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))
Testing the 1.1485 sell signal overnight and again Wednesday morning was held both times, suggesting an intraday test of the rally’s 1.1600 target will print before a durable decline develops.
Gold Jun Contract (GC, ETF: (GLD))
Probing under the 1286.00 pullback limit could be absorbed by closing the same session back above 1289.00. At least overlapping 1286.00 through the close would undermine the downside momentum, keeping alive the attraction up to 1313.50. But a second consecutive close under 1286.00 would instead trigger a deeper pullback first, although probing fresh highs would still be likely to fail.
Silver Jul Contract (SI, ETF: (SLV))
Barely managing to close back at or above the 17.50 pullback limit Tuesday still needed to resolve Wednesday morning in rally mode to prove the pullback had ended. Instead, it extended lower. Now a close above 17.50 is required before signaling the pullback has ended.
30-year Treasury Jun Contract (US, ETF: (TLT))
Ranging choppily around Tuesday’s 164-10 high did not reject the trending that is targeting 165-06. But it also created a pattern whose bearish resolution is likely to begin by gapping down. So, avoiding a gap down keeps in-play 165-06.
Crude Oil Jun Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Tuesday’s probe under the 43.85 sell signal was likelier to be rejected than to extend down. But gapping up to the 44.50 buy signal proved too optimistic to withstand the morning’s EIA report. Its reaction back down to Tuesday’s 43.25 lows isn’t any likelier to extend down while unfinished business above remains outstanding at a new high close. but it is as vulnerable to break lower first.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Rather than first dipping to fill the gap back down to Monday’s 2.03 close, Wednesday’s open gapped up to test 2.14 resistance. Like Tuesday’s gap up to 2.07, the balance of the session only ranged narrowly sideways. Filling the gap would help to clear the way for a durable rally, which would otherwise be signaled by closing above 2.22. Thursday’s EIA report is not being greeted from an optimal position of strength.
Mid-day Update… Getting comfortable with the depth.
Look out below if that comfort level is finally reached.
Deep sea divers know the risks of descending too quickly too deeply. The inverse can be true, too. We last saw that on Monday, when the gap up pointed the session higher, but trending didn’t begin until the morning’s choppiness had ended.
Has this morning’s choppiness ended? The noon hour’s exit touched the 2041.00 low where the morning’s bias environment began lapsing. Retracing it proves the noon hour’s bounce was “ineffectual optimism.” Both lows stopped 1 tick short of touching overnight lows, optimism that is potentially bearish from a contrarian perspective.
If tested, the 2049.75 bias-up signal should define the bias environment’s upper-end. Back above 2045.00 would signal some bounce is underway. But back under 2042.00 would signal a new downleg underway. Before 1:30 a break under 2042.00 would invalidate the afternoon’s no-bias signal. After 1:30 a break under 2042.00 would be no-bias trending requiring a retracement.
Sideways ranging until the bias environment begins lapsing would leave the final hour vulnerable to trending down sharply.
Look ahead: Economic Calendar – for Thu May 5, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: One more day before Friday’s payrolls, and three more reports to guage the market’s sentiment toward strong or weak data. Still, none of Thursday’s reports have a reliable track record for influencing price action. And neither do any of the day’s other reports.
Neel Kashkari Speaks
THU 5:30 PM ET
Challenger Job-Cut Report
7:30 AM ET
Jobless Claims
8:30 AM ET
Gallup Good Jobs Rate
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
EIA Natural Gas Report
10:30 AM 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 | 2056.00 | 2049.75 |
| …would target | 2061.25 | 2055.00 |
| Bias-down: under | 2047.25 | 2041.00 |
| …would target | 2041.00 | 2034.75 |
| Signal status: NO-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.
Post-open Review… Last last gasp?
Post-open bounce resembles yesterday afternoon’s rally.
Corrective bounces often exhibit the trait of urgency. Weak sponsorship will abandon a move when its momentum becomes suspicious. So, they must keep hesitation to a minimum while fulfilling their higher objective.
A pre-open dip had retested what would be this morning’s renewed bias-down target at 2042.75. So did a post-open dip, after quickly attacking 2048.00. Quickly recovering to fresh post-open highs was able to overlap the 2052.75 bias-down signal at 10:15 to invoke the grace period.
All quick, like a temporary correction.
Bias-down triggered late. The 2052.75 bias-down signal should still define the range’s upper-end if retested. Its 2046.75 target was just retested, and this being a bias-down environment, it need not hold as support.
Not renewing the bias-down signal at 10:15 has made lower objectives at 2030.00-2035.00 unlikely to be met this morning. The bigger picture still points there, although recovering the 2052.75 bias-down signal while the bias environment is lapsing would be bullish.