Posts by Rod David
Pre-close View… Optimism’s final lesson.
Has bias environment bounce expended its buying pressure?
Neither bias signal was touched before triggering no-bias. Probing above the 2033.75 bias-up signal to 2036.25 was borderline “no-bias trending.” Complexity that kept touching 2033.75. Regardless, 2033.75 has been retraced.
Nevertheless, the optimism is impressive. Impressive like the Black Knight‘s bravery in Monty Python and the Holy Grail. Well-meaning, but not successful.
The bias environment’s rally wasn’t a helpful time to be expending buying pressure. It fulfilled corrective bounce limits at 2033.00-2035.00, and the final hour hasn’t extended higher.
Trending up above the 2036.25 afternoon highs through the 3:10-3:20 would be bullish. All the more so, because it is unlikely, since the bias environment already tried and failed. Back under the 2032.00 area would target fresh session lows around 2018.00, presumably on the way to probing under 2000.00.
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 steep drop had fulfilled its minimum 1.1245 objective and also probed prior lows, but that didn’t prevent gapping down and extending lower. A second consecutive lower close Thursday creates the requirement for at least one more eventual lower close.
Gold Jun Contract (GC, ETF: (GLD))
Wednesday’s FOMC Minutes had triggered a break under the 1271.50 sell signal after close, and it extended lower overnight to attack the 1241.00 target to within $4 before bouncing. A lot of selling pressure was expended, but gapping down doesn’t gain much traction.
Silver Jul Contract (SI, ETF: (SLV))
The minimum 16.75 objective had been met after Wednesday’s close reacted to the FOMC Minutes, and extending down overnight probed the 16.50 target by 15 cents,
30-year Treasury Jun Contract (US, ETF: (TLT))
Wednesday’s deep drop had held a test of 163-07 support to allow a corrective bounce that tested the 164-17 buy signal as resistance. Its recovery would target 167-26.
Crude Oil Jun Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Dipping overnight to gap down Thursday tested the 47.25 sell signal, but it wasn’t likely to trigger since a top had not completed. Thursday morning’s bounce nearly filled the gap back to Wednesday’s 48.08 close.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Thursday’s EIA report wasn’t greeted from a position of strength. Recovering its knee-jerk reaction down to 1.95 back above Monday’s 2.02 low would be the minimum requirement to begin sealing a bottom — Thursday afternoon tested Tuesday’s 2.05 close. Signaling a rally would still require closing above 2.11 and 2.14..
Mid-day Update… Paralyzed.
Ranging around the next lower objective. And ranging.
Any post-open bounce this morning was likely to be only temporary, before resolving down to 2025.00-2027.00. The post-open bounce to 2039.50 had resolved won aggressively to fulfill the objective.
It was probed down to 2024.00, and later extended down to 2022.00. But that was well before the noon hour, and price action since then has only ranged choppily sideways.
The noon hour ignored an opportunity to bounce and to compartmentalize this morning’s decline. Resuming the decline could extend through the next lower objective in the 2018.00 area to probe under 2000.00.
A bounce to 2033.75-2035.00 is still possible. But nothing yet suggests that wouldn’t just refuel sellers again like this morning.
Look ahead: Economic Calendar – for Fri May 20, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s monthly expiration session has gotten used to contending with a noon hour Crude Oil influence, which tends to influence price action.
Existing Home Sales
10:00 AM ET
*Baker-Hughes Rig Count
1:00 PM ET
Afternoon Bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2037.00 | 2033.75 |
| …would target | 2042.00 | 2038.75 |
| Bias-down: under | 2026.75 | 2023.50 |
| …would target | 2021.25 | 2018.00 |
| 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.