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))
Spiking up Friday to a fresh high was ambitious, especially after Thursday’s open and close each had broken under the 1.1175 pullback limit to end upside momentum. Indeed, the spike up was soon being retraced. Closing back under 1.1175 could now serve as a sell signal, initially targeting 1.1105.
Gold Aug Contract (GC, ETF: (GLD))
Spiking up $17 Friday morning had originated from an inappropriate spot. Despite probing a fresh high, it was likely to fail. Not necessarily the same day, although it did, consolidating at 1357.00 until an $18 plunge tested 1338.50. The 1332.00 objective remains in-play.
Silver Sep Contract (SI, ETF: (SLV))
Friday’s spike up was premature for the recovery that still targets a retest of the 21.15 post-Brexit high. Its reaction down intraday was sudden, steep and substantial, probing under almost all prior lows down to 19.69, and stopping optimistically short of yet filling the gap back to Tuesday’s opening gap down.
30-year Treasury Sep Contract (US, ETF: (TLT))
Thursday’s 61.8% retracement of the last upleg was proved to be only a correction by gapping up and extending to a fresh high at 173-30. Its reaction down tested support at what had been the 173-04 and 172-26 buy signals triggered by the last upleg. Closing above at least one would keep alive the recovery’s momentum.
Crude Oil Sep Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Thursday’s rally back up to the 43.35 bounce limit was still overlapping it at the close. Friday barely delayed extending higher, although not aggressively. Recovering it through the close would suggest the decline had ended for awhile, subject to confirmation from a second consecutive higher close. Otherwise, back under pivotal uptrending support that now coincides around 42.50 would target new lows.
Natural Gas Sep Contract (NG, ETF: (UNG, UNL))
Gapping up Friday within Thursday’s range doesn’t require filling the gap back to Thursday’s close. Fluctuating around Thursday’s high up to 2.62 doesn’t require extending higher. But almost any early strength Monday would be credible for extending higher intraday.
Mid-day Update… The weekend cuts either way.
Impending illiqiudity can be a call to action.
Gapping down to touch 2176.75 was retraced to its 2183.00 target. The gaps back to yesterday’s closes were filled, and price immediately began reversing back down. Most of the bounce was returned already when the noon hour ended.
Then a strong rig count sent price to fresh lows at 2175.50. This afternoon’s 2176.00 bias-down signal magically reached out and stopped the slide short of 5 points. Its bounce has been shallow, but enough not to trigger bias-down.
The bias environment lapsing will see existing sponsorship lose interest, and offer a window for new sponsorship to take control. Two days of impending illiquidity can force moments of clarity. Nothing requires the pattern to change from defending against a decline to promoting it, but breaking under 2176.00 would suggest that’s happening anyway — and in a very big way.
Look ahead: Economic Calendar – for Mon Aug 15, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Monday’s reports are high-profile, but neither has a reliable track record for influencing price action.
Empire State Mfg Survey
8:30 AM ET
Housing Market Index
10:00 AM ET
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET
Treasury International Capital
4:00 PM ET
Afternoon Bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2187.25 | 2184.00 |
| …would target | 2192.50 | 2189.50 |
| Bias-down: under | 2179.00 | 2176.00 |
| …would target | 2174.00 | 2170.75 |
| Signal status: NO-BIAS | 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.
Gap down not extending. Not ,yet.
The pre-open PPI reaction gapped down to the same 2178.00-2179.00 open of the prior two sessions. They had found sponsorship through the morning. Not today. The first minute blipped-down to 2176.75 and then bounced back up.
Actually, “bounced back up” exaggerates things. Price has firmed choppily back up to 2181.00, still overlapping the open. So, the gap down may not have extended deeper, but it also isn’t being rejected.
Choppiness aside, the pattern should creep higher to 2183.00. That would overlap yesterday’s cash session close by several ticks. The pattern’s next leg should be much cleaner trending — if not reversing to resume and extend the gap down as is likelier, then potentially drifting higher into the close.