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))
Australia’s surprise overnight rate CUT produced a test of the 1.1600 target. Closing above it would trigger higher targets, but otherwise there is no unfinished business above. Closing negative Tuesday makes Monday’s 1.14.85 low a sell signal.
Gold Jun Contract (GC, ETF: (GLD))
Monday’s choppy sideways ranging didn’t launch an immediate rally Tuesday, so any later probe higher is likely to hold a test of the 1312.50 target that closing above 1285.00 had triggered — so long as 1285.00 holds as support, which was tested Tuesday.
Silver Jul Contract (SI, ETF: (SLV))
Tuesday’s pullback held a test of 17.50 to avoid signaling momentum reversing down. Meanwhile, a retest of the 18.05 area highs remains likely, and higher highs would resume the rally targeting 18.80.
30-year Treasury Jun Contract (US, ETF: (TLT))
Closing Monday under 162-12 was rejected by Tuesday’s gap up to and through recent 163-12 highs. Extending higher intraday to test 164-08 produced the third higher close required by last week’s confirmed breakout. Not reversing down immediately under 163-12 could extend to 165-00.
Crude Oil Jun Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
The pullback extended lower Tuesday and probed under the 43.85 sell signal. This should define the pullback to keep alive near-term potential to produce a required fresh high close. So, the sell signal’s test is suspicious, and rejecting it Wednesday wouldn’t be surprising.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Gapping up above 2.07 prior lows on Tuesday negated Monday’s late break that had closed lower. But the gap back down to Monday’s 2.03 close should be filled before a reliable rally leg can begin — which might help to explain why the gap up never improved intraday.
Mid-day Update… Pushing back hard.
Bouncing back to the open.
10:15’s 2050.25 low was finally broken by more than an errant tick or two. That ended the potential for compartmentalizing this morning’s break under 2059.50. Meanwhile, that break bottomed at 11:30 at 2048.00. So, its sponsorship is similarly vulnerable to being compartmentalized.
This afternoon’s 2057.00 bias-up signal is a function of that last downleg. Recovering it, and its room for noise up to 2057.00, has now triggered bias-up. We assume the bias-up bounce is only a correction, which was dictated by this morning’s bias environment exit not recovering 2059.50.
Speaking of which, 2059.50 is now being probed by 1 point. It can be probed up to Friday afternoon’s high while being only noise. That’s essentially this afternoon’s 2063.50 bias-up target.
Exiting the afternoon bias environment any higher would be difficult to co-exist with the morning’s probe under 2056.00. It would require that Wednesday’s open gap significantly to reject one, or the other. For now, invalidating the current bias-up signal requires exiting this afternoon’s bias environment back under its 2050.50 bias-down signal.
Look ahead: Economic Calendar – for Wed May 4, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Price reaction to any pre-open report is likely to be duplicated in reaction to post-open reports. But only post-open reports have any track record for influencing price action.
Dennis Lockhart Speaks
TUE 7:00 PM ET
MBA Mortgage Applications
7:00 AM ET
*ADP Employment Report
8:15 AM ET
International Trade
8:30 AM ET
Productivity and Costs
8:30 AM ET
Gallup U.S. Job Creation Index
8:30 AM ET
*PMI Services Index
9:45 AM ET
Factory Orders
10:00 AM ET
*ISM Non-Mfg Index
10:00 AM ET
*EIA Petroleum Status Report
10:30 AM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2063.25 | 2057.00 |
| …would target | 2069.50 | 2063.50 |
| Bias-down: under | 2056.50 | 2050.50 |
| …would target | 2050.75 | 2044.50 |
| Signal status: 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.
Post-open Review… Once more into the fire pit.
Retesting lower prior highs that had already held.
Rallying this morning was at the very least dependent upon compartmentalizing any probe under yesterday’s 2059.50 post-open low.
The open tried to compartmentalize the pre-open probing under 2059.50. That failed thanks to a blip-down during the opening 15 minutes of volatility. This also failed being compartmentalized as 9:45 was still testing 2059.50 and not rejecting it.
The result was a plunge to 2053.50, and then lower to 2050.25.
2050.50 happens to be a relevant level. It was tested AT the 10:15 bias timing window, which at least compartmentalizes the sponsorship testing it. Its reaction tested the 2056.00 area.
So long as the 2050.25 low isn’t broken — so long as the 10:15 low is THE low — exiting the bias environment back above 2059.50 could compartmentalize the probing under it. That wouldn’t be optimal, but it’s probably today’s last bullish template.