Posts by Rod David
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2055.00 | 2045.50 |
| …would target | 2059.75 | 2050.50 |
| Bias-down: under | 2043.75 | 2034.50 |
| …would target | 2038.75 | 2029.25 |
| Signal status: noN-BIAS, TESTED BIAS-DOWN SIGNAL | FAQ | |
| INTRO VIDEOS #1 and #2 | ||
1. At 10:15, 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 10:15 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 10:15 would invoke a grace period through 10:30 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 10:30 after invoking the grace period would trigger “noN-bias,” with no bias influence.
Post-market Wrap (recording & summary)
False alarm, or false start?
My prior blog post had described many of the reasons why the rally is vulnerable to reversing down. A 5-stage pattern had been plateauing up to 2047.50, awaiting a 5th stage targeting at least 2042.75 and potentially 2037.75. The final hour began by dropping quickly to attack 2037.75. The balance of the session ranged sideways.
Was that just the beginning of a much deeper drop yet to come, its sponsorship inhibited by the fast-approaching close? Or was that all there is? It could be either — no unfinished business is outstanding, and neither sponsorship gained traction.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
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))
Gapping down Tuesday may be trying to accelerate the temporary dip back down to “lower prior highs” at 1.1190 down to 1.1155 as was suggested by two consecutive sessions of sliding shallowly but relentlessly off the high.
Gold Apr Contract (GC, ETF: (GLD))
Terrorist fears triggered a rally that tested 1262.00 resistance overnight and the 1255.40 bounce limit intraday. Dipping back under 1250.20 helps to confirm the 1216.50 and 1223.00 targets remain in-play.
Silver May Contract (SI, ETF: (SLV))
Firming Tuesday morning remained within the range and likely only noise before breaking back under 15.70 to the 15.25 target, if not also lower.
30-year Treasury Jun Contract (US, ETF: (TLT))
Falling stocks seemed to be the trigger for Tuesday’s gap up to the 162-07 bounce limit. But extending higher post-open to 163-00 accompanied stocks firming, and then recovering. Regardless of the intraday extesion, 162-07 failed to hold, leaving the decline’s momentum and its 160-28 target remain intact.
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Strength attacking 41.75 stopped short of filling the opening gap back up to 42.00-42.35 before weakening again. A deeper detour to “lower prior highs” at 39.50 might inject itself before completing the topping pattern.
Natural Gas Apr Contract (NG, ETF: (UNG, UNL))
Gapping up 2 cents Tuesday suggested that Monday’s late probe under 1.85 could be rejected. But the balance of the morning dipped back down and probed Monday’s late low. Closing back above 1.85 would suggest the 1.99 target remains in-play.
Mid-day Update… Not a safe neighborhood.
Bias-up target met already. Two bearish setups forming.
Before I go any further with the downside risks alluded to above, I should offer a reminder. Trends, especially rallies, are survivors. They find ways to survive that continually surprise me. One general theme is quite common — when appearing to be its most vulnerable to reversing, it finds the resolve to resume and extend.
This may be one of those times.
The trend is vulnerable because there is no “unfinished business above” attracting price higher. That, alone, is not a sell signal. It’s not like support is being broken, which can attract sellers. Resistance is being probed, which can attract buyers. This instance, however, has other challenges:
— unfinished business above is being neutralized almost as quickly as it is created (most recently this afternoon’s bias-up target that was met already at the 1:20 bias timing window),
— target’s and resistance are holding through relevant timing windows (e.g. this afternoon’s 2045.75 bias-up target),
— RSIs diverged negatively into the highs,
— the two-day ranging at trend highs now trying to probe resistance that has held through relevant timing windows,
— much buying pressure was expended to prevent this morning’s gap down which then attracted weak-handed buyers,
— a potentially bearish setup is forming that targets at least 2042.75, potentially 2037.75, and in the latter case possibly also new session lows.
Ranging around this afternoon’s 2045.75 bias-up target blipped-up to 2047.50 and suddenly its reaction down is testing 2044.50. Trending down immediately may be difficult since 1-minute RSI just hit its support at oversold. That can work itself out by firming momentarily.
That momentary probe is where rallies often revive themselves. Undeterred by my above list or by a list 10 times longer, defenders can appear from out of nowhere. A rally that can ignore so many bearish elements and extend higher anyway probably won’t be too long from printing new highs.
Either way, this area is unlikely to be visited for much longer. It’s too dangerous.
Look ahead: Economic Calendar – for Wed Mar 23, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Overnight Fed speakers are interesting, but not often influential to price action. Wednesday afternoon’s EIA report is reliable for influencing Crude Oil.
Patrick Harker Speaks
TUE 6:30 PM ET
MBA Mortgage Applications
7:00 AM ET
New Home Sales
10:00 AM ET
*EIA Petroleum Status Report
10:30 AM ET
2-Yr FRN Note Auction
11:30 AM ET