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))
Despite Thursday’s gap down having held the 1.1315 pullback limit, lower lows were probed Friday morning, extending down to 1.1245. Avoiding a second consecutive lower confirming close Monday would maintain the likelihood for retesting Wednesday’s highs.
Gold Aug Contract (GC, ETF: (GLD))
Friday morning’s rally filled the last outstanding gap at 1277.00 up to 1281.00, still needing to hold 1268.50 to maintain momentum next having potential up to 1312.00.
Silver Jul Contract (SI, ETF: (SLV))
Extending higher Friday morning to attack 17.40 kept in-play potential for the next higher objective at 17.60.
30-year Treasury Sep Contract (US, ETF: (TLT))
Falling stocks generated a flight-to-safety that pushed through 168-00 to gap up Friday and probe higher highs. An intraday dip held 168-00 as support to maintain the uptrend’s momentum.
Crude Oil Jul Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Probing the 50.15 sell signal overnight extended down Friday morning, testing the original 49.00 sell signal by the afternoon. Its break, too, would help to confirm the capitulative stage has arrived, so long as 50.15 isn’t recovered.
Natural Gas Jul Contract (NG, ETF: (UNG, UNL))
Thursday’s powerful knee-jerk reaction up on the EIA report didn’t extend any higher Friday. But its pullback was shallow, with room down to 2.51 or 2.47 to help refuel the rally.
Mid-day Update… TBIF.
Fewer chances to avoid capitulation, this being a Friday.
Potential for bouncing back up to 2093.50 bias-down target was fulfilled. Its test originated from the re-test of of this morning’s 2086.50 renewed bias-down target.
As described during the pre-market Tour, the most bearish template would do its best portray stability, if not a bottom.
But being a bias-down environment, and so long as the bias-down target wasn’t recovered, that would be sponsored only by weak-handed buyers.
Also described during the Tour was the likelihood for an afternoon capitulation. (Not necessarily collapse, although that would be the next degree.) The noon hour has probed fresh session lows down to 2085.50, which invalidates the interim bounce. But that has created the basis for a Lunch Hour Reversal setup.
The Lunch Hour Reversal setup enters the noon hour of a down day above the open’s lows, and then isolates a fresh session low to the noon hour to suggest that its sellers are weak-handed.
Today’s noon hour was entered at 2091.00. So, the setup would complete by exiting the noon hour back above 2091.00. The balance of the afternoon need not get back on the chairlift, but simply get off the downhill slopes. Get a hot chocolate. Enjoy the view.
The noon hour’s low has reacted up 4 points. That’s still a couple of points short of 2091.00. Just recovering this afternoon’s 2088.00 bias-down signal in time to avoid triggering it would not qualify for the setup. Late afternoon would still be vulnerable to capitulating. Otherwise, the bounce could extend up to 2098.00.
Look ahead: Economic Calendar – for Mon Jun 13, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: No influential or high-profile reports are scheduled for Monday. It gets busy after this.
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET
Afternoon Bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2108.00 | 2097.75 |
| …would target | 2112.25 | 2102.25 |
| Bias-down: under | 2098.00 | 2088.00 |
| …would target | 2092.50 | 2082.25 |
| Signal status: noN-BIAS, TESTED BIAS-DOWN 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… Reinforcements have arrived.
Opening uptick meets post-open slide.
Intraday action hasn’t been very remarkable, at least not in terms of point-range. But the structure is very revealing.
Gapping down immediately bounced as was suspected. And as expected, that was only temporary before reversing down to fresh lows. Although not yet put into play by the bias timing window, the 2086.50 renewed bias-down target was touched.
RSIs diverged positively on the retest of 2086.50, and a subsequent retest has launched a bigger bounce to new intraday highs testing the 2093.25 bias-down target as resistance.
Hope springs eternal, that’s how sellers are refueled in a persistent downtrend.
This being a Friday, the morning’s bias signal should persist through the noon hour. Bouncing much during a bias-down environment could find buying pressure depleted just when it would have had more impact, entering the afternoon.
Anxiousness into two days of illiquidity probably exacerbated the open’s selling pressures. Holding a test of the 2086.50 renewed bias-down target indicated that selling pressure was satisfied. A big bounce will bring those two days come back into focus.