Posts by Rod David
Pre-close View… Leaving earth’s atmosphere?
Afternoon rally to fresh highs.
I noted this morning that sellers had dumped a lot of ballast during the 10-point drop, without gaining any traction for the effort. Now having rallied 19 points off the low, the question is whether those buyers are rewarded enough for now to allow another pullback.
The afternoon’s no-bias environment did rally up to its 2152.00 bias-up signal. Its test was likely to include 2153.00, which was probed by 3 ticks. Trending higher remained the likely resolution, which was launched after a pullback to 2151.50.
The launch came 5 minutes before coming within 10-15 minutes of the 2:30 bias environment exit. It wasn’t optimal, but it was allowable, given that it wasn’t organic but triggered by a headline. Anyway, the open’s anchor was recovered on the way up to 2163.25.
That’s a 61.8% retracement of Friday’s range, natural resistance. Holding above 2159.50 would keep alive the upside momentum. And the next higher objectives are 2169.00 and then 2175.50. The alternative is not to reverse the trend down, but another pullback would become likely under 2158.00.
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 break back under its 1.1265 sell signal had not extended through the close, but Wednesday’s follow-through did. And the second consecutive lower close confirms that at least an eventual third lower close is outstanding.
Gold Dec Contract (GC, ETF: (GLD))
Extending Tuesday’s steep drop to 1321.00 both confirmed the break from a multi-session range, as well as broken under 1329.00-1332.00 support. At least an eventual third lower close is required, probably as part of a larger downleg, which is targeting 1296.00-1297.00 so long as 1332.00 is not recovered.
Silver Dec Contract (SI, ETF: (SLV))
Tuesday’s confirmation of Monday’s 19.75 sell signal was extended on Wednesday, fulfilling the setup’s minimum required third lower close. The decline’s momentum remains intact so long as 19.35 is not recovered.
30-year Treasury Dec Contract (US, ETF: (TLT))
Wednesday’s open was still not rejecting Tuesday’s confirmation of Monday’s breakout, making higher highs likelier sooner, rather than later, Its 170-02 was tested at Wednesday’s high. Momentum doesn’t reverse down so long as 169-06 holds as support.
Crude Oil Nov Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Initial firming Wednesday on bullish OPEC headlines was extended to test 44.80 in reaction to the morning’s EIA report. That filled the gap back up to Monday’s close, enabling a steep reaction back down to attack Friday and Tuesday’s 44.20 lows. The retracement was recovered to 46.00 when another OPEC headline triggered a sure to 46.70, back above last week’s highs. A higher close remains outstanding, likely to test 49.00.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
Gapping down Wednesday retested the 2.93 “lower prior highs” that had held Friday’s lows, and which already had produced Monday’s bounce. The retest down to 2.90 seems to have held by bouncing to 2.95, which maintains the recent dip as being only a temporary pullback.
Mid-day Update… Ballast overboard.
Morning’s drop fulfills selling pressure.
Maintaining the open’s gap up through the open has created an anchor. That anchor can come in handy when price doesn’t simply extend the gap.
Price did not extend higher this morning. That was a problem for the recovery, since the open also held a test of its 2155.00 bias-up signal. Triggering no-bias then put into play an offsetting test of the 2145.00 bias-down signal.
2145.00 was tested by this morning’s lows. Every bar probing under it was also overlapping it. Holding meant that all selling pressure was expended without gaining new traction for the effort.
Reacting up into the noon hour has only ranged sideways. Fresh highs being probed now are coming too late to trigger the afternoon’s 2152.00 bias-up signal. Its test was likely, and is being fulfilled, but still needs to define the bias environment’s upper-end.
When the no-bias environment is at least within view of lapsing, then trending higher would be more reliable. The alternative is not necessarily to resume this morning’s decline. But back under 2148.25 again would be suspicious.
Look ahead: Economic Calendar – for Thu Sep 29, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Thursday’s calendar is busy. And it’s as busy with Fed speakers as it is with actual econ reports. Several of the reports are high-profile, but none are reliably influential to price action. At least, none on its own. But four are released simultaneously before the market, which could have an effect. And any direct effect to them would likely be duplicated by a post-open report.
Esther George Speaks
WED 7:15 PM ET
Patrick Harker Speaks
5:00 AM ET
GDP
8:30 AM ET
International Trade in Goods
8:30 AM ET
Jobless Claims
8:30 AM ET
Corporate Profits
8:30 AM ET
*Dennis Lockhart Speaks
8:50 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
*Jerome Powell Speaks
10:00 AM ET
Pending Home Sales Index
10:00 AM ET
EIA Natural Gas Report
10:30 AM ET
*Neel Kashkari Speaks
2:30 PM ET
Farm Prices
3:00 PM ET
Esther George Speaks
4:15 PM 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 | 2159.50 | 2152.00 |
| …would target | 2164.75 | 2157.50 |
| Bias-down: under | 2151.50 | 2144.25 |
| …would target | 2145.75 | 2138.25 |
| 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.