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))
Gaping up Friday wasn’t likely to extend, but it did fill the gap outstanding above and neutralize its attraction. Yellen’s flurry of headlines triggered a steep reaction down to fresh lows for the week, another breakout attempt that would be confirmed by a second consecutive lower close on Monday.
Gold Aug Contract (GC, ETF: (GLD))
Friday’s gap up tried to form an Island of Thursday’s range. But that was doomed since Thursday’s lower close had confirmed Wednesday’s breakout. The gap back up to Tuesday’s 1346.50 close was filled to within 50 cents and reversed down into negative territory under 1324.00. An eventual third lower close remains outstanding.
Silver Sep Contract (SI, ETF: (SLV))
Friday’s gap up extended sharply higher and back down again amid Yellen’s headlines. Negative territory was never probed, let alone a negative close, although an eventual third lower close remains outstanding.
30-year Treasury Sep Contract (US, ETF: (TLT))
Wide swings reacted to Friday’s Yellen headlines, first probing under 171-22 to 171-06. Spiking up attacked 173-04 to within 1 tick before reversing down again to retest 171-06..
Crude Oil Oct Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Friday’s rally tested the last relative high above 48.35, which must be recovered to put into play fresh highs. Otherwise, so long as its resistance holds, the Descending Triangle now supported at 46.60 continues to develop, .
Natural Gas Sep Contract (NG, ETF: (UNG, UNL))
Room for a pullback to 2.79 wasn’t fully utilized by Friday’s shallow gap down. Reversing up extended to fresh highs. Since Thursday had already fulfilled the minimum requirement created by Tuesday’s confirmed breakout, extending higher immediately anyway suggests the rally will extend, presumably to fill the gap outstanding above at 2.98.
Mid-day Update… What comes around can keep coming around.
REMINDER: I WILL LIKELY BE AWAY FROM THE SCREENS LATER THIS AFTERNOON.
So, excessive optimism got another clobbering on its stiff upper-lip.
The next higher objective at 2187.00 was attacked to within 1 tick, by errant ticks, while RSIs became overbought simultaneously — in reaction to news. That can undermine the requirement to be retested, but it’s moot at the moment.
Another set of headlines triggered a reaction down to and through the morning’s 2170.25 low to 2160.75. Oversold RSIs during the noon hour can undermine its retest requirement, too. After drifting up to attack 2168.00, another dip only attacked this afternoon’s 2162.00 bias-down signal.
Tenuous conditions triggered this morning’s rally, and that had kept us vigilant for the potential of collapsing to new lows. The specifics may have changed, but the conditions remain tenuous. Recovering back above yesterday’s ~2168.00 lows wouldn’t necessarily reflect accumulation, but still drift back up into the close.
There’s otherwise no bullish reason to revisit the noon hour’s low. Neutralizing Its oversold RSIs would only risk focusing new sellers on the Friday Factors’ illiquidity.
Look ahead: Economic Calendar – for Mon Aug 29, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: The week’s first econ reports have no track record for influencing price action. More influential would be the undercurrent of reports from the weekend in Jackson Hole.
Personal Income and Outlays
8:30 AM ET
Dallas Fed Mfg Survey
10:30 AM ET
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET
Afternoon Bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2177.00 | 2175.00 |
| …would target | 2182.50 | 2180.50 |
| Bias-down: under | 2170.00 | 2168.00 |
| …would target | 2164.00 | 2162.00 |
| 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… Uncalm after the storm.
Pre-Yellen optimism vs. post-Yellen optimism.
The relatively narrow overnight range had tried breaking lower pre-open. Its pre-open recovery became a post-open surge, from 2174.25 up to 2180.75.
Rather than patiently hunkering down ahead of Yellen’s remarks, the market decided to greet them with a stiff upper-lip. Clearly, the open had become a battle between optimism and pessimism. And Yellen’s remarks clobbered optimism right in its stiff upper-lip.
Already ahead of her comments and triggering a sell signal under 2178.00, price plunged in reaction down to the setup’s 2170.75 target.
Excessive optimism, meet excessive pessimism.
Even more impressive was its immediate reaction back up to a fresh high at 2181.50. Another reaction down held the 2177.00 bias-up signal as support, gravitated around a 2178.75 sell signal (which had been unfinished business from yesterday, and surged again to attack 2187.00.
That’s the renewed bias-up target. It’s not officially in-play, since the 2182.00 bias-up target was still being overlapped at 10:15. But exceeding 2187.00 through 10:30 would suggest a bigger squeeze into the noon hour.
Meanwhile, back under 2180.50-2181.25 would open the door to fresh session lows, if not also for the week.