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))
Wednesday’s late spike back up to Tuesday’s opening high extend higher Thursday morning, attacking 1.1375 resistance and qualifying as a breakout from a multi-session range. A second consecutive higher close would require a third eventual higher close, so a bearish scenario must reverse down sharply Friday.
Gold Aug Contract (GC, ETF: (GLD))
Reacting up after Wednesday’s close to FOMC Minutes had retested 1355.50 resistance. It was still being tested Thursday morning despite 1361.50 overnight. The attraction below to 1329.00-1332.00 isn’t invalidated, but being positioned closer to 1367.50 resistance makes its recovery easier..
Silver Sep Contract (SI, ETF: (SLV))
Shallow overnight strength still had not filled the gap back up to Tuesday’s close. No rally leg has been launched, but meanwhile all unfinished business below is neutralized.
30-year Treasury Sep Contract (US, ETF: (TLT))
Having recovered only to test 171-26 Wednesday, Thursday’s narrow ranging around it needed to close above 172-16 to suggest a recovery is underway. Not yet rallying out of Friday’s open would become substantially more vulnerable to resuming Tuesday’s decline.
Crude Oil Sep Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Fresh highs Thursday trended through the 46.80-47.60 bounce target and 40 cents above 48.00. This does not change whether an abrupt and aggressive reaction down is the appropriate path to starting a new downleg. But closing higher Friday would make the current rally likely to extend.
Natural Gas Sep Contract (NG, ETF: (UNG, UNL))
Greeting Thursday’s EIA report from a position of weakness wasn’t going to prevent an initially favorable knee-jerk reaction up. But that reaction would be likely to fail, yet it did not. The recent range’s 2.63 upper-end was probed up to 2.70. A second consecutive higher close Friday would confirm Thursday’s breakout. Meanwhile, back under 2.61 would target filling last week’s gap back down to 2.55.
Mid-day Update… More backing, less filling.
Failed rally instead of temporary dip.
Although opening strength up to 2181.25 did reverse down as expected, testing 2178.00 as support reacted up to fresh highs at 2184.25. That rally attempt was doomed to failure, since today’s open had not gapped up to overcome yesterday afternoon’s rally not gaining traction. Anyway, probing this morning’s 2182.50 bias-up signal after failing to trigger it was “no-bias trending,” also doomed to failure.
So far, that doom has been limited to retesting the open’s 2178.00 low as support.
Meanwhile, this afternoon’s 2178.50 bias-down signal has avoided triggering. It should define the next hour’s lower-end if retested, similar to this morning’s bias-up signal having defined the upper-end despite being probed by almost 2 points.
Yesterday afternoon’s rally doesn’t require extending higher today, even after the bias environment lapses. Backing-and-filling isn’t required to extend any lower, either. Limitation is the only requirement until the bias environments have lapsed.
Look ahead: Economic Calendar – for Fri Aug 19, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: No econ reports are scheduled Friday morning, a rarity for any day, even for expiration. But the noon hour ends with the weekly rig count, affecting Crude Oil which affects stocks momentarily..
Baker-Hughes Rig Count
1:00 PM ET
Afternoon Bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2186.75 | 2184.00 |
| …would target | 2192.00 | 2189.50 |
| Bias-down: under | 2181.00 | 2178.50 |
| …would target | 2176.25 | 2173.50 |
| Signal status: NO-BIAS, TESTED BIAS-DOWN SIGNAL | 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… Settling in.
Dry cleaners morning? Or, waiting for a shoe to drop.
Opening at 2179.00 surged to 2181.75. Its reaction down touched 2177.50 and bounced back up to 2181.75. A shallower dip recovered again to 2181.75.
That’s flat-to-higher from yesterday’s close. But it’s certainly not a gap up, so rallying this morning is unlikely.
Trying to rally is likely to fail.
Now this morning’s 2182.50 bias-up signal is being touched. This being a no-bias environment, probing any higher would likely fail. Backing-and-filling this morning was likely, anyway. It’s not required, but a pullback remains likelier than trending.