Posts by Rod David
Post-market Wrap (recording & summary)
Last Monday gapped up and quickly extended to new highs, spending the entire session above prior highs. That was followed by gapping back down under prior highs, and resuming the ranging that had preceded Monday’s failed breakout.
This Monday is in stark contrast. It was an “inside day” relative to Friday’s range. Five trending efforts alternated between up and down, and that was before even entering the afternoon bias environment. I dismiss that later legs because of their smaller sizes.
Also, this Monday ended almost unchanged, compared to last Monday’s gain. Does that difference, or the others, mandate any different resolution this Tuesday? No, the range and its choppiness can persist. But trending through either end of the range remains likely eventually, and possible during any timing window.
No traction was gained by either sponsorship Monday, so trending Tuesday morning must begin by gapping beyond either end of Monday’s range. Oversold RSIs at Monday’s 2175.00 late-morning low require an eventual retest, which would likely extend down several points deeper to 2172.00. Breaking lower could be easily satisfied, or not. Breaking higher would target new highs.
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… Olympic homage.
Record-setting laps.
Imagine today’s market to be an Olympic swimming pool. Now imagine today’s price action to be an event, like the 400m Medley.
The session has swum laps from side to side — some turns taking a little longer than others, but pretty quickly during each lap. The chart’s legs appears as alternating surges and collapses.
Almost each leg is shorter than the last. They’re converging at the 2180.00 area as the 3:10-3:20 proxy window elapses. The 3:37-3:52 position-squaring window follows closely behind it, and although no trending then is required, it would be credible for extending.
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))
Friday’s gap down an narrowly ranging session didn’t accomplish anything other than what it prevented from being accomplished — Thursday’s breakout wasn’t confirmed. Monday’s price action essentially duplicated Friday’s, so reversing momentum back down isn’t yet assured.
Gold Aug Contract (GC, ETF: (GLD))
Friday’s wide ranging had held its bounce limit, so Monday’s gap down under Friday’s lows was capable of extending down. It only ranged narrowly sideways under Friday’s lows, remaining vulnerable to extending down to the 1329-1332 target.
Silver Sep Contract (SI, ETF: (SLV))
Gapping down sharply Friday had all but required extending down next to 18.75-18.85. Gapping down sharply Monday probed the target area’s upper-end, and also confirmed Friday’s breakout from a multi-session range, requiring at least an eventual third lower close.
30-year Treasury Sep Contract (US, ETF: (TLT))
Gapping up Monday wasn’t the optimal recovery path from Friday’s probe of fresh lows, despite that probe not gaining traction through the close. But not gaining traction through the close is what enabled an immediate recovery to be credible, at all. Quickly recovering 171-26 helped to extend higher to test the 172-16 buy signal, which had held its test through Monday’s noon hour.
Crude Oil Oct Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Rolling forward Monday from Sep to Oct, at a 60-cent premium, was accompanied by gapping down back into the 47.45-48.00 bounce target that had been probed into the weekend. Its lower end was attacked intraday, but must still be confirmed to consider the week-long rally as having ended.
Natural Gas Sep Contract (NG, ETF: (UNG, UNL))
Friday’s gap down under Thursday’s 2.61 low was a delayed reaction to not immediately rejecting the knee-jerk reaction to Thursday’s EIA report. The likely consequence was to fill the gap below down to 2.55 or lower. Closing back above Thursday’s 2.70 high could invalidate the downside, so it is interesting that Friday’s gap up into Thursday’s range touched 2.70. It’s recovery would still be bullish, but meanwhile the pattern remains likelier to produce fresh lows.
Mid-day Update… Tripping up.
Recovery’s surprise retracement ends surprisingly, too.
What spikes up, must spike down?
The morning’s bias environment trended up, in-line with the bullish WedEX influence. 
Holding a test of its 2176.00 bias-down signal put into play an offsetting test of its 2185.00 bias-up signal. It became “unfinished business above” that requires being tested.
That didn’t prevent a steep downdraft. The gap back up to Friday’s cash session close produced obligatory resistance. Its likely pullback to 2180.50 was touched as the bias environment came within view of lapsing. Suddenly, priced collapsed back down to 2175.00.
Overbought RSIs require a retest of 2175.00. Meanwhile, back above 2177.75 first would require probing a fresh session high. Not too surprisingly, the upside developed first, touching 2183.50. Surprisingly, it developed by surging more steeply than price had collapsed on the way down.
Don’t blink, you’ll miss it. A reaction down is attacking 2179.00, and any deeper would start to signal new session lows in-play. Avoiding that would maintain recovery potential to fresh highs — if not also back up to last Monday’s highs.
Look ahead: Economic Calendar – for Tue Aug 23, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Several Housing sector data are released throughout the week, beginning Tuesday. But other than Wednesday’s Housing data conflicting with Tuesday’s report, high-profile or influential reports are back-loaded to Thursday and Friday.
Redbook
8:55 AM ET
New Home Sales
10:00 AM ET
Richmond Fed Manufacturing Index
10:00 AM ET
4-Week Bill Auction
11:30 AM ET
2-Yr Note Auction
1:00 PM ET