Posts by Rod David
Post-market Wrap (recording & summary)
There is no unfinished business above. Last Monday’s high was barely pierced, but simply touching it would have fulfilled its required retest. Drifting lower from there throughout the day doesn’t suggest the uptrend’s momentum has lapsed, or that new counter-trend sponsorship has arrived.
But reacting down instead of trend higher was more relevant for what it prevented. Not trending above last week’s high avoided a clean breakout. Closing above the interim range doesn’t qualify as a breakout, but extending higher Wednesday could marginalize sellers in the near-term.
Otherwise, a top continues forming. Breaking back down without further delay would be an entirely credible start to a durable downleg. But probably only if gapping down, since sellers didn’t gain traction for their efforts Tuesday.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2191.00 | 2188.75 |
| …would target | 2197.00 | 2195.00 |
| Bias-down: under | 2184.75 | 2182.75 |
| …would target | 2179.25 | 2177.00 |
| Signal status: LATE BIAS-DOWN | FAQ | |
| INTRO VIDEOS #1 and #2 | ||
1. At 10:15, 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 10:15 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 10:15 would invoke a grace period through 10:30 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 10:30 after invoking the grace period would trigger “noN-bias,” with no bias influence.
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))
Not yet exploiting the failed breakout Monday suggested the gap back to Thursday’s close would be filled before another downdraft could be credible. Tuesday’s gap up didn’t extend, and only ranged narrowly sideways.
Gold Aug Contract (GC, ETF: (GLD))
Reversing back down after Tuesday to fulfill the 1329.00-1332.00 target area cannot be relied upon to recover, since Tuesday filled the gap back up to Friday’s close. Having neutralized its attraction above through the close, a break lower can extend down.
Silver Sep Contract (SI, ETF: (SLV))
Firming at Tuesday’s open helped to confirm Monday’s touch of the 18.75-18.85 target area’s upper-end was relevant. Firming only slightly at Tuesday’s open suggested the target area’s lower-end would be tested, too.
30-year Treasury Sep Contract (US, ETF: (TLT))
Pulling back overnight to 171-22 before opening back at the 172-16 buy signal made its breakout more credible. Its attempt attacked 173-04 resistance before dipping back down to 172-16 as support. Closing back under 171-22 would put into play fresh lows.
Crude Oil Oct Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Extending down overnight increased the potential for a second consecutive lower close Tuesday, which would confirm Monday’s break back under 47.45 had reversed momentum down. Headlines triggered a surge back up to 48.00 resistance — not necessarily confirming Monday’s break, but not rejecting it, either.
Natural Gas Sep Contract (NG, ETF: (UNG, UNL))
Monday’s unlikely gap up to retest 2.70 resistance was followed the less likely extension higher overnight. Trending up Tuesday tested 2.75, which puts into play filling the gap back up to 2.98 — assuming no reversal down Wednesday.
Mid-day Update… And a special note.
SPECIAL NOTE: I will be away from the screens on the afternoons of both Thursday and Friday, this week and next, Thank you for allowing me to be of personal assistance in a family matter.
Despite the open having neutralized all “unfinished business above” up to 2181.50, the balance of the morning barely reacted down to 2187.50. Slow and steady drifting through the noon hour extended to attack this morning’s 2185.00 bias-down signal as support.
Probing fresh highs could be done without turning aggressive, and simply drifting slowly and steadily back up. The next higher attractions at 2195.50 and 2202.50 would be in-play above 2190.25.
Meanwhile, support down to 2184.00-2185.00 isn’t so much an inflection point, as it is a likely spot for selling to accelerate. A credible drop will need to be aggressive if it is valid.
Look ahead: Economic Calendar – for Wed Aug 24, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: The density of Housing sector reports comes to a crescendo with Wednesday’s three separate looks at different aspects of the industry. But their price influence is limited to contradictions among the data, or to confirming any outliers.
MBA Mortgage Applications
7:00 AM ET
FHFA House Price Index
9:00 AM ET
PMI Manufacturing Index Flash
9:45 AM ET
Existing Home Sales
10:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
2-Yr FRN Note Auction
11:30 AM ET
5-Yr Note Auction
1:00 PM ET