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))
The week’s rejection of Monday’s false break higher was extended down sharply Friday morning to 1.1065. Its reaction up to test 1.1120 still held negative territory, suggesting that any near-term bounce would fail.
Gold Aug Contract (GC, ETF: (GLD))
Reacting down sharply lower on Friday’s payrolls report once again avoided the 1375.50 target, and probed under Wednesday night’s test of the 1355.50 support by $10. Closing above 1353.00 would resume the rally, at least to test 1375.50. But closing any lower Monday would suggest the 1375.50 target won’t be tested before developing a more substantial decline.
Silver Sep Contract (SI, ETF: (SLV))
Gapping down sharply Friday in reaction to Friday’s payrolls fell to 19.75. Resuming the rally requires closing above 20.20. No deeper backing-and-filling would be required first, but bottoming here should start recovering no later than Tuesday morning would.
30-year Treasury Sep Contract (US, ETF: (TLT))
Friday’s reaction down to payrolls filled the gap back down to Wednesday’s close and dipped a little deeper to also test 171-22 by several ticks. Assuming this is the range’s lower-end, then Monday should not delay rallying back up to or toward 172-26/173-04 where a new upleg can still trigger.
Crude Oil Sep Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Friday’s weakness barely attacked the 40.65-40.80 sell signal, let alone touch it. The decline is not required to resume immediately, but any higher highs intraday should be retraced into the close.
Natural Gas Sep Contract (NG, ETF: (UNG, UNL))
Gapping down Friday to 2.80 and extending lower to retest 2.77 support must still hold to keep alive the same recovery pattern that was trying to form earlier this week. Closing above 2.85 would signal the rally to fresh highs underway.
Mid-day Update… Dead head-fake?
Shallow range at the highs.
Sunday’s 2177.75 Globex trend extreme was touched during the noon hour, along with this afternoon’s 2178.00 bias-up signal. Both held.
The trend extreme is likely to be tested more substantially than by piercing it only by 1 tick. Probing above it, and above the bias-up signal during a no-bias environment, would be vulnerable to reversing back down.
Vulnerable to reversing back down, but that reversal must be obvious as the afternoon bias environment begins lapsing at 2:30. NEVER underestimate the prevailing trend’s persistence of Friday trending, especially when counter-trending isn’t already taking control during the afternoon.
But exiting the bias environment back under the 2174..25 area could melt down into the close. Trending is difficult to reverse on Friday afternoons. Counter-trending is difficult to stop then, too.
Look ahead: Economic Calendar – for Mon Aug 8, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Monday’s econ calendar is essentially bare. The week gets a little busier, but nothing on the order of payrolls or FOMC events.
Labor Market Conditions Index
10:00 AM ET
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET
TD Ameritrade IMX
12:30 PM ET
Afternoon Bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2182.75 | 2178.00 |
| …would target | 2188.50 | 2184.00 |
| Bias-down: under | 2174.50 | 2170.00 |
| …would target | 2167.75 | 2163.00 |
| Signal status: NO-BIAS, TESTED BIAS-UP 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… They seem good with it.
Perfect storm extends pre-open surge.
The Employment Situation report reaction had essentially spiked up 6 points to 2168.00 resistance. So long as that wasn’t rejected, just standing still would mean the market had discounted a 
growing likelihood for a rate hike.And that comfort level would become uncomfortable, as the market would scramble to buy.
Greeting the open at 2168.00 touched a pullback limit at 2166.50 before quickly recovering to fresh highs. The market is a quick learner. The quick recovery became a substantial recovery, testing the 2171.25 bias-up target and then probing it to test 2175.50.
So, now what? Does the market continue its realization that a rate hike is priced in, and continue rallying into the afternoon? Probably something like that. NEVER underestimate the influence of weekend illiquidity getting exponentially closer with each passing minute. Counter-trend sponsorship is difficult to generate before so near the weekend.
Sunday night’s “new Globex trend extreme” at 2177.75 requires an intraday retest. Being in its orbit, probing above all prior intraday highs, its test is likely before any durable reaction down.
Retesting Sunday night’s high before entering the afternoon bias environment would be vulnerable to reversing down into the weekend. Counter-trend sponsorship is difficult to generate before so near the weekend. It’s also difficult to stop once generated, if the trend’s objective is already met.