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))
Surging so aggressively Thursday morning was premature since a bottom had not signaled it was yet even forming. That impatient buying was reversed to a new low close that produced a gap down Friday, quickly nearing the next lower target at 1.0865.
Gold Dec Contract (GC, ETF: (GLD))
Probing back under 1266.00 overnight was recovered into Friday’s open, and held as support through the day, without trying to resume the rally.
Silver Dec Contract (SI, ETF: (SLV))
Friday’s narrowly ranging session showed no signs of confirming the week’s earlier surge had attracted any new sponsorship.
30-year Treasury Dec Contract (US, ETF: (TLT))
Fresh recovery highs tested 165-02, whose recovery would help to confirm the 165-30 and 166-19 targets remain intact.
Crude Oil Dec Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Gapping down Thursday was a little too abrupt for already launching a new downleg after having held the rally’s 51.50 target retest only one day earlier. It being premature was somewhat confirmed by Friday’s narrow range, which does help to launch a more credible downleg.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
Although Thursday’s reaction to EIA ultimately held its 3.14 pullback limit, despite testing its room for noise down to 3.09-3.11, Friday’s open gapped down under Thursday’s low and trended down intraday to probe under 3.00. This is a breakout from a multi-session range, so closing lower Monday would entrench the decline and not allow a rally to form near-term. Closing Monday back above 3.14 would be the minimum to suggest a bottom may form.
Look ahead: Economic Calendar – for Mon Oct 24, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Monday’s two morning econ reports have limited reliability for influencing price action. But an almost steady supply of Fed speakers offer stimuli — at least for volatility. Meanwhile, quarterly earnings continue but with much less influence on overall market price action.
Chicago Fed National Activity Index
8:30 AM ET
*William Dudley Speaks
9:00 AM ET
*James Bullard Speaks
9:05 AM ET
PMI Manufacturing Index Flash
9:45 AM ET
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET
*Charles Evans Speaks
1:30 PM ET
*Jerome Power Speaks
1:45 PM ET
Afternoon Bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2140.25 | 2133.75 |
| …would target | 2146.00 | 2139.75 |
| Bias-down: under | 2134.00 | 2127.75 |
| …would target | 2127.75 | 2121.25 |
| 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… Too little, too soon.
Extended dip stops short of next target.
Gapping down to test yesterday’s 2126.50 low was likely to react up through the morning. Relentlessly expending selling pressure overnight, and opening at structural support, wasn’t likely to produce or attract more sponsorship to its trend. On expiration, that could have gone either way — but not ranged flat.
That opportunity disappeared when pre-open action slid sharply to 2123.50. The next opportunity for reversing up would come from testing the next structural support at 2121.25. But the post-open bounce to 2127.00 was only retraced to retest its origin — calculable support at the 2124.00 bias-down target.
2124.00 held its retest. And held. And held and held. Four attempts to break lower failed. Even the most bearish scenario was beginning to require a bounce to stretch the rubber band first.
That bounce is getting to be a stretch, alright. It tested the 2130.50 bias-down signal by 1 point. It’s still being overlapped, and not rejected. Enough time was spent maintaining the gap down to create an anchor, and to expect the bounce to fail. But not reversing down from here — triggered under 2128.00 — could fill the gap back up to yesterday’s 2137.00 close.
Pre-market Tour (recording & summary)
An earlier 4-point bounce off of the 2128.75 low had been retraced entirely. A shallower bounce then also failed, forming a Descending Triangle. And the pattern has broken lower. Sharply lower. The pre-open dip sliced through yesterday’s 2126.75 low down to 2123.50.
If support at yesterday’s low isn’t going to contain the overnight selling, then “lower prior highs” at4 2121.25 from Monday’s close will be the next opportunity to immediately attract post-open buyers. Perhaps the last opportunity, prior to breaking lower and trending down through the day to probe under last week’s lows.
Details and other markets coverage are discussed in the pre-market Tour recording here.