Posts by Rod David
Post-market Wrap (recording & summary)
The open’s 5-point surge to 2168.00 had reacted down 4 points before the morning’s 10-point plunge to 2154.00. Bouncing into the noon hour retraced the plunge, but only the plunge, before an afternoon drop to 2156.00. That was also recovered to 2164.00.
Only to 2164.00. Even that reacted down into the close, which was fluctuating around unchanged. Tuesday ends without momentum, and without traction, despite its 14-point range — which one leg traveled in 90 minutes.
The proximity to fresh highs is further than the prior two closes. Only a little, after plenty of selling pressure had tried breaking lower, with plenty of time to get it done. I can’t get fresh highs (2171.25, 2175.50) off my radar, not without gapping down under Tuesday afternoon’s 2156.00 low, which isn’t likely ahead of Wednesday’s FOMC policy statement.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
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))
Monday’s inside day was upward biased, which tends to resolve bearishly. Tuesday’s range was even narrower, so closing under Friday’s 1.0987 close is required to signal the decline has resumed.
Gold Aug Contract (GC, ETF: (GLD))
Monday’s recovery from fresh lows to almost fill the gap back up to Friday’s close was extended overnight, but a close above 1325.00 is still needed to signal another recovery attempt underway.
Silver Sep Contract (SI, ETF: (SLV))
Tuesday’s narrow ranging did not yet recover the 18.75-18.85 buy signals to resume the recovery attempt.
30-year Treasury Sep Contract (US, ETF: (TLT))
Another overnight probe well above the 171-22 buy signal was returned before Tuesday’s open, and a post-open attempt to rally was retraced to fluctuate around unchanged into the afternoon. Wednesday afternoon’s FOMC policy statement is not being greeted from weakness, but already triggering the buy signal would have been a position of strength.
Crude Oil Sep Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Fresh lows attacked 42.35 overnight and recovered at least to range narrowly Tuesday around 42.80. Wednesday’s EIA report is not being greeted from a position of strength, but closing back above 43.80 would start to suggest this downleg is ending.
Natural Gas Sep Contract (NG, ETF: (UNG, UNL))
Gapping down Tuesday touched last week’s “lower prior highs” down to 2.68 before bouncing to fill the gap back up to Monday’s 2.75 close. The 2.80 buy signal must still be recovered thorough the close to signal a recovery effort underway.
Mid-day Update… Needed: One scapegoat.
Morning’s plunge has no direct cause.
This morning;s 2166.00 bias-up signal did not trigger. Not for lack of trying, having been probed by 2 points. But holding its test put into play an offsetting test of the 2155.75 bias-down signal.
Invalidating the no bias at 10:30 wouldn’t have surprised me, with upside attractions being so near. But the market knows better. 
A sell signal triggered under 2164.25, the bottom dropped out, and a 30-minute 10-point plunge was suddenly probing 2 points under yesterday’s low down to 2153.75.
The noon hour retraced the entire plunge back up to 2164.00. But only retraced it. It wasn’t reversed or rejected. So, no-bias has triggered, despite probing 2 points above the 2161.75 bias-up signal. Again.
This afternoon’s 2153.25 bias-down signal doesn’t require being tested. But it probably will be tested, while retesting this morning’s 2153.75 low. That’s required because it was accompanied by simultaneously oversold 1-mijnute and 3-minute RSIs.
This morning’s brief test of 2156.00-2158.00 could have been dismissed. It happened during a no-bias environment and it was recovered by noon. This afternoon’s test of 2156.00-2158.00 could also be dismissed for similar reasons. But the burden of proof is on there being a forcible recovery coming out of the bias environment.
One problem for a recovery is the lack of a scapegoat for this morning’s plunge. There are plenty of candidates, but no specific catalyst. Even the worst news item can be discounted — however deeply, and forever how long it might take — and then the market can get back to business.
That’s difficult when lacking a scapegoat. So, be careful with longs until a prior high is recovered.
Look ahead: Economic Calendar – for Wed Jul 27, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday’s calendar has two high-profile reports with reliable track records for influencing price action. The afternoon’s FOMC statement is one of the most reliable, and creates volatility through the following morning.
MBA Mortgage Applications
7:00 AM ET
*Durable Goods Orders
8:30 AM ET
Pending Home Sales Index
10:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
2-Yr FRN Note Auction
11:30 AM ET
*FOMC Meeting Announcement
2:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2167.25 | 2161.75 |
| …would target | 2172.50 | 2166.75 |
| Bias-down: under | 2159.00 | 2153.25 |
| …would target | 2153.50 | 2147.75 |
| 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.