Posts by Rod David
Pre-close View… That’s going to leave a mark.
Sellers gained traction.
Retesting last week’s lows down to only the 2138.00-2139.00 area could have sufficed to define weak-handed sponsorship, still vulnerable to a big short-squeeze. Now a short-squeeze has become less likely, and not simply because the retest extended down to 2136.00.
It’s when the lows developed, which indicated that sellers gained traction for their efforts.
The bias environment was exited at 2:30 under the noon hour’s low, and the final hour was entered at 3:00 under the bias environment’s low. Regardless of almost any pre-close price action, tomorrow morning is now likely to trend down deeper. Not probe, not fluctuate, but trend.
Gapping up could reject or invert sellers’ traction, and become as bullish as the setup would have been bearish. Bouncing right now ahead of the 3:37-3:52 position-squaring window is likely to fail and probe fresh session lows. A short-squeeze instead would have to retrace the entire afternoon drop to be relevant.
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))
Repeating Friday’s gap down under prior lows also repeated Friday’s dramatic recovery back above 1.1265. A little less so on Tuesday, reacting down from filling the gap back up to Monday’s close. Regardless, the trend remains down so long as 1.1265 is not recovered.
Gold Dec Contract (GC, ETF: (GLD))
Gapping down and then plunging at Tuesday’s open quickly fulfilled the longstanding 1296.00-1297.00 target, probing under it down to 1283.60. But consolidating there resolved down sharply, too, to 1269.00, next targeting 1266.00 so long as bounces hold 1293.00-1294.50.
Silver Dec Contract (SI, ETF: (SLV))0
The longstanding retest of 18.45 was met soon after Tuesday’s initial opening plunge. Then it was probed considerably down to 17.75. Bounces have room up to 18.25 whether maintaining the decline’s momentum or forming a bottom
30-year Treasury Dec Contract (US, ETF: (TLT))
Although Monday’s narrow ranging around Friday’s 167-30 low had only failed to reject its dip, and did not actually signal extending down, Tuesday did extend down to sharply lower lows at 166-12. This tests natural support back down to “lower prior highs” of the original bottoming pattern, and back above 167-00 would signal the pullback had ended.
Crude Oil Nov Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Having met its 49.00 target after Monday’s close, and then retesting it eventually Tuesday morning. The test held as resistance, but it was not rejected, and there is no change to the 47.95 pullback limit.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
Recovering Monday from filling the next lower gap still needed to hold a retest of Monday’s low for any credible bottom to form so quickly. Tuesday’s low only retested the 2.88 gap before reversing up sharply into positive territory at 2.97. That’s bullish enough to suggest that any initial follow-through Wednesday not gapping up significantly would be credible for extending higher intraday.
Mid-day Update… A whirlwind tour.
Choppy morning was only the half of it.
Quickly recovering this morning’s dive was limited to its 2156.50 bias-up signal, which needed to define the no-bias environment’s upper-end. More than that, it pushed price back down to retest the initial dive’s 2147.75 low. And lower, down to 2145.00.
Still being a no-bias environment, and being under the 2148.75 bias-down signal, a recovery was required. Only back up to 2148.75 would have sufficed, but 2156.50 was retested. By then, the bias environment was starting to lapse, so probing above it was allowed.
But not required. The noon hour settled back in around 2148.75.
Not already recovering before the noon hour end came into view would be bearish. Retesting the morning’s lows upon exiting the noon hour would be bearish. Both conditions were met, and to erase any doubt, the noon hour’s exit slid to fresh lows at 2138.50.
Bias-down triggered, its 2140.75 target was met, and the likelihood for retesting last week’s lows down to 2138.00-2139.00 has been fulfilled. Oversold RSIs at the low undermine whether this dip can recover, but back above 2143.50 would get a benefit of the doubt. Otherwise, exiting the bias environment trending down could extending the drop into Thursday.
Look ahead: Economic Calendar – for Wed Oct 5, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: It’s Employment Situation week, bringing focus to many jobs-related reports. Among the highest-profile is ADP’s report. While its data help economists to fine-tune their expectations for Friday’s number, reaction to ADP helps me fine-tune expectations for the market’s behavior into and out of the number. Meanwhile, this week’s EIA report should have more significant impact considering Crude’s reaction to the rally’s target.
Charles Evans Speaks
TUE 7:40 PM ET
MBA Mortgage Applications
7:00 AM ET
*ADP Employment Report
8:15 AM ET
International Trade
8:30 AM ET
Gallup U.S. Job Creation Index
8:30 AM ET
Neel Kashkari Speaks
9:30 AM ET
PMI Services Index
9:45 AM ET
Factory Orders
10:00 AM ET
ISM Non-Mfg Index
10:00 AM ET
*EIA Petroleum Status Report
10:30 AM ET
Jeffrey M. Lacker Speaks
1:00 PM ET
Jeffrey M. Lacker Speaks
5:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2159.75 | 2152.00 |
| …would target | 2165.25 | 2158.00 |
| Bias-down: under | 2153.50 | 2146.25 |
| …would target | 2148.00 | 2140.75 |
| Signal status: BIAS-DOWN | 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.