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 Jun Contract (EC, ETF: (FXE, UUP))
Having held its test Thursday of the 1.1205 bounce limit, Friday’s dip back to the lows can now form a bottom if held, which would be signaled by probing again back above 1.1205. Not immediately rejecting the low’s retest would resume the decline without delay, next targeting 1.1055.
Gold Jun Contract (GC, ETF: (GLD))
Friday’s new lows down to 1209.50 only recovered to 1213.50 which fulfilled the eventual lower close required by the week’s earlier confirmed breakout. A second consecutive lower close Monday would put into play 1190.00. Otherwise, the pattern is now free to form a bottom, so long as not initiated by gapping up.
Silver Jul Contract (SI, ETF: (SLV))
Dropping Friday to the range’s ~16.25 lower-end is still in the orbit of 16.50 which keeps alive the bottoming potential.
30-year Treasury Jun Contract (US, ETF: (TLT))
Thursday’s narrow overlapping of the 164-17 buy signal didn’t resolve up Friday, as price dipped back in the range toward the 163-16/163-22 pullback limit that has been thoroughly tested already.
Crude Oil Jul Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Gapping down Friday under the 49.00 sell signal bounced to test the 49.55 pullback limit that Thursday’s close was still testing. If momentum is reversing down, it’s not very decisive. But the burden of proof is on the rally to resume, or else capitulation by a new downleg should be obvious within hours..
Natural Gas Jul Contract (NG, ETF: (UNG, UNL))
Friday’s continued testing of the 2.18 buy signal didn’t resolve, requiring 2.24 to be recovered before having any confidence in a new upleg underway.
Mid-day Update… Worth the wait?
Yellen about to appear.
This morning’s action adhered to the expected template. The immediately actionable parameter and subsequent
signals have led to fresh highs.
Consequently, the template’s elements are moot, and so is the template.
- There only being an attraction above at 2094.75 had prohibited sell signals. Testing it up to 2095.50 has neutralized its attraction.
- The bias environment has lapsed, and its likelihood for narrow ranging is no longer influential.
- A surge to fresh highs immediately exploited the morning’s noN-bias environment lapsing. This injects a new degree of optimism ahead of Yellen.
Assuming current levels are maintained, Yellen is being greeted from a position of strength. This suggests some probe of higher highs, at some point — either a durable uptrend into the close, a momentary knee-jerk reaction up that resolves down, or a knee-jerk reaction down that resolves up.
Not likely is a knee-jerk reaction down that simply extends lower. At least, not likely without further optimism expressed ahead of the event, like already testing the 2099.00 area.
Look ahead: Economic Calendar – for Mon May 30, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: It’s Memorial Day in the US. Globex opens normally at 6:00pm ET Sunday night, and closes at 1:15pm ET Monday afternoon.
Markets Closed
Afternoon Bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2097.00 | 2094.75 |
| …would target | 2102.00 | 2099.75 |
| Bias-down: under | 2092.50 | 2090.25 |
| …would target | 2087.75 | 2085.50 |
| Signal status: NO-BIAS, TESTED BIAS-UP SIGANL | 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… Eking it out.
Trending up since the open.
The pre-open dip to 2089.00 was essentially a 61.8% projection from the overnight high’s retest of 2092.50. That natural support, along with there being no active attraction below, at least made the level vulnerable to fading back up.
Opening action soon attacked the overnight highs, and eventually pierced and probed its way higher. Attacking “unfinished business above” at 2094.75 to within 3 ticks reacted down instantly to 2091.00, and then bounced right back up.
This morning’s 2093.75 bias-up signal invoked the grace period at 10:15, and still overlapping it at 10:30 triggered noN-bias. Not a bias-up targeting 2098.50. Not a no-bias targeting an offsetting test of the bias-down signal below. Price can trend up or down, or range sideways.
Probably, price will range sideways, or flat-to-higher. Volume is shrinking ahead of the three-day weekend, and paralysis is growing ahead of Yellen’s afternoon appearance. Greeting the latter from up here would remain vulnerable to at least a knee-jerk reaction up.
It’s premature to forecast whether a knee-jerk reaction up would extend or reverse down sharply. But greeting the event from back under the 2089.75 open would likely react down.