Posts by Rod David
Post-market Wrap (recording & summary)
Wednesday’s session was full of promise. From the traction gained by Tuesday’s decline that would produce downtrending action the next morning, to the gradual recovery after gapping up. Even the last hours breakout above 2156.50 was unfulfilling, extending shallowly up to only 2158.00, and then reacted down sharply to 2152.00 through the close.
But although that late drop was relatively steep and sizeable for the day, it didn’t damage the intraday coiling and pent-up buying pressure. Certainly, the template had been warning the recovery might need a rubber band effect to stretch price down so it could snap back up. But that was earlier, and its late appearance left too little time to attract new sponsorship.
If the intraday restrained optimism is pessimistic enough to be bullish from a contrarian perspective, then not gapping down would be likely instead to gap up. Gapping down wouldn’t necessarily be bearish, unless gapping under Wednesday’s 2149.75 low.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
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))
Similar to the follow-through from Friday’s gap down and intraday recovery, the next session only ranged narrowly, remaining under 1.1265 resistance. Not extending the recovery higher continues to suggest the dips are chipping away at support before extending down.
Gold Dec Contract (GC, ETF: (GLD))
Fresh lows Wednesday fulfilled the next lower objective at 1266.00 by $2. Closing under Tuesday’s low is a second consecutive lower close that now requires at least an eventual third lower close before any recovery could be durable.
Silver Dec Contract (SI, ETF: (SLV))
Wednesday’s fresh lows under 17.60 can extend lower so long as 17.85 holds bounces. Otherwise, closing back above 18.00 would start to signal momentum reversing up, at least initially for a sizeable bounce.
30-year Treasury Dec Contract (US, ETF: (TLT))
The two-week old low’s consolidation was probed more deeply Wednesday down to 165-09. But just closing back above 165-20/165-30 maintains that this week’s drop can be only a temporary correction. Firming Thursday would allow Friday’s Employment Situation report to be greeted from a position of strength and momentum.
Crude Oil Nov Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Fulfilling the rally’s 49.00 target did not end the upside momentum, especially so long as pullback limits are held. Wednesday’s gap up now raises the pullback limit to 48.35.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
Gapping down slightly Wednesday was optimal for restraining optimism of Tuesday’s intraday recovery from initially probing negative territory. The pattern repeated itself Wednesday, recovering back into positive territory again. Filling the gap back up to 3.04 without closing decisively above it would be vulnerable to an initially negative knee-jerk reaction down on Thursday’s EIA report, but the pattern remains likely to recover.
Mid-day Update… Narrowly upheld.
Hovering at the morning’s highs.
Fluctuating choppily around this morning’s 2153.00 bias-up target between 2150.00-2155.00 hasn’t really broken out either way. The ascending triangular pattern did eventually break higher at noon. Momentarily. Shallowly. Ranging more narrowly since then has been centered around the morning’s 2155.50 high.
None of which is a sell signal. The morning’s price action wasn’t inconsistent with having inverted yesterday’s bearish setup, although not much exploited. Now the renewed bias-up signal has lapsed, without creating any required upside objective.
But the pattern isn’t bearish. Resolving up remains likelier than down. Still, a blip-down may become necessary to stretch the rubber band for snapping back up, especially if not already rallying out of this afternoon’s bias environment.
Dipping under 2150.50-2151.25 could be too deep of a stretch to snap back up. At least, not before attacking yesterday’s lows — which would risk breaking under them.
Look ahead: Economic Calendar – for Thu Oct 6, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Jobs-related reports keep coming in as Friday’s Employment Situation report nears. So, while they may be high-profile, but none of Thursday’s reports have a reliable track record for influencing price action .
Challenger Job-Cut Report
7:30 AM ET
Jobless Claims
8:30 AM ET
Gallup Good Jobs Rate
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
EIA Natural Gas Report
10:30 AM 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 | 2163.00 | 2156.50 |
| …would target | 2168.75 | 2162.25 |
| Bias-down: under | 2157.00 | 2150.50 |
| …would target | 2151.25 | 2144.75 |
| 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.