 2150.00 pre-open high.
Until rallying, there is currently potential for extending the noon hour’s pullback through 2133.50. This morning’s 10:15 print at 2127.75 could be tested, regardless of the resolution.
Look ahead: Economic Calendar – for Thu Oct 27, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Thursday’s pre-open Durable Goods report is reliably influential to price action. And any reaction is likely to be duplicated by the session’s other econ reports.
*Durable Goods Orders
8:30 AM ET
Jobless Claims
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
Pending Home Sales Index
10:00 AM ET
EIA Natural Gas Report
10:30 AM ET
Kansas City Fed Manufacturing Index
11:00 AM ET
7-Yr Note Auction
1:00 PM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET
Afternoon Bias
| WED afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2147.75 | 2141.50 |
| …would target | 2153.50 | 2147.50 |
| Bias-down: under | 2138.50 | 2132.50 |
| …would target | 2134.00 | 2127.75 |
| 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… Are they through, yet?
Gap down ultimately holds, eventually reacts.
Opening at the 2127.75 bias-down target and testing the 2126.25 overnight low was recovered up to 2130.50 on news. Its reaction down to a fresh low was recovered enough to hold 2127.75, and to avoid renewing the bias-down signal.
Not renewing the bias-down signal is the only bullish element of this morning’s open. And that’s not a very bullish element.
Ranging narrowed around 2127.75 into 10:30. Surging AFTER that has tested the 2133.50 bias-down signal by 1 point. It’s too late to trigger, to invoke the grace period, or even to invalidate the bias-down. When tested, the bias-down signal should define the range’s upper-end until the bias environment is at least within 10-15 minutes of lapsing at 11:30.
Currently, the 2133.50 test is holding. Probing above it could suffer the additional consequence retesting the 2129.00 10:15 print. The decline can resume anytime and be credible. A credible recovery should wait until coming within view of the bias environment lapsing.