Posts by Rod David
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))
Thursday’s key reversal from probing above 1.1300 was immediately productive, trending down overnight to gap down Friday, and to extend down lower intraday. Closing under 1.1225 confirms momentum has reversed down.
Gold Dec Contract (GC, ETF: (GLD))
Friday’s open was still struggling to let go of the 1343.00 sell signal that was being overlapped at Thursday’s close. Selling pressure was relentless and eventually succeeded to drop more decisively intraday, testing 1334.50 whose break would confirm momentum has reversed down.
Silver Dec Contract (SI, ETF: (SLV))
Thursday’s break under the 19.75 sell signal had extended down overnight, which persisted through Friday morning to test 19.35, whose break would help to confirm that momentum has reversed down.
30-year Treasury Dec Contract (US, ETF: (TLT))
The very productive sell signal that triggered Thursday under 170-00 was extended down sharply overnight after holding a test of the 168-22 bounce limit. Gapping down and trending lower tested 167-28. The second consecutive lower close confirms a breakout that now requires at least an eventual third lower close — potentially to 165-20 / 165-30 — before a recovery would be credible.
Crude Oil Oct Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Thursday’s test of 47.55 resistance reacted down sharply overnight, and Friday’s gap down to its 46.80 pullback limit extended lower throughout the morning to attack the 45.80 sell signal. Its break is likely so long as bounces now hold tests of 46.55.
Natural Gas Oct Contract (NG, ETF: (UNG, UNL))
Already probing only slightly higher overnight, Friday’s session didn’t so much close higher as much as maintain the firming up to 2.82. Not an optimal second consecutive higher close, so not optimal confirmation of Thursday’s breakout from the four-day sequence preceding it.
Mid-day Update… Air pocket, indeed.
Not getting better.
The noon hour low was so oversold that it would either bounce to refuel, or else capitulate. The market seems to have chosen the latter path. Making it more bearish is that the market didn’t have to choose the more pessimistic path. This morning’s bias-down signal had remained influential throughout the noon hour as did Wednesday morning’s bearish Pivot Reversal. The air pocket down to the 2140.00 area was fulfilled.
Consolidating narrowly at or above 2140.00 for an hour broke lower into the bias environment. Although probed lower, the 2137.50 bias-down target was touched by the 1:20 bar to avoid renewing the bias-down signal. That doesn’t change whether this is a bias-down environment — it is, and fresh lows are now attacking 2131.00, which is 41 points under yesterday’s cash session close.
I’ve been commenting in the chaRTroom about this being a very bearish pattern. Today’s price action has been a continual series of lower lows and lower highs. The gap down back to last Thursday’s close has extended below the multi-day consolidation that had developed into last Thursday. And just look at the damage being done to the bigger picture.
Today will not form a bottom, and Monday will be unusually vulnerable to repeating today’s pattern of gapping down and extending sharply lower throughout. Having said that, entering the noon final hour back above the bias environment’s 2138.00 high could get squeezed up to 2150.50.
Look ahead: Economic Calendar – for Mon Sep 12, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Monday’s pre-open Fed speaker is too early to reliably impact intraday action. But Fed speak is even higher-profile now than normal, and being Monday’s first even can set the tone for the day. One of the afternoon’s Fed speaker is rarely surprising, but that’s secondary as rate hike anticipation grows, and with another Fed speaker timed then, too.
*Dennis Lockhart Speaks
8:00 AM ET
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET
*Neel Kashkari Speaks
1:00 PM ET
*Lael Brainard Speaks
1:00 PM ET
3-Yr Note Auction
1:00 PM ET
10-Yr Note Auction
1:00 PM ET
Afternoon Bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2157.75 | 2149.75 |
| …would target | 2157.75 | 2155.00 |
| Bias-down: under | 2150.50 | 2142.75 |
| …would target | 2145.50 | 2137.50 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET MET | 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.
Post-open Review… Into the air pocket.
Overnight slide extending sharply lower.
Surely, you don’t need me to tell you that the 2167.25 bias-down signal triggered. And you probably know already that its 2162.25 target was exceeded in time to renew the bias-down signal. You also know its renewed bias-down target is 2155.00. But you might not have known that it, too, was exceeded through 10:15 to renew the bias-down signal. And its renewed target is 2149.75.
2149.75 was initially only overlapped by the 2149.00 low. A bounce to 2154.00 returned down to test 2149.75 It has now broken lower to 2145.25.
Simultaneously oversold RSIs at the 2149.00 low are now followed by oversold RSIs at 2145.25. Any bounce is doomed to failure. And a Friday’s bias tends to persist through the noon hour. A test of the 2140.00 area could develop quickly,
Otherwise, back above 2153.00 is needed to trigger a corrective bounce targeting at least 2156.50, if not also 2162.26. And 2153.00 is a long way above.