Posts by Rod David
Post-market Wrap (recording & summary)
It was like watching a basketball ride the rim in circles before momentum had finally allowed gravity to suck the ball through the hoop. The afternoon’s drop from 2004.50 down to 1988.25 was recovered back up to 2000.25.
Although post-close action extended up to 2002.00, the cash session’s last last-minute leg was a surge from 1995.50. So, closing slightly positive Monday was fulfilled.
That wasn’t the session’s likeliest scenario. It was the likeliest scenario to maintain a topping pattern. A topping pattern that should start trending back down already Tuesday afternoon or Wednesday morning.
The alternative is to resume the rally by Tuesday afternoon or Wednesday morning. There is no bullish or bearish reason to hover here for any longer.
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… Tracking almost perfectly.
Failed fresh highs maintaining the topping setup.
Attacking this afternoon’s 2004.75 bias-up signal to within 1 tick had reacted down quickly to 1995.25. The next half-hour ranged sideways around the 1997.50 bias-down signal.
Coming within view of the bias environment lapsing allowed the bias environment’s range to break. Which it promptly did, attacking 1988.00, where oversold RSIs have produced a bounce attacking 1993.00.
The topping setup doesn’t allow an overt attempt at trending down today. A slightly positive close at or above 1995.00-1997.50 would be optimal. Having gapped down, closing under the 1984.50 pre-open low would form a sort of pivot reversal which would also qualify. Either setup would be expected to start trending down Tuesday afternoon or Wednesday morning.
The potential topping would remain intact in case of a slightly lower close that is neither positive nor under the morning’s low. The schedule would become delayed while awaiting a higher close, another slightly higher close with a little more room above.
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 Monday wasn’t the appropriate resumption of the decline, despite Friday essentially having fulfilled the 1.0500 bounce target. Reversing back into positive territory now enables a probe under Monday’s low to extend down sharply.
Gold Apr Contract (GC, ETF: (GLD))
Friday’s test of the 1277.50-1288.00 target area’s lower-end leaves open potential for a more significant test, especially since Monday’s weakness didn’t extend.
Silver May Contract (SI, ETF: (SLV))
Friday’s fulfillment of the 15.70 gap outstanding above need not reverse down immediately, and may even try extending the rally next, as Monday’s weakness was shallow.
30-year Treasury Jun Contract (US, ETF: (TLT))
Flat ranging Monday didn’t threaten the 162-20 buy signal, but neither did it threaten to resume the decline that we’re assuming has ended.
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
The rally showed little sign of stopping Monday, and it actually accelerated to test 38.11. Back under 34.75 would signal momentum reversing down, with no shallower of an ultimate target than to retest the lows.
Natural Gas Apr Contract (NG, ETF: (UNG, UNL))
Probing intraday above the 1.70 buy signal Monday stopped sh0rt of attacking the 1.80 signal whose combined recoveries would launch a correction of the multi-week downtrend.
Mid-day Update… So far, so bad.
Topping pattern’s restraints are holding.
A shallow gap down that recovers back into positive territory (however high or shallow) that closes slightly positive. That’s the basic form for today’s session that would maintain the potential for topping.
Gapping down to test this morning’s 1986.00 bias-down target avoided triggering the 1992.50 bias-down signal. That has recovered into positive territory to within 1 tick of the afternoon’s 2004.75 bias-up signal.
And now that has reacted down to unchanged at 2005.00-2007.50 (Friday’s cash session and futures closes).
Closing around here would qualify as a slightly higher close, and maintain the potential topping pattern. That’s more than 2 hours away, so another bounce wouldn’t be surprising. Or a deeper dip that barely recovers.
Also possible is a close under 1984.50 pre-open low. While not a positive close, it would form a bearish Pivot Reversal bar — that could serve by proxy, so long as the lower close weren’t so much lower as to borrow future selling pressure.
Look ahead: Economic Calendar – for Tue Mar 8, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Nothing high-profile or influential to price action is scheduled among Tuesday’s econ reports. (Spoiler alert: Wednesday, too.)
NFIB Small Business Optimism Index
6:00 AM ET
Redbook
8:55 AM ET
4-Week Bill Auction
11:30 AM ET
3-Yr Note Auction
1:00 PM ET