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))
Gapping up Wednesday extended only back up to last Thursday and Friday’s highs, within the range of the 4-day setup that is still targeting 1.1245. But the pattern won’t easily tolerate more bouncing prior to resuming the decline.
Gold Jun Contract (GC, ETF: (GLD))
Wednesday’s gap up threw yet another curve at the ongoing widely fluctuating range. But holding 1282.70 as resistance and closing back under 1271.50 would maintain the 1241.00 target below.
Silver Jul Contract (SI, ETF: (SLV))
Gapping up Wednesday to 17.50 resistance and testing its prior high at 17.60 was nevertheless retraced down to 17.30, whose break would reinstate the decline targeting 16.75.
30-year Treasury Jun Contract (US, ETF: (TLT))
Filling the gap back to Friday’s 165-27 open did not react down Tuesday, maintaining the 166-30 objective above. Wednesday’s fresh highs testing 166-21 got closer to its objective, whose test should also visit 167-26.
Crude Oil Jun Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Having re-set the pattern with Monday night’s fresh lows at 43.03 and recovering quickly Tuesday to 44.50 resistance, Wednesday’s gap up to and through the 44.75 buy signal was able to attack recent highs at 46.25.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Wednesday’s open dipped initially to touch Monday’s 2.11 “lower prior highs,” and reacted up above Tuesday’s interim high to 2.18. The two consecutively higher closes above 2.14 are greeting Thursday’s EIA report from a position of strength that has no bullish excuse not to react aggressively.
Mid-day Update… Checking for another pulse.
Post-open surge returns to its lows.
Was this moring’s 2073.00 bias-down signal not rejected until 10:30 because the EIA report had inhibited price action? Possibly. It triggered a 5-point surge to 2078.00 where at least some hesitation had been likely.
But that surge was retraced entirely, probing 3 ticks under the overnight lows down to 2068.75.
Ranging narrowly for two hours has held 2073.00 as resistance. Now the noon hour is being exited and the afternoon’s bias timing window is just minutes away. Reaction to the 10-year auction is retesting the low.
It’s only a knee-jerk reaction down if 2071.50 and 2073.00 are recovered now. That’s still quite a bit short of the 2076.75 bias-up signal. A rejection of yesterday’s rally isn’t very likely today, but that doesn’t prohibit probing fresh session lows before recovering.
Look ahead: Economic Calendar – for Thu May 12, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Thursday morning’s pre-open reports have no track record for influencing price action. But two late-morning Fed speakers and a 30-year auction threaten to keep volatility jumpy into the afternoon.
Jobless Claims
8:30 AM ET
Import and Export Prices
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
EIA Natural Gas Report
10:30 AM ET
*Loretta Mester Speaks
11:00 AM ET
*Eric Rosengren Speaks
11:45 AM ET
*30-Yr Bond 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 | 2081.75 | 2076.75 |
| …would target | 2087.50 | 2082.50 |
| Bias-down: under | 2072.50 | 2067.50 |
| …would target | 2067.25 | 2062.25 |
| 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… Taking the scenic route.
Opening dip is recovered after news.
Surging out of the open was the most appropriate behavior for resuming the rally this morning. Recovering 2076.00 would have been appropriate, too. But the open’s 2-1/2 point surge only touched 2076.00, and then attacked the overnight lows down to 2070.50.
Perhaps the recovery was just inhibited by the impending EIA news. Already having firmed back up to the 2073.00 bias-down signal, the news triggered a 5-point surge.
The grace period had been invoked, so the 10:30 surge can be assumed to have triggered late no-bias. An offsetting test of the 2080.50 bias-up signal is in-play. That would fulfill the traction gained by yesterday’s rally.
Back under 2074.25 would undermine the recovery — or, at least, undermine extending the recovery today.