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))
Friday’s confirmation of Thursday’s breakout had gapped up sharply and extended higher intraday. But that didn’t undermine its credibility for serving as confirmation, and for requiring yet another higher close. Not necessarily an immediate higher close, although Monday produced it. The next higher objective in-play is 1.1600 so long as pullbacks hold tests of Monday’s 1.1510 open.
Gold Jun Contract (GC, ETF: (GLD))
Closing above 1286.00 Friday had put into play the next higher objective at 1312.50. Monday’s gap up attacked the target, which remains in-play so long as pullbacks now hold 1286.00 as support.
Silver Jul Contract (SI, ETF: (SLV))
Probing Friday’s high above 18.05 Monday prevented the subsequent reversal down from forming an Island top. But there is room down to 17.50 or even to 17.35 before undermining the next upleg targeting 18.80.
30-year Treasury Jun Contract (US, ETF: (TLT))
Despite Friday’s higher close having confirmed Thursday’s breakout and now requiring an eventual third higher close, Monday’s opening dip kept the door open to testing prior lows around 161-00 before extending the rally to its 165-00 target.
Crude Oil Jun Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Monday’s weakness further delayed producing the third higher close still outstanding from last week’s confirmed breakout. Pullbacks meanwhile have room down to 43.85 without reversing momentum down.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Friday’s rally had closed high enough to undermine downside momentum, but not high enough to reverse momentum up. Undermined downside momentum didn’t prevent gapping down Monday to test Thursday’s lows and previous “lower prior highs” around 2.08. .
Mid-day Update… Frequency matters.
So many sizable swings in a singular pattern.
This morning’s late bias-up signal eventually produced a fresh high after 10:30. This makes its 2073.00 target very difficult to avoid testing.
Meanwhile, the swings within this morning’s range were not impressive for their size so much as their frequency. So many sizable swings without breaking the range is very unusual. There is no shortage of opinion, and it is widely varied.
Perhaps if the swings weren’t responding to the singular pattern’s calculable inflection points. Then, the ongoing indecision could be dismissed as a market trying to establish a resolution. But gapping up from Friday’s range had done that already, along with triggering bias-up.
Regardless, this afternoon’s 2068.00 bias-up signal is now triggering. Firming into the noon hour’s exit has surged to test 2071.25. Finally exploiting the setup doesn’t improve its productivity. So extending the recovery depends on exceeding 2073.00 through a relevant window.
Look ahead: Economic Calendar – for Tue May 3, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Tuesday’s calendar is thin, with only a Fed speaker having any track record for influencing price action. Thing get busier through the week as Friday’s payrolls report looms.
John Williams Speaks
MON 5:30 PM ET
Gallup US ECI
8:30 AM ET
Redbook
8:55 AM ET
*Loretta Mester Speaks
10:30 AM ET
4-Week Bill Auction
11:30 AM ET
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2074.25 | 2068.00 |
| …would target | 2080.25 | 2073.00 |
| Bias-down: under | 2067.25 | 2061.00 |
| …would target | 2061.50 | 2055.25 |
| 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… Periscopes up.
Sub-optimal gap up surfaces at fresh highs.
Gapping up above prior highs — and maintaining the gap up through the opening 15 minutes of volatility — was critical to preventing sellers from regaining control.
Gapping up to the 2065.25 bias-up signal reacted down 4 points, and recovered in time to maintain the gap up. But it wasn’t optimal. A 30-minute range between 2059.50–2064.00 had to resolve up. It was, but only to overlap 2065.25 in time to invoke the grace period. After extending to 2068.75, bias-up triggered, but late.
All of which kept alive room for another detour on the way to this morning’s 2073.00 bias-up target. That pattern allows room to briefly test 2065.50 as support. It was just tested. And it resolved up.
That recovery didn’t prevent a knee-jerk reaction down that attacked 2062.00. A knee-jerk reaction to what, I don’t know. Back above 2066.00 would indicate it was a knee-jerk reaction anyway. Otherwise, the sub-optimal gap up will have dived deeply before the bias environment lapses.