Posts by Rod David
Post-market Wrap (recording & summary)
NOTE: S&Ps front-month rolls forward from Mar to Jun at Thursday’s open.
Nothing bullish about Wednesday, despite not being carried sharply lower by the topping template. The morning’s plunge stopped optimistically short of touching Tuesday’s low. Multiple recovery attempts exploited as much room as possible without launching uplegs. “Unfinished business below” from the morning was left outstanding at 1967.75 (basis Jun, 1977.00 basis Mar).
No traction was gained either way Wednesday. Trending immediately would require gapping open beyond Wednesday’s 1969.00-1982.00 (basis Jun, 1978.00-1992.00 basis Mar) range, or else probing one end temporarily before richocheting more substantially back in the opposite direction.
The bearish topping template remains intact until a rally gains traction. That might seem to allow indefinite time before resolving. But getting past mid-week without yet trending sharply does make undermine the credibility of starting later.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
Pre-close View… Treading water.
Recovery still elusive, but capitulation is still hiding.
This morning’s plunge to 1978.00 had recovered to its 1991.00 origin as the bias environment began lapsing. Ranging sideways into the noon hour never extended higher. The recovery wasn’t exploited.
Dipping into the afternoon bias timing window attacked 1982.00. The bias environment mimicked this morning’s action by also refusing to extend down.
Price action has remained within the noon hour’s range. Firming back up to 1989.00 was temporary, reacting down, trending down several points but not to new lows.
Unless a rally were to gain traction, the door remains open to price collapsing. Multiple opportunities have been ignored, but it’s getting so late in the day that an actual attempt to rally might not be credible.
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 again Wednesday still wasn’t the optimal start to resuming the decline. Tt would have been credible, but filling the gap back to Tuesday’s close was optimal. The morning’s bounce into positive territory did that, while forming a Head & Shoulder. A new downleg should be obvious with little delay to avoid a bigger rally will have begun.
Gold Apr Contract (GC, ETF: (GLD))
Consolidating at or under the lower-end of the 1277.50-1288.00 target area established a base to launch at least a brief probe further into the range. Suddenly gapping down Wednesday doesn’t prevent that more thorough test, but closing under 1250.00 would make that more difficult.
Silver May Contract (SI, ETF: (SLV))
Tuesday’s dip extended Wednesday, testing support at 15.25 that must hold to keep alive at least an attack on Friday’s high.
30-year Treasury Jun Contract (US, ETF: (TLT))
Tuesday’s post-open rally up to 164-27 had avoided backing-and-filling its gap up, and Tuesday night’s drop fulfilled the requirement testing the 162-20 buy signal as support. Slightly “lower prior highs” allow a little deeper, but there is otherwise no lower requirement or reason to delay rallying again.
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
After Tuesday’s drop held an overnight test of the 36.30 pullback limit, Wednesday’s bounce retested prior highs, allowing the pullback limit being raised to 36.90, and the sell signal raised to 35.45.
Natural Gas Apr Contract (NG, ETF: (UNG, UNL))
Improving Wednesday to attack 1.80 and closing decisively above 1.70 suggests that Thursday’s EIA report will be greeted from a position of strength.
Mid-day Update… Practice run?
Morning plunge remains contained within prior range.
Plunging from 1988.00 down to 1978.00 in 5-7 minutes was the character of price action expected from the topping template. That happened this morning after the EIA report on Crude Oil triggered a knee-jerk reaction up to 1991.00.
Another characteristic of topping? Extending down. That did not happen this morning. Like the bounce above 1986.00 to 1991.00, the reaction down to 1978.00 was contained entirely within yesterday’s late-afternoon range.
But there’s nothing inherently bullish about that. Strong-handed buyers would have exited the bias environment probing fresh highs. Strong-handed buyers may yet exit the noon hour probing fresh highs, but their timing wouldn’t be optimal. Regardless, probing fresh highs during the noon hour would be weak-handed and doomed to failure like this morning’s 5-point probe above 1986.00.
Meanwhile, an offsetting test of this morning’s 1977.00 bias-down signal has become “unfinished business below.” It must be tested eventually. Any interim rally would be suspicious. And testing 1977.00 could resume the character of selling expected by the topping template.
Look ahead: Economic Calendar – for Thu Mar 10, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Thursday’s ECB monetary policy statement is both high-profile and influential, and it’s not very clear what it will be. This only assures in making Draghi’s follow-up press conference all the more likely a catalyst of volatility as he is sure to make many seemingly contradictory and questionable statements..
*ECB Policy statement
7:30 AM ET
Jobless Claims
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
Quarterly Services Survey
10:00 AM ET
EIA Natural Gas Report
10:30 AM ET
Treasury Budget
2:00 PM ET
Fed Balance Sheet
4:30 PM ET