Posts by Rod David
Post-market Wrap (recording & summary)
The bias environment began lapsing by probing fresh session lows down to 1821.75. That was short-lived. Despite the position of weakness, the last hour rallied back up through the decline’s 1825.75 target to probe the open’s 1850.00 high up to 1855.00.
Not bad.
Its reaction down to 1844.00 barely began firming by the cash session close. But it was largely retraced after the close, attracted to retest the 1855.00 high whose RSIs were overbought.
Buyers didn’t gain traction for the late effort. So, extending higher Tuesday requires gapping up, preferably back above Friday’s 1866.00-1868.00 “higher prior lows.”
Regardless, it’s still not a durable bottom. And it’s for the same reason as the nearly three-week old 1805.00 low, which also magically recovered that afternoon from having substantially extended a deep gap down. Neither session represents capitulation
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 1856.75 | 1850.75 |
| …would target | 1862.25 | 1856.50 |
| Bias-down: under | 1845.75 | 1840.00 |
| …would target | 1840.50 | 1834.50 |
| Signal status: LATE NO-BIAS, TESTED BOTH BIAS-DOWN AND BIAS-UP PARAMETERS | 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.
Pre-close View… Bottomed out?
Rallying out of the final hour’s lows.
The bias environment exit trended down to fresh lows at 1821.75. The bias environment was not exited above a prior high. The final hour’s entry didn’t recover a prior high. No short-squeeze setup has formed.
Yet, the 3:10-3:20 window rallied to 1839.25.
That shouldn’t happen if the pattern is resolving down today. It’s getting too late both to absorb the bounce and to reject it. Had the rally originated earlier, then the 17-point rally could be 3 times that, and not required to fail. But this late timing is very suspicious.
Meanwhile, RSIs are overbought at the high. So, regardless of the likelihood for ultimately resolving down, reversing down now would be unlikely to extend — not without first retesting the overbought highs.
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))
Friday’s dip has stopped optimistically short of filling the gap back to Wednesday’s 1.1095 close, but Monday’s gap down came within 1 pip before reversing up into positive territory above 1.1200, potentially on the way to fulfilling the outstanding minimum higher close.
Gold Feb Contract (GC, ETF: (GLD))
Friday’s post-close extension higher wasn’t retested Sunday night until nearing Monday’s open, and then it extended sharply through it to nearly fulfill upside potential at 1203.00 compensated for the delay. Now a pullback has room down to 1185.00-1186.00 before signaling the rally’s momentum has lapsed.
Silver Mar Contract (SI, ETF: (SLV))
Having held its pullback limit last week, the upside momentum remained intact for at least testing the bottoming pattern’s 15.45 target. Now pullbacks must hold tests of 15.30 to keep alive the upside momentum.
30-year Treasury Mar Contract (US, ETF: (TLT))
Plunging stocks triggered a flight-to-safety that surged through last week’s 164-07 high to test resistance at 165-28. Now holding 165-08/165-12 avoids signaling the rally’s resumption has failed (albeit pretty successful in the interim).
Crude Oil Mar Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Lower lows Sunday and Monday were still range-bound, although last week’s test of the 29.42 pullback limit was attacked. But just closing under 29.55 would target fresh lows at 27.40..
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Gapping up overnight and testing 2.17 was retraced to at least attack 2.10, near enough to “lower prior highs” that extending higher intraday Tuesday could confirm the recovery without leaving “unfinished business below” to inhibit further rallying.
Look ahead: Economic Calendar – for Tue Feb 9, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Tuesday’s Jobs Openings report is a follow-up to Friday’s payrolls. Its surprise quotient is derivative of its confirmation or contradiction to the low payrolls report.
NFIB Small Business Optimism Index
6:00 AM ET
Redbook
8:55 AM ET
*JOLTS
10:00 AM ET
Wholesale Trade
10:00 AM ET
4-Week Bill Auction
11:30 AM ET
3-Yr Note Auction
1:00 PM ET