Posts by Rod David
Pre-close View… Overly-optimistic, indeed.
Overly-optimistic, impatient buying — meet discounted news.
Pre-open lows had only attacked 2035.00 to within 1 tick. The post-open rally had developed from only the slightest fresh low. The morning rally’s steep slope wreaked of impatience, 
which tends to be bearish from a contrarian perspective.
The morning rally’s 2050.50 objective was met, and still the afternoon bias signal was triggered. Its 2057.75 target was met at the high, just minutes before the FOMC news.
All of that optimism — be it ineffectual, impatient, or just overly — suffered the consequences by plunging to 2030.75.
2030.75 is 1 tick above the Employment Situation report reaction’s low, which is obligatory support. The drop’s 2033.00 support was never probed without also being overlapped. So, a bounce just touched 2043.50.
Simultaneously oversold RSIs at the low require a retest, probably down to 2027.00 if not also to 2025.00. Closing back above 2045.00 is a necessary element to any bullish scenario.
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))
Two days of consolidating Thursday’s breakout finally resolved by gapping down Wednesday, still targeting the gap outstanding from 1.1245 and probably also fresh lows so long as bounces now hold 1.1330.
Gold Jun Contract (GC, ETF: (GLD))
Gapping down Wednesday only fluctuated around the 1271.50 sell signal, whose break through the close would signal a drop underway to 1241.00 instead of a rally to 1312.50.
Silver Jul Contract (SI, ETF: (SLV))
Wednesday’s gap down attacked 17.90 and ranged flat-to-higher in negative territory, still targeting a pullback to 16.75 if not also to 16.50.
30-year Treasury Jun Contract (US, ETF: (TLT))
Resistance at the 166-06 buy signal had held Monday and reacted down a little deeper Tuesday, launching a slide Wednesday. Thursday’s consolidation at the 165-00 pullback limit was broken on the way down to 164-00. Closing any lower would target 163-07 and possibly 162-23.
Crude Oil Jun Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Already firming to fresh highs before Wednesday’s EIA report, a knee-jerk reaction down was recovered back up to fresh highs attacking 49.00. The pullback limit is now 47.90, with near-term upside potential to 50.80.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Gapping up and ranging narrowly Tuesday had not confirmed Monday’s breakout back to the lows, but the gap back to Monday’s 2.03 was filled by. Wednesday’s gap down. The session ranged at fresh lows to and through fresh lows fulfilled it, but did not signal any impending recovery.
Mid-day Update… Respect.
Bias-up signaled, target met. News dead ahead.
Trending ahead of an FOMC event? It’s just the Minutes, but still.
The morning’s 2050.50 bias-up signal’s test defined the bias environment’s upper-end. Its reaction down to 2044.50 was recovered back to the morning’s 2052.00 high. Which was retested again as the noon hour ended.
This time it was probed, triggering the afternoon’s 2052.50 bias-up signal. Its 2057.75 bias-up target was just touched.
That last upleg is odd, developing just an hour before the 2:00pm FOMC Minutes. Probing above this morning’s high was unlikely, so triggering bias-up is less likely.
The bias-up target’s attraction is now neutralized. Yesterday afternoon’s plunge has been retraced entirely. It’s not actually rejected, so the recovery is still vulnerable to reacting negatively to the FOMC event, especially greeting the news from under 2055.00.
Look ahead: Economic Calendar – for Thu May 19, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Thursday’s pre-open Philly Fed is the only regional survey with a track record of influencing price action. And its reaction would likely be duplicated by the post-open LEI.
Jobless Claims
8:30 AM ET
*Philadelphia Fed Business Outlook Survey
8:30 AM ET
Chicago Fed National Activity Index
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
*Leading Indicators
10:00 AM ET
EIA Natural Gas Report
10:30 AM ET
Fed speaker
10:30 AM ET
10-Yr TIPS Auction
1:00 PM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET
Afternoon Bias
| WED afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2055.75 | 2052.50 |
| …would target | 206.00 | 2057.75 |
| Bias-down: under | 2046.00 | 2042.75 |
| …would target | 2040.75 | 2037.50 |
| Signal status: BIAS-UP | 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.