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))
Tuesday’s slightly lower low came within 10 pips of the outstanding 1.0865. target. Then it recovered back above Monday’s prior high, forming an outside day that rejected a probe under prior lows. If not exploited too quickly by impatient buyers — e.g. gapping up — then a durable bottom may be allowed to form.
Gold Dec Contract (GC, ETF: (GLD))
Probing back under the 1266.00 buy signal twice Monday was recovered again by Tuesday’s gap up. Last week’s 1276.00 high of the original probe was attacked intraday, and then probed after the close to suggest the 1283.50 bounce target is in-play.
Silver Dec Contract (SI, ETF: (SLV))
Tuesday’s retest of Monday’s high also retested the 17.80 buy signal that closing above would trigger a rally, whether temporary or durable. Once again failing to trigger it by Wednesday’s open would make an attack on recent lows likelier.
30-year Treasury Dec Contract (US, ETF: (TLT))
Dipping overnight under the 163-27 support to the bottoming pattern trying to form was recovered pre-open to also probe back above the 164-08 pullback limit and test 165-02 — all of which keeps alive the bounce’s attraction to 165-30 and 166-19.
Crude Oil Dec Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Tuesday’s inside day wasn’t itself predictive, but it didn’t attract sponsorship to reject Monday’s probe of the current range’s lows, which itself makes a break lower likelier.
Natural Gas Dec Contract (NG, ETF: (UNG, UNL))
Rolling forward to from Nov to Dec is not directly comparable, with price differences ranging from 20 33 cents at various relevant price points. But last week’s two-day range is more defined, so its breakout Friday that was confirmed on Monday makes at least a third lower close likelier. And Tuesday’s lower close can satisfy the requirement.
Mid-day Update… Looking for a low, if it takes all day.
Testing the next lower support.
When yesterday’s dip to last week’s “lower prior highs” at 2140.50 was recovered above yesterday’s opening high — despite being done overnight — there became no bullish reason to revisit last week’s lower prior highs. The resolution would be to probe lower.
Today’s retest of 2140.50 could have escaped this consequence if its test were isolated to the open. But it wasn’t. Now 2135.50 is being tested. That’s the next “lower prior high,” and the next opportunity to launch a rally leg.
Holding the open’s test of its bias-down signal did put into play an offsetting test of its 2148.00 bias-up signal. Exiting the bias environment under the bias-down target would have invalidated the objective. Instead, it becomes “unfinished business above” that requires an eventual retest.
Probing under this morning’s 2141.25 bias-down signal before the bias environment begins lapsing is called “no-bias trending.” It requires being retraced at least to the bias-up signal, and often also visits the 10:15 print, which was 2144.00.
Opportunity to rally from lower prior highs. And unfinished business above, two of them. That’s a lot of bullish potential. And it could be realized today.
Meanwhile, isolating the test of 2150.00 to overnight price action has created significant downside vulnerabilities. Exiting the noon hour in decline or triggering this afternoon’s 2137.50 bias-down signal could point down into late-afternoon.
Look ahead: Economic Calendar – for Wed Oct 26, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Earnings due from AAPL may inhibit volatility and trending attempts before Tuesday’s close. Wednesday morning’s econ reports are more high-profile than reliable for influencing price action. Although this week’s deluge of Housing sector data are vulnerable to surprising contradictions.
Apple earnings (AAPL)
TUE post-close
MBA Mortgage Applications
7:00 AM ET
International Trade in Goods
8:30 AM ET
PMI Services Flash
9:45 AM ET
New Home Sales
10:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
2-Yr FRN Note Auction
11:30 AM ET
5-Yr Note Auction
1:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2149.00 | 2143.00 |
| …would target | 2154.00 | 2148.00 |
| Bias-down: under | 2143.50 | 2137.50 |
| …would target | 2137.50 | 2131.50 |
| Signal status: NO-BIAS, TESTED BIAS-DOWN 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… Vidi, veni, evacuate.
Pre-open drop fails to hold its probe under prior lows.
Sellers threw a lot of stuff at the open. They haven’t been rejected, but they failed to complete a bearish setup.
Testing the rally’s 2150.00 objective overnight had reacted down to 2144.00 and 2142.25. 
The open only deteriorated further by extending down to probe 2 ticks under yesterday’s 2140.50 low.
That also included a test of yesterday’s 2143.25 bias environment low. Having trended up into yesterday’s cash session close, maintaining an open under 2143.25 could form a “session-long decline.” Also breaking under yesterday’s session low would be extra confirmation.
This was all the open’s sellers could bring. Probing under both prior lows was recovered at 9:45 back up to 2144.00, and then up to 2145.75. No-bias was triggered, having avoided a break under the 2141.25 bias-down signal. Having actually tested the bias-down signal before not triggering it, an offsetting test of the 2148.00 bias-up signal is in-play.
That didn’t prevent a drop back to within 1 tick of 2141.25, just before 10:30. Any lower any later would have invalidated the no-bias signal. That was avoided, and back above 2143.75 should launch the next recovery leg. But be careful under 2141.25 (being tested now) in case a deeper detour is underway.