Posts by Rod David
Pre-close View… Imagining support.
Tomorrow’s payrolls report inhibiting attack on the lows.
Triggering this afternoon’s 2047.00 bias-down signal fulfilled its 2042.00 bias-down target to 2039.50, stopping optimistically short of touching yesterday’s low. Bouncing into and out of the bias environment lapsing attacked 2046.00.
Entering the final hour at 2042.00 extended down to 2040.00 before bouncing. Another drop has stopped optimistically short of its prior low.
Optimism can be bearish from a contrarian perspective. Not only in price structure as described above, but also compared to events. And tomorrow morning’s pre-open Employment Situation report is an event.
It’s not unusual for the payrolls report to inhibit volatility the afternoon prior. Maintaining a break in either direction is difficult. Choppy sideways trending through the close wouldn’t be surprising.
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))
Holding the 1.1485 sell signal’s test Wednesday could have been exploited by retesting the 1.1600 target, but Thursday’s open gapped down and extended under 1.1415 support.
Gold Jun Contract (GC, ETF: (GLD))
Closing back above 1282.70 Wednesday would have signaled momentum reversing up, but Thursday’s gap up above it still needed to extend higher through the close. Instead, it was retraced to probe under Wednesday’s low attacking 1270.00. Not immediately recovering 1282.70 could extend down to 1260.00.
Silver Jul Contract (SI, ETF: (SLV))
Gapping back up above the 17.50 pullback limit Thursday was not maintained after having failed to hold it Wednesday. It was reversed deeply enough only to fill the gap back to Wednesday’s close, which held, undermining the attempt to extend down.
30-year Treasury Jun Contract (US, ETF: (TLT))
Wednesday’s choppy ranging had avoided rejecting Tuesday’s gap up and post-open surge, essentially reconfirming the 165-06 target remained in-play. Thursday resumed the rally and fulfilled the target. The recovery could extend, so long as 164-28 holds as support instead of its break signaling momentum reversing down.
Crude Oil Jun Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Gapping up Thursday well above the 44.50-44.75 resistance that had held Wednesday would have been credible for extending higher and fulfilling the outstanding requirement for at least one more higher close. But post-open action slid back down to 44.00, filling the gap back to Wednesday’s late surge.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Gapping up Thursday only made even likelier a knee-jerk reaction down after the morning’s EIA report So far, only the gap back down to Tuesday’s close has been retraced, but at least a test of 2.03 remains likely.
Mid-day Update… Back to business.
Rejection attempt fails, decline resumes.
Invalidating this morning’s bias-up had put into play tests of 2046.00 and 2042.00. The bias environment exit was firming from a test of 2046.00 when a Fed speaker’s comments made headlines, and triggered a spike up.
There was room to 2052.50 before that might actually resume the overnight rally effort. But 2052.50 was only touched and not triggered before reversing back down.
A sell signal triggered, as did this afternoon’s 2047.00 bias-down signal, and the 2042.00 bias-down target has been probed down to 2039.50.
Persistently oversold 3-minute RSI at the low suggests a bounce would be limited and fail. So does the low having stopped optimistically 3 ticks short of touching yesterday’s low.
Bouncing anyway has room up to 2044.00-2045.00 before suggesting a more substantial recovery underway. Otherwise, the trend remains down, next targeting 2034.75.
Look ahead: Economic Calendar – for Fri May 6, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s monthly Employment Situation report is very reliable for triggering a price reaction. It can also inhibit volatility Thursday afternoon. The rig count has also become reliable for inhibiting price action before it.
*Employment Situation
8:30 AM ET
*Baker-Hughes Rig Count
1:00 PM ET
Consumer Credit
3:00 PM ET
Treasury STRIPS
3:00 PM ET
Afternoon Bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2069.50 | 2053.25 |
| …would target | 2065.50 | 2059.50 |
| Bias-down: under | 2053.00 | 2047.00 |
| …would target | 2048.25 | 2042.00 |
| Signal status: BIAS-DOWN | 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.