Posts by Rod David
Post-market Wrap (recording & summary)
Monday’s close above 2134.00 undermines the trend change setup. Most other elements of the intraday rally were were not bullish.
The recovery stopped short of Friday’s 2157.50 opening print, which is both a natural attraction and resistance. Last week’s “higher prior lows” were tested, neutralizing their attraction above. Only the bias environment exit probed higher so no traction was gained for the effort, meaning that the day’s buyers were fulfilled. The overnight low at 2100.25 was the least bit pessimistic to qualify as testing “lower prior highs” which is potentially bearish from a contrarian perspective. And the overnight low was complex enough to qualify as a “new Globex trend extreme” requiring intraday retest.
The gap back to Thursday’s 2173.00 close doesn’t require being filled, but probably will be filled anyway if Tuesday’s open were to maintain a gap up. Gapping down under Monday afternoon’s 2130.50 low would form a “session-long decline” setup, but that’s not the only path down. Signals are too mixed to be overwhelming in either direction.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
Pre-close View… Self-fulfilling.
No traction gained for today’s bounce.
This afternoon’s bias environment started lapsing above the noon hour’s 2138.00 high. Probing higher wasn’t maintained into the final hour, not enough to confirm the recovery had gained traction. The 3:10-3:20 window was greeted at the high, and still couldn’t confirm by proxy.
None of which prevents extending higher or reversing down. But extending higher would be in the context of a temporary corrective bounce. The 2134.00 bound limit would be recovered, so near-term downside would all but require gapping down sharply Tuesday.
Meanwhile, back under 2147.00 would be credible for extending down already anyway. The reward would be to retrace back under overnight lows, although not necessarily today.
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 Sep Contract (EC, ETF: (FXE, UUP))
Initially rallied Sunday night to 1.1265 resistance, but greeted Monday unchanged. Another rally intraday retested 1.1265, without signaling a resolution either way.
Gold Dec Contract (GC, ETF: (GLD))
Thursday’s break under 1234.50 extended into Monday morning to test 1323.50. Holding 1229.00-1232.00 as resistance confirms momentum is reversing down, eventually targeting 1296.00-1297.00.
Silver Dec Contract (SI, ETF: (SLV))
Thursday’s break under the 19.75 sell signal extended down Sunday night to gap down sharply Monday and test 18.80. A retest of prior lows is in-play so long as bounces now hold 18.35 as resistance.
30-year Treasury Dec Contract (US, ETF: (TLT))
Perhaps there was some flight-to-quality Sunday night inhibiting another drop while stocks dropped further. But bonds didn’t bounce as stocks recovered Monday. That’s probably because Friday’s second consecutive lower close already confirmed Thursday’s break under 170-00 to require at least an eventual third lower close, potentially to 165-20 / 165-30.
Crude Oil Oct Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Sliding sharply Sunday night greeted Monday back under the 45.80 bounce objective that was put into play when 44.20 was exceeded last week, on the way up to 47.75. The morning rallied back into positive territory at 46.50. Closing under 45.80 would signal momentum reversing down to resume the decline, targeting at least a gap fill at 43.20.
Natural Gas Oct Contract (NG, ETF: (UNG, UNL))
Probing higher Sunday night extended sharply higher Monday morning up to 2.92. While prior highs around 3.04 remain in-play, the pattern has formed three days of a four-session sequence that makes Tuesday’s close likely to be in negative territory — which would be relevant if the morning were probing positive territory. Regardless of whether the setup were fulfilled — its inverse was not fulfilled at last week’s low — the upleg remains intact.
Mid-day Update… Refueled, and then some.
Corrective bounce limit being tested.
Not connected to the intraday gyrations is a corrective bounce limit at 2134.00. It may be probed intraday, so long as any probe above it is isolated to a timing window.
Interestingly, it was probed by a knee-jerk reaction’s spike up to 2143.50 on dovish comments from a dovish Fed speaker. That same spike fulfilled the 2141.25 bias-up target. Its reaction down overlapped the 2136.00 bias-up signal in time to invoke the grace period. triggered late no-bias triggered at 1:30.
Late no-bias after fulfilling the bias-up target already reacted down to 2130.75, suggesting that buying pressure is ending. That doesn’t necessarily mean reversing down immediately — the afternoon bias environment is not an optimal time for trending.
Overbought RSIs at the 2143.50 high don’t require a retest for being a news reaction, but a retest has room for noise up to 2145.00 or 2147.00. And back above 2136.75 has signaled that retest underway.
Exiting the bias environment or entering the final hour back under 2134.00 would likely be followed by retracing much of today’s rally. Potentially, all of it — if not today, then probably overnight. Closing above 2134.00 would require gapping down tomorrow to confirm the trend has reversed down.
Look ahead: Economic Calendar – for Tue Sep 13, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: The 30-year auction has been moved to Tuesday from its normal Thursday timing. The change is otherwise irrelevant, except for becoming a little likelier for awhile to influence price action. And this auction is being greeted by an especially volatile pattern, having broken sharply from a lengthy sloppy, choppy range .
NFIB Small Business Optimism Index
6:00 AM ET
Redbook
8:55 AM ET
4-Week Bill Auction
11:30 AM ET
52-Week Bill Auction
11:30 AM ET
*30-Yr Bond Auction
1:00 PM ET
Treasury Budget
2:00 PM ET