Posts by Rod David
Pre-close View… Ineffectual pessimism.
Hovering at the lows without breaking lower.
Trending wasn’t likely today due to the Jewish holiday limiting the day’s volume and sponsorship. So, testing a relevant support below isn’t remarkable. Its test isn’t required to react up, let alone to be replaced by a bounce. But that was tried anyway.
And it’s not exactly succeeding. More optimism would enable a bigger bounce. So, pessimism is winning out. And that pessimism is potentially bullish from a contrarian perspective.
Breaking lower would be unlikely to do more than retest the noon hour’s 2146.75 lows. But breaking higher has room up to unchanged at 2160.00 before becoming trending. Again, though, there’s no requirement to trend at all, or even a likelihood before Tuesday.
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))
Friday’s recovery of its gap down wasn’t validated Monday, as price dipped back under 1.1265 again. While a second consecutive lower close would be helpful confirmation, an aggressive drop would be appropriate, and much better confirmation of a new downleg underway.
Gold Dec Contract (GC, ETF: (GLD))
Opening weaker Monday to extend Friday’s reaction down extended to probe 1311.00, as no more backing-and-filling should be needed to extend to the 1296.00-1297.00 target.
Silver Dec Contract (SI, ETF: (SLV))
Monday’s opening slide probed last week’s low to test 18.75, presumably resuming the decline targeting fresh lows under 18.45.
30-year Treasury Dec Contract (US, ETF: (TLT))
Recovering from Friday’s close back under the 168-22 pullback limit needed Monday’s open to gap back above it, which it did not, instead of probing lower, which it did. But probing lower was still ranging around Friday’s intraday lows, preventing momentum from reversing down.
Crude Oil Nov Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
The outstanding 49.00 target was attacked overnight to within 13 cents, but that overnight high wasn’t retested until Monday afternoon. While this fulfills the rally’s objective, it could extend so long as pullbacks now hold any test of 47.95.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
Friday’s lower close had already made the next lower gap likely to be filled, which was done at 2.81. Turning positive into the close does allow a retest of Monday’s low to hold Tuesday which would form a bottom.
Mid-day Update… And back again.
Range’s lower-end should hold.
Many usual participants aren’t available today due to the Jewish holidays. So, breaking beyond a relevant support or resistance is difficult. Fluctuating between them is easier, although none is required to be tested.
The noon hour low did test Thursday’s close around 2147.50. RSIs diverged positively on its retest, and the reaction has bounced as high as 2152.25. That still didn’t trigger this afternoon’s 2154.25 bias-up signal, but neither did it trigger the 2147.50 bias-down.
So although bouncing any higher isn’t required, it’s natural. And 2154.25 can be tested or probed while waiting for the bias environment to lapse. Then, limited participation or not, probing higher would be credible for gaining traction.
Similarly, exiting the bias environment by probing under 2147.50 could extend. There would still be sponsorship problem, but something more substantial might be underway to have inhibited a bigger bounce.
Look ahead: Economic Calendar – for Tue Oct 4, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Tuesday’s calendar is unremarkable, perhaps the one such day this week as focus shifts to Friday’s payrolls and the usual high-profile reports that precede it.
Jeffrey M. Lacker Speaks
8:05 AM ET
Gallup US ECI
8:30 AM ET
Redbook
8:55 AM ET
4-Week Bill Auction
11:30 AM ET
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2161.75 | 2154.25 |
| …would target | 2167.50 | 2160.00 |
| Bias-down: under | 2155.00 | 2147.50 |
| …would target | 2149.00 | 2141.50 |
| 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.