Posts by Rod David
Pre-close View… Least resistance. Also: Early Market Wrap
Today’s post-market Wrap is early at 3:45pm ET.
Sellers had an opportunity to take today’s market back down. Back down hard. Back down into yesterday’s range and lower. Sellers tried to take today’s market back down at the open. And they failed.
Pretty much ever since then price has extended higher. The open’s dip touched yesterday’s “lower prior highs” down to 1833.50 and reversed up to within 1 tick of 1855.50. Overbought RSIs there helped a reversal through the noon hour to hold the afternoon’s 1846.00 bias-down signal as support. And now 1860.50 was just touched.
Pretty good, huh?
And that’s what the rally can do with thinning participation, focused on illiquidity ahead of a three-day holiday weekend. Just imagine what it might do when volume returns next week, and more time is available to hold risk…
Yah, just imagine.
PROGRAMMING NOTE: TODAY’S POST-MARKET WRAP BEGINS EARLY AT 3:45PM ET. AND BEING A HOLIDAY WEEKEND, THERE IS NO SATURDAY REVIEW.
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))
Thursday’s gap up to fresh highs had not extended higher intraday. Friday’s gap down formed an Island-type pattern, which is not an Island, since it is land-locked. So, momentum may now reverse down without interruption.
Gold Feb Contract (GC, ETF: (GLD))
Thursday’s blow-off high didn’t extend its overnight reaction down Friday. Regardless, a pullback would require retesting Thursday’s opening print before a durable top could be considered.
Silver Mar Contract (SI, ETF: (SLV))
Having held its 15.80 target Thursday despite probing above it intraday, Friday’s sideways action helps to confirm that a lot of buying pressure was satisfied. But its 15.65 pullback limit held as support to keep alive momentum for at least retesting Thursday’ intraday high.
30-year Treasury Mar Contract (US, ETF: (TLT))
Still trending up in blow-off mode Thursday, Friday’s rally was no catalyst for extending higher in any flight-to-safety. Instead it allowed for testing “lower prior highs” so that another bounce can test Wednesday’s gap up and neutralize its attraction above. (I wonder what could be the catalyst for that?)
Crude Oil Mar Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
The 26.40 target was fulfilled Thursday. There remains room for noise below it to 25.63, which could be met on a retest since Friday’s gap up may be trying to begin forming a bottom.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Greeting Thursday’s EIA report from a position of weakness enabled the negative reaction to fill the gap back down to the week-old low close. Holding its test Friday doesn’t help to prove a bottom is forming, which only a rally at this stage can do — or a recovery from fresh intraday lows.
Look ahead: Economic Calendar – for Mon Feb 15, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: US markets are closed Monday for the President’s Day holiday. But futures open normally on Globex Sunday night and trade through the noon hour, before re-opening normally Monday evening.
US Holiday (Presidents Day)
Markets Closed
Globex close
1:00 PM ET
Globex open
6:00 PM ET
Afternoon Bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 1860.50 | 1855.50 |
| …would target | 1866.00 | 1861.25 |
| Bias-down: under | 1850.75 | 1846.00 |
| …would target | 1846.00 | 1841.00 |
| Signal status: LATE NO-BIAS, TESTED BIAS-DOWN 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… Not for lack of trying.
Sellers fail to retain control.
The pre-open reaction down from retesting the 1848.00 area extended down through the open. The upper-end of yesterday’s range was briefly pierced by a couple of tick in reaction to 10:00’s econ report. That’s essentially also this morning’s 1834.50 bias-up signal, which ultimately triggered at 10:15.
The 1041.25 bias-up target was attacked into 10:15, but not exceeded in time to renew the bias-up signal. No matter, this is still a bias-up environment. While that setup often holds as resistance for the morning, the open’s 1845.50 high is now being retested.
Triggering bias-up doesn’t necessarily reflect buyers regaining control when they’ve met and held a test of the bias-up target. It doesn’t marginalize sellers, although they’ve lost control. Exiting the bias environment at 11:30 back under its 1834.50 bias-up signal would suggest that sellers are trying to regain control. Exiting the bias environment above the 1845.50 opening high could simply drift higher into the afternoon.