Posts by Rod David
Pre-close View… Digesting a detour down?
Retracing the noon hour’s slide.
Whatever triggered the noon hour’s 8-point slide from 2143.00, it had follow-through. The noon hour exit was probing fresh lows down to 2133.00, and the bias environment entry was on its way down to 2128.00.
All of which triggered the 2136.00 bias-down signal and fulfilled its 2130.00 target.
An 8-point rally exited the bias environment at its 2136.00 bias-down signal. And the final hour is being entered at 2139.00. That’s still short of the noon hour plunge’s 2143.00 origin, or its potential for just a correction up to 2141.50.
Back under 2135.50 would signal the bounce had ended, likely to close back under 2134.00 and reconfirm the distributive market. But trending up through the 3:10-3:20 proxy window would at least make tomorrow morning likely to retest today’s highs.
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 deep drop under its 1.1265 sell signal (basis Dec) did not extend down Monday to confirm. But gapping up and firming within Friday’s range is not an appropriate bottom, making the decline likely to extend down anyway.
Gold Dec Contract (GC, ETF: (GLD))
Monday’s gap up from Friday’s test of support was not an appropriate finish to the decline, making it likely to resume, and still targeting 1296.00-1297.00.
Silver Dec Contract (SI, ETF: (SLV))
Gapping up Monday above last week’s ~19.15 highs tested 19.35 resistance, which is likely to hold and launch another downleg targeting fresh lows.
30-year Treasury Dec Contract (US, ETF: (TLT))
Still testing the 165-20/165-30 bounce limit Monday didn’t range any wider than Friday’s test, making the gap back down to Thursday’s 165-02 close even likelier to be filled regardless of the resolution.
Crude Oil Oct Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Gapping up Monday to 43.65 and extending higher intraday to test 44.15 only filled the gap back up to Thursday’s close, neutralizing its attraction above. The pattern remains likely to resolve in new lows targeting a test of 42.25.
Natural Gas Oct Contract (NG, ETF: (UNG, UNL))
Gapping down slightly on Monday only ranged narrowly around 2.91. Friday’s breakout wasn’t confirmed, but neither was its intraday recovery rejected, remaining likely to launch a new upleg targeting at least 3.04.
Mid-day Update… Bad bounce, bad.
Noon hour reverses gap up and extension.
The morning’s rally was well-signaled. Pre-open pessimism down to 2138.25 was countered by restrained optimism testing 2141.50, then a post-open surge sliced through prior highs up to 2146.75.
RSIs got overbought, and price reacted down. Although it had room down to 2141.25 without yet reversing momentum down, it could have been shallower. It wasn’t, and 2141.25 was soon tested as support. Bouncing to 2143.75 almost resumed the morning’s rally. But the noon hour’s entry soon plunged to test 2135.00. And that has extended down to 2132.75.
Once again, 2134.00 has tried recovering. And once again, a recovery above 2134.00 is at risk of failing.
Back above the 2136.00 bias-down signal would not require extending any higher, but it would establish a lower-end for the next hour that is still likely to bounce, perhaps to retest the high’s overbought RSIs. The grace period was just invoked, and could still trigger bias-down.
Look ahead: Economic Calendar – for Tue Sep 20, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Just one econ report Tuesday, from the housing sector, which hasn’t had any surprises recently. But the sector has several more data coming this week almost daily, so anything that deviates from the baseline could have more impact.
Housing Starts
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 | 2152.50 | 2145.25 |
| …would target | 2157.75 | 2150.50 |
| Bias-down: under | 2143.25 | 2136.00 |
| …would target | 2137.50 | 2130.00 |
| Signal status: LATE 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.