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 gap up had quickly paused and consolidated at 1.1180 support. Closing any lower would signal the bounce had ended, and Thursday’s gap down under it extended lower intraday. Closing also under 1.1105 would confirm a new downleg underway.
Gold Aug Contract (GC, ETF: (GLD))
Thursday’s weakness only touched Tuesday’s low, but rejected the open’s gap up, which is in-line with Wednesday’s gap up being only temporary. A retest of Tuesday’s low would enable a durable recovery to form.
Silver Sep Contract (SI, ETF: (SLV))
Thursday’s probe under Wednesday’s low testing 20.05 support need only close lower on Friday to confirm at least an attack on the week’s lows — not necessarily back down to the actual 19.60 low — before beginning a durable recovery.
30-year Treasury Sep Contract (US, ETF: (TLT))
Closing Wednesday simultaneously above both 172-26 and 173-04 buy signals didn’t prevent Thursday’s slight gap down from extending sharply lower intraday. The recent recovery was retraced precisely 61.8% to 171-25, which at least avoids reversing momentum down. Almost any initial strength Friday would be likely to extend higher intraday, and vulnerable to extending to fresh highs for the week.
Crude Oil Sep Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Initially extending down Thursday morning to a fresh pullback low was reversed well before noon back up to probe the 43.35 bounce limit by 50 cents. Its test had launched the first reaction down, so closing above it at least once is required to suggest its reaction down has ended.
Natural Gas Sep Contract (NG, ETF: (UNG, UNL))
Greeting Thursday’s EIA report from a position of weakness had made an initially favorable knee-jerk reaction up likely to fail. An initially negative knee-jerk reaction down to 2.53 was recovered into positive territory up to 2.60, but it was retraced back down to 2.53. RSIs diverged positively, so bottoming action would be credible.
Mid-day Update… Climbing gingerly.
Fresh highs consolidating narrowly.
This morning’s late bias-up signal triggered at 2176.75 and extended higher relentlessly until within 2 ticks of its 2182.25 bias-up target. Consolidating until the bias environment began lapsing was resolved up to another fresh high at 2184.25.
That’s still under the 2185.50 “unfinished business above.” Two hours of a narrow 2-point range since then hasn’t extended the rally. But neither has it been rejected.
I probably won’t have any sell signal ready to exploit potential downside. At this time, it looks like that would be only temporary, before recovering to a fresh high.
Look ahead: Economic Calendar – for Fri Aug 12, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s econ calendar is busy for any day, let alone for this week of almost no influential or high-profile reports. Any discernible reaction to the two pre-open reports — if there is one — would likely repeat in reaction to the post-open reports.
*Retail Sales
8:30 AM ET
*PPI-FD
8:30 AM ET
Business Inventories
10:00 AM ET
*Consumer Sentiment
10:00 AM ET
*Baker-Hughes Rig Count
1:00 PM ET
Afternoon Bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2189.25 | 2185.50 |
| …would target | 2195.50 | 2192.00 |
| Bias-down: under | 2182.00 | 2178.50 |
| …would target | 2176.25 | 2172.50 |
| 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… No (more) excuses.
Post-open dip is fully reversed.
Yesterday’s buyers didn’t gain traction. So, the only credible morning rally above yesterday’s highs must begin by the open maintaining a gap up above yesterday’s highs.
Which today’s open did. The 2179.00 overnight high was maintained through the entire opening 15 minutes of volatility. Maintained, not extended.
That’s an anchor, not momentum. It doesn’t prevent a detour from extending the gap. It certainly didn’t prevent this morning’s detour back down to 2175.00. The 2176.75 bias-up signal was touched in time to invoke the grace period, and recovered in time to trigger late bias-up.
There’s no bullish reason to delay probing new highs. Not when combining that last bit of “ineffectual pessimism” with anchoring the open’s gap up — all within a couple of points of intraday highs. In fact, now 2182.00 is being tested.
The 2182.25 bias-up target is essentially met. Unfinished business above at 2185.50 remains outstanding. A very magnetic range below lies in wait.