Posts by Rod David
Pre-close View… Hanging by a frayed thread.
Backing-and-filling expanded.
This morning’s retracement had room for noise under its 2053.25 bias-down target to 2050.50. Repeatedly testing 2053.25 never got to 2050.50. But it gave way easily after the afternoon triggered noN-bias, finding an air pocked back down to Monday’s 2044.00 opening lows.
The bias environment exit was probing even lower and has extended down to 2036.75. RSIs diverged positively, and its reaction is testing 2042.50. Extending higher into the close would target 2048.00 and potentially 2050.50. Back under 2039.50 would be a compelling hold-short vulnerable to trend down sharply overnight.
The opportunity to leverage yesterday’s rally has been rejected.. More than a rally, yesterday represented a rejection of a bearish opportunity. Retracing that rejection has re-opened the door to extending the 3-week old decline. Reinstating the recovery would require gapping up Wednesday above 2055.00-2056.00.
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))
Tuesday’s dip back down toward Friday’s prior low didn’t resume the decline, but neither did it extend Monday’s rally that would have undermined the decline’s lower objective.
Gold Jun Contract (GC, ETF: (GLD))
An unusually narrow intraday range Tuesday was bounced between the 1271.50-1287.20 buy and sell signals, without closing beyond either to signal extending in that direction.
Silver Jul Contract (SI, ETF: (SLV))
Very narrow ranging Tuesday prevented following-through on either Monday morning’s surge or on its afternoon reaction. Consolidating under 17.50 keeps alive the attraction below down to 16.75.
30-year Treasury Jun Contract (US, ETF: (TLT))
Bouncing Tuesday to test the 166-06 buy signal was held as resistance, while still likely to be triggered and to probe prior highs.
Crude Oil Jun Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Upside potential remained alive so long as pullbacks were to hold 46.85 as support. Fresh highs Monday night testing 48.40 were retraced intraday Tuesday to within a dime. Now closing under 46.85 would signal momentum reversing down.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Gapping up Tuesday and holding up prevented a second consecutive session from confirming Monday’s breakout back to the lows. Retesting Monday’s range any less aggressively than gapping down to and through it would more likely recover to at least test the 2.11 buy signal.
Mid-day Update… Not without a fight.
Trending down through the noon hour might get push back.
The morning’s 2059.25 bias-down signal had quickly met its 2053.00 target. Several attempts to break lower all failed. The balance of the bias environment bounced to 2060.00 resistance.
Rallying through the noon hour would have been a great opportunity to compartmentalize this morning’s backing-and-filling. But the noon hour slid throughout, probing fresh lows down to 2051.25.
Persistent weakness hasn’t attracted much more selling pressure. The afternoon’s 2053.25 bias-down signal was still being overlapped at 1:20 and 1:30 to trigger noN-bias. The bias-down target isn’t in-play, and neither bias signal must define the range’s extreme.
Back above 2056.00 would give one more chance at an afternoon rally. An afternoon rally is critical to yesterday’s session-long rally ending the three-week old decline. Otherwise, exiting the afternoon bias environment at 2:30 under 2050.50 would all but require the next upleg to originate from lower levels.
Look ahead: Economic Calendar – for Wed May 18, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Volatility tends to become inhibited ahead of Wednesday afternoon’s FOMC Minutes release. Its reaction can be muted if there are no surprises. However, confirming an aversion hiking rates might be as influential as any language that suggests it is not being rejected.
MBA Mortgage Applications
7:00 AM ET
Atlanta Fed Business Inflation Expectations
10:00 AM ET
*EIA Petroleum Status Report
10:30 AM ET
*FOMC Minutes
2:00 PM ET
WedEX Indicator
4:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2068.25 | 2062.25 |
| …would target | 2071.50 | 2067.50 |
| Bias-down: under | 2057.25 | 2053.25 |
| …would target | 2052.25 | 2048.25 |
| 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.