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))
Wednesday’s positive divergence in RSI at the morning’s blip-down has produced a bounce Thursday up to “higher prior lows” testing 1.1205 bounce limit. Its reaction down retested Wednesday’s 1.1177 opening gap so that closing back above 1.1205 would now be credible for launching a rally that avoids extending the trend to fresh lows.
Gold Jun Contract (GC, ETF: (GLD))
Holding the 1223.00 target Wednesday avoided new lower target, but still requires one more fresh low close before recovery would be credible.
Silver Jul Contract (SI, ETF: (SLV))
Gapped up Thursday to its 16.50 anchor as the outperformance vs. Gold continues, while awaiting Gold to bottom.
30-year Treasury Jun Contract (US, ETF: (TLT))
Thursday’s low held a retest of the 163-16/163-22 pullback limit and bounced again to not only attack the 164-17 buy signal, but also to at least pierce it.
Crude Oil Jul Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Reacting down Thursday after fulfilling the 49.95 bounce target overnight probed under the 49.55 pullback limit, but avoided the 49.00 sell signal, maintaining potential for a bigger bounce targeting 51.45 before capitulating.
Natural Gas Jul Contract (NG, ETF: (UNG, UNL))
Outperformance vs. Jun continued Thursday, as the morning’s dip held Wednesday’s 2.13 lows. Closing above 2.18 and 2.24 would launch a durable rally leg.
Mid-day Update… Getting closer.
Shallow pullback’s expiration approaching.
Today’s likelihood for a shallow pullback has been validated, so far. There’s still room for a slightly lower intraday low down to 2080.50, but it’s not necessary. This afternoon’s 2084.25 bias-down signal was attacked to within 3 ticks before triggering no-bias.
No-bias makes price action likely to be contained between its bias signals. Trending beyond either signal is unlikely. But “trending” from one signal to the other is possible. It may even be likely — especially if the shallow pullback intends to resolve today.
I would prefer buying another attack on session lows, if that opportunity presents itself. Otherwise, firming back toward session highs would become well-positioned to break higher when the bias environment begins lapsing less than an hour from now.
Breaking under 2084.25 would extend the delay into a detour, probably targeting 10 points lower. Ultimately, that would still likely be bullish, stretching the rubber band to snap back up into the three-day weekend.
Look ahead: Economic Calendar – for Fri May 27, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s DGP has no track record for influencing price action. The post-open Consumer Sentiment’s influence has really waned recently. But Fed Chair Yellen’s impact is reliable, while the noon hour’s Rig count is influential only momentarily.
GDP
8:30 AM ET
Corporate Profits
8:30 AM ET
Consumer Sentiment
10:00 AM ET
*Baker-Hughes Rig Count
1:00 PM ET
*Janet Yellen Speaks
1:15 PM ET
Afternoon Bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2093.25 | 2090.75 |
| …would target | 2097.75 | 2095.50 |
| Bias-down: under | 2086.50 | 2084.25 |
| …would target | 2081.75 | 2079.25 |
| 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… More errands?
Neither bias signal even touched.
Yesterday afternoon and overnight action ranged narrowly, no matter how choppily. So, there’s no actual pattern that reflects buying and selling pressure, or a trigger to unleash it, and a target that satisfies it. Execution is based only on retracement calculations and extensions. All guided within the context of bigger picture influences gleaned from price action through yesterday’s close.
That context is the likelihood for today would likely be about backing-and-filling. The confirmed breakout has entrenched the rally, so that it can afford to rest while weak-handed sellers trap themselves. The rally didn’t gain traction yesterday afternoon, so extending higher this morning was unlikely, or likely to fail.
Unfinished business above at 2094.75 could have coaxed price higher to fail later. Opening strength limited that to piercing overnight highs by 1 tick at 2091.75, also an attack on yesterday morning’s high to within 1 tick.
The reaction down to 2084.75 is reacting up 4 points. Another point is possible while remaining well within the range. Back under 2086.50 would signal fresh lows, having room down to this morning’s 2080.50 bias-down signal.
It’s probably a dry cleaners morning, but not necessarily a dry cleaners afternoon — a Fed speaker is scheduled during the noon hour. Without pulling back more deeply first, resuming the rally during the final hour might require the rubber band effect of a violent momentary blip-down.