Posts by Rod David
Pre-close View… Sunny side down.
Ineffectual optimism is the recovery’s biggest threat.
Despite a gap up, delaying its extension higher had suggested that buyers were weak-handed. They disappeared entirely when the 2055.00 renewed bias-up target was tested by 6 ticks by 10:15 instead of exceeded. The morning’s bias environment fell to 2041.75.
Despite that still being positive territory, delaying a recovery suggests that buyers are expending energy without gaining traction. The noon hour’s bounce tested the afternoon’s 2049.75 bias-up signal by 6 ticks but wasn’t triggered at 1:20. The afternoon’s bias environment fell to 2043.50.
Despite both the bias environment exit and final hour’s entry not gaining traction, fresh afternoon lows are being probed. Not fresh session lows — at least, not yet. In addition to those two instances of “ineffectual optimism” already neutralized, the gap back to Friday’s 2040.75 close has been threatened for quite a while.
The lack of traction may prevent extending down substantially before tomorrow. But filling the gap back to Friday’s close, down to 2039.00, is still likely today.
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 Mar Contract (EC, ETF: (FXE, UUP))
The delayed reaction to a top at 1.1435 has undermined the topping pattern, so Monday’s probe of fresh intraday highs has potential to extend into a new upleg. It stopped pessimistically short of touching last week’s overnight probe of fresh highs at 1.1475, so any higher would likely extend.
Gold Apr Contract (GC, ETF: (GLD))
Friday’s reaction up from the 1234.50 long-entry had already fulfilled the 1255.00 minimum objective overnight, but extended intraday to also fulfill the 1260.00 upper-end of its potential. Closing back under 1253.00 would signal that momentum is reversing down to fill gaps back to 1244.00 and 1225.00 instead of extending higher to 1270.00 and potentially 1286.00.
Silver May Contract (SI, ETF: (SLV))
Friday’s close above the 15.25 bounce limit was extended Sunday night and then higher throughout Monday morning to 15.99. Closing back under 15.88 would signal the bounce had peaked, and probably reversing down to resume the decline targeting 14.70.
30-year Treasury Jun Contract (US, ETF: (TLT))
Bouncing Sunday night to 166-25 didn’t prevent resuming the pullback targeting 165-12, which was then fulfilled Monday morning. Reacting up tested positive territory above at 166-15.
Crude Oil May Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Ranging around the 39.55 buy signal Friday was not rejected, and extended slightly higher Sunday night to test 40.75 intraday. That officially confirms Friday’s signal, but not convincingly, especially since neither session trended post-open.
Natural Gas May Contract (NG, ETF: (UNG, UNL))
Despite the intraday uptrend Thursday after gapping up above 1.95 resistance, and then Friday’s gap up, Monday’s open gapped back down under 1.95. The gap back to Wednesday’s 1.90 close was filled.
Look ahead: Economic Calendar – for Tue Apr 12, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: None of Tuesday’s several econ reports have a track record for influencing price action. But the day is book-ended by two Fed speakers, one appearing at the unusual late-afternoon time — three, including the closing appearance — all coming one day after Monday’s expedited FOMC meeting.
NFIB Small Business Optimism Index
6:00 AM ET
Import and Export Prices
8:30 AM ET
Redbook
8:55 AM ET
*Patrick Harper Speaks
9:00 AM ET
4-Week Bill Auction
11:30 AM ET
3-Yr Note Auction
1:00 PM ET
Treasury Budget
2:00 PM ET
*John Williams Speaks
3:00 PM ET
Jeffrey Lacker Speaks
4:00 PM ET
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2057.00 | 2049.75 |
| …would target | 2062.00 | 2054.75 |
| Bias-down: under | 2048.75 | 2041.50 |
| …would target | 2042.50 | 2035.25 |
| Signal status: NO-BIAS, TESTED BIAS-UP 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… Holding up, but holding out.
Post-open extension a little too slow for comfort.
While the path back down didn’t have any timing requirement, extending the gap up should have developed with little delay after the open. The delay in extending higher could have been littler, but it did extend higher.
Gapping up to this morning’s 2050.50 bias-up target had dipped quickly to 2047.00, and the first half-hour’s highs were still overlapping the overnight highs. But price has gradually extended higher to 2056.50.
Extending higher has fulfilled the renewed bias-up target at 2055.00. It was being overlapped at 10:15 to avoid doubly renewing the bias-up. Its reaction down is testing 2052.75 into 10:30, targeting 2050.75, and potentially also 2049.75.
We can give that a benefit of the doubt to buyers gaining traction. Probing back under 2034.00-2035.00 may be rejected. Just keep in mind that the optimal rejection would have extended higher sooner. Exiting this morning’s bias environment back under its open could deteriorate very quickly intraday.