Posts by Rod David
Pre-close View… Upside target met, more to come?
Second bias-up target met, and gaining traction.
First a housekeeping note — we’re experiencing a massive power outage, with no known time to resolution. I’m operating off of a charged device’s hot spot, knowing it might not last through the close.
Second, this afternoon’s 2066.75 bias-up target was met at the afternoon bias environment’s high. This morning’ room for noise up to 2058.50 above its 2056.00 bias -up target was met at the morning’s high. So, the bottoming pattern we discussed during this weekend’s Saturday Review seems to be playing out.
Fresh highs this afternoon up to 2068.50 are reacting down and could dip to 2060.00. Regardless, the bias environment was exited above the noon hour’s high and the final hour was entered higher, so the rally is gaining traction.
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))
Friday’s breakout below a multi-session range would have been confirmed Monday by a second consecutive lower close, but the pullback objective below at 1.1245 remains in-play regardless.
Gold Jun Contract (GC, ETF: (GLD))
Extreme volatility continued with Sunday night’s rally from Friday’s 1274.50 close to probe the 1282.70 buy signal to attack 1290.50. But, wait, there’s more. Monday morning’s post-open plunge fell back to within a few dimes of Friday’s 1274.50 close, preventing the buy signal from triggering.
Silver Jul Contract (SI, ETF: (SLV))
Rallying sharply Sunday night stopped short of touching 17.50 whose recovery would likely launch a new upleg. Reversing down attacked Friday’s 17.13 close to keep alive the 16.75 attraction below.
30-year Treasury Jun Contract (US, ETF: (TLT))
Probing fresh highs overnight came within 1 tick of filling the gap back to April’s high close at at 166-30. Having Neutralizing the attraction enabled an intraday pullback to 165-18, which shouldn’t weaken much further or for much longer if the 167-26 objective remains intact .
Crude Oil Jun Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Fulfilling the outstanding objective for a new high close Thursday was not reversed by Friday’s inside day, keeping alive the attraction to 47.25 which was met into Monday’s open and probed up to 47.85. Closing above or below 46.80-46.85 would either maintain the upside momentum or else begin topping.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Friday’s tests of 2.08 support was probed Sunday night to gap down Monday and retest prior lows around 2.03. Closing above 2.11 would now launch a new rally leg.
Mid-day Update… Tracking for a pivotal week.
Morning surge suggests bigger upleg coming.
Plunging this morning or at least breaking sharply was the only credible path down. And not only down, but to convert Friday’s retest of the prior Friday’s lows into extending the multi-week decline much lower.
Despite ranging narrowly since midnight Sunday, Monday’s open began recovering to and through this morning’s 2050.50 bias-up signal. Its 2056.00 bias-up target had room for noise above it to 2058.50, which was touched when the bias environment began lapsing at 11:30.
The noon hour was entered at session highs up to 2061.50. Holding 2056.00-2058.50 would have let the afternoon back-and-fill, but probably not do anything outright bearish. Not reacting down from 2056.00-2058.50 has left the door open to extending the rally this afternoon. And extending the rally this afternoon would likely be very aggressive.
Unless proved otherwise, upside momentum remains intact and the afternoon remains vulnerable to trending up steeply and substantially. Similar to the last two weeks’ Monday or Tuesday session-long rallies, it would be likely to launch a larger multi-session rally back to the highs — in fact, the noon hour’s exit just touched 2062.50.
And like those last two attempts, it would be vulnerable to fail. But a credible downleg would begin before entering a timing window, and none yet has this afternoon.
Look ahead: Economic Calendar – for Tue May 17, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Any reaction to Tuesday’s pre-open CPI is likely to be duplicated by reactions to the morning’s later econ reports. The two Fed speakers are capable of triggering at least a reaction. Fed presidents Lockhart Williams are supposedly being interviewed by Politico at some point intraday.
Neel Kashkari Speaks
MON 7:00 PM ET
*Consumer Price Index
8:30 AM ET
Housing Starts
8:30 AM ET
Redbook
8:55 AM ET
Industrial Production
9:15 AM ET
E-Commerce Retail Sales
10:00 AM ET
4-Week Bill Auction
11:30 AM ET
*John Williams Speaks
12:00 PM ET
*Robert Kaplan Speaks
1:15 PM ET
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2065.00 | 2061.00 |
| …would target | 2070.75 | 2066.75 |
| Bias-down: under | 2057.25 | 2053.25 |
| …would target | 2050.75 | 2046.75 |
| Signal status: LATE 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.