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 rejection of Tuesday’s false breakout extended lower overnight to have already printed 1.11133 before Thursday’s open. The reversal remains intact so long as bounces now hold a test of .
Gold Aug Contract (GC, ETF: (GLD))
Extending Wednesday’s pullback overnight was already recovered enough on the BOE move for Thursday’s open to gap up. A fresh high testing 1375.50 remains likely, and also remains likely to hold.
Silver Sep Contract (SI, ETF: (SLV))
Sharply lower lows overnight attacked 20.05 before back to unchanged on Thursday morning’s BOE report. Closing above 20.55. would signal the rally to test 21.15 had resumed.
30-year Treasury Sep Contract (US, ETF: (TLT))
Flat-to-lower ranging overnight at or under 171-22 responded bullishly to Thursday morning’s policy statement, probing intraday well above the 172-26/173-04 buy signal — and retesting 172-26 as support. A second consecutive higher close Friday would confirm at least a test of 176-10 is in-play.
Crude Oil Sep Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Thursday’s bounce exceeded Tuesday’s test of the 40.80 bounce limit, filling a recent outstanding gap at 41.55 and then probing its prior high above 42.00. Closing back under 40.65 would resume the decline.
Natural Gas Sep Contract (NG, ETF: (UNG, UNL))
Thursday’s EIA report was greeted from a position of strength, which managed only to soften any knee-jerk reaction while ranging choppily sideways. Almost any initial rally Friday would be credible for extending higher into the weekend.
Mid-day Update… Big news coming, tomorrow.
Earlier optimism wasn’t very contagious.
The opening 15 minutes of volatility had trended up to 2162.00, maintaining a gap up above yesterday’s highs. That enabled trending higher today before the last 60-90 minutes. But trending higher wasn’t required.
A drop back down to 2154.00 had put into play a test of 2150.50. It could have been invalidated back above 2159.00 by 10:30, or above 2162.00 by 11:30-noon. Neither condition was met, so the test of 2150.50 becomes “unfinished business below” that requires being retested eventually — probably along the way to retesting Tuesday morning’s oversold RSIs at 2141.50.
Meanwhile, the noon hour briefly touched 2163.50 before dipping back down to 2158.00. Neither of the 2157.50-2165.25 bias signals was touched, so this is a no-bias environment. Trending beyond either signal could resume as the bias environment begins lapsing would be free to trend.
Thursday afternoons prior to Friday morning’s Employment Situation report can become paralyzed by anxiousness.That may define this afternoon’s price action. But back above 2161.25 and 2164.00 would be vulnerable to trend higher.
Look ahead: Economic Calendar – for Fri Aug 5, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s Employment Situation report is essentially being released in a vacuum, with no other high-profile or influential report near it. The afternoon’s rig count is reliable for influencing Crude Oil, which in turn tends to impact the market momentarily.
*Employment Situation
8:30 AM ET
International Trade
8:30 AM ET
*Baker-Hughes Rig Count
1:00 PM ET
Consumer Credit
3:00 PM ET
Treasury STRIPS
3:00 PM ET
Afternoon Bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2170.50 | 2165.25 |
| …would target | 2175.50 | 2170.50 |
| Bias-down: under | 2162.50 | 2157.50 |
| …would target | 2156.50 | 2151.25 |
| 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… Gap up absorbed.
Opening gains fail to hold.
The 2158.75 opening print as above yesterday’s high. That’s a gap up. The opening 15 minutes of volatility extended higher to 2162.00, trending in a series of higher highs and higher lows. That’s a gap up, maintained.
Yesterday’s rally couldn’t extend this morning otherwise, not since its buyers had failed to gain traction. So, maintaining a gap up allows the rally to resume this morning. But it’s not required.
The open’s 2161.00 inflection point was probed no higher than its first 4 minutes before reversing more than 2 points back down. That wasn’t required to extend down, but it did. And the 2159.00 bias-up signal failed to trigger.
An offsetting test of the 2150.50 bias-down signal is now in-play. Its test would likely give way to also retest Tuesday’s 2141.50 low. The post-open dip has tested 2154.00.
That 10:15 signal could have been invalidated by recovering the 2159.00 bias-up signal at 10:30. It wasn’t. Invalidation is still possible at 11:30, but then by recovering the bias-up signal’s test up to 2162.00.
Meanwhile,a bounce is now retesting the 2159.00 bias-up signal. Back under 2157.50 would signal the next downleg underway. Any higher could lead to invalidating the downside attractions.