Posts by Rod David
Pre-close View… Warning shot.
Bias environment’s rally trying to textend.
An offsetting test of this morning’s 2070.75 bias-down signal was put into play by holding a test of the 2080.50 bias-up signal. This morning’s 2074.00 low didn’t satisfy it, so the objective becomes “unfinished business below” and requiring an eventual retest.
Meanwhile, this afternoon’s no-bias environment bounced from its early 2076.25 low up to 2082.75. And then surged to within 1 tick of the 2086.00 overnight high. The test of 2070.75 is going to be delayed.
Stopping pessimistically short of the overnight 2086.00 high is potentially bullish from a contrarian perspective. It suggests that any reaction down is counter-trend, and will be recovered by higher highs. The bigger picture already suggests that probing the overnight high is likely also to probe yesterday’s 2092.50 high.
The reaction down had room to retrace the bias environment range back down to 2080.00 as just a correction. Touching it has reacted up to 2084.00.
Regardless of the potential upside, back under 2081.00 would start to signal the unfinished business below at 2070.75 is back in-play.
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))
Sunday night’s high had filled the gap back to the prior Wednesday’s 1.1400 close, neutralizing its attraction. No second consecutive higher close Tuesday leaves the pattern without a near-term objective.
Gold Aug Contract (GC, ETF: (GLD))
Despite holding a retest of the 1281.00 pullback limit again Monday, trending down overnight gapped down Tuesday. Gapping back up Wednesday and extending through 1288.00 would be credible for extending back up to the “unfinished business above” at 1308.60.
Silver Jul Contract (SI, ETF: (SLV))
Gapping down Tuesday to the current range’s low probed slightly lower intraday, still likely to retest last week’s 17.80 gap up before a durable downleg could begin.
30-year Treasury Sep Contract (US, ETF: (TLT))
Monday’s gap down had not extended lower intraday, but it wasn’t rejected by gapping up Tuesday. Gapping up Wednesday above 169-00 would still be credible for resuming the rally to fresh highs targeting 171-22.
Crude Oil Jul Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Gapping down Tuesday from 50.00 stopped short of even touching the 48.25 sell signal, before recovering. Now back under 48.75 would be likely to extend down sharply intraday.
Natural Gas Jul Contract (NG, ETF: (UNG, UNL))
Fulfilling the 2.75 target Monday didn’t react down deeper than the 2.71 pullback limit. Tuesday probed higher highs up to 2.7, which isn’t high enough to raise the pullback limit. But now the pullback limit also functions as a reversal signal targeting 2.51 or lower.8
Mid-day Update… News junkie.
Brexit headlines lacking, Yellen testimony pausing.
The reaction down from last night’s 2086.00 high extended down to 2074.00 intraday. That retested the overnight low, barely, Reacting up to probe 2082.00 reacted down 6 points. Reacting up again to attack 2082.00 reacted down only 3 points.
The first probe was retraced back under this morning’s 2080.50 bias-up signal before the bias environment began lapsing. That was close. But an offsetting test of this morning’s 2070.75 bias-down signal has become “unfinished business below” that requires eventual test.
Rallying first would target no only the overnight highs, but yesterday morning’s 2092.50 high. Otherwise, this morning’s low is very unlikely to hold a retest.
Look ahead: Economic Calendar – for Wed Jun 22, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Several econ reports Wednesday morning offer snapshots of the housing sector. They don’t normally influence price action, but their potential for contradictions or for confirming surprises could have an impact. Regardless, the day’s highest-profile item is Fed Chair Yellen’s second of a two-day semi-annual congressional testimony. Often the market retraces any reaction to the first day’s remarks.
MBA Mortgage Applications
7:00 AM ET
FHFA House Price Index
9:00 AM ET
Existing Home Sales
10:00 AM ET
*Janet Yellen Speaks – House
10:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
2-Yr FRN Note Auction
11:30 AM ET
7-Yr Note Auction
1:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2082.25 | 2083.75 |
| …would target | 2097.75 | 2089.25 |
| Bias-down: under | 2083.25 | 2074.75 |
| …would target | 2077.50 | 2069.00 |
| 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.