Posts by Rod David
Pre-close View… Just another day.
Plunge to new lows recovers into positive territory.
Rejecting tests of one set of bias parameters and exceeding the other set — all by 10:15 — reflects substantial sponsorship. So does extending another 20 points. That’s what this morning’s open did, from 1910.75 down to 1865.00.
Oversold RSIs at the low require an eventual retest (which would target 1862.75), so we know those sellers aren’t done. But they’ve taken a break, as the afternoon bias environment exit tests 1902.00.
This short-squeeze could be the beginning of a bigger recovery back up to 1924.00 or higher. That, or like the overnight rally, sellers have been refueled for yet another drop to fresh lows.
Back under 1895.00 would start to signal another downleg underway, regardless of how productive it might be before the close. But extending the recovery above 1903.00 would rally through the close.
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 up through 1.0950 resistance Wednesday confirmed the recovery above 1.0900 had ended the potential for retesting recent lows. Extending through downtrending resistance rallied sharply to 1.1156, testing “higher prior lows” at 1.1140. Upside momentum remains intact so long as 1.1065-1.1090 holds as support.
Gold Feb Contract (GC, ETF: (GLD))
Wednesday’s break above the rally’s minimum 1131.50 target extended to test its maximum 1141.00 target above 146.00. Back under 1133.50 would signal the extension had failed to gain traction.
Silver Mar Contract (SI, ETF: (SLV))
Early strength Wednesday finally extended through the 14.35-14.40 resistance to launch the next upleg, already testing 14.80.
30-year Treasury Mar Contract (US, ETF: (TLT))
Fulfilling the 162-26 target Tuesday didn’t prevent probing higher post-close, overnight, or Wednesday, all the way to 164-07. But testing 164-07 didn’t prevent reacting back down to 162-26, which suggests its higher highs are only more recent weak-handed buying pressure. But reversing the trend down still requires dropping under 161-26.
Crude Oil Mar Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
The 29.45 pullback limit was tested overnight before Wednesday’s flat-to-higher open that extended higher intraday to attack 32.50. Closing any higher would signal a retest of 34.80 up to 37.20.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Overnight weakness was recovered Wednesday to firm intraday, but Thursday’s EIA report is still being greeted from a position of weakness.
Look ahead: Economic Calendar – for Thu Feb 4, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Despite some being high-profile, none of Thursday’s econ reports are have a track record for influencing price action. That said, it is the last day for econ reports that hint at Friday’s payrolls report, and the potential reaction to it.
Challenger Job-Cut Report
7:30 AM ET
Jobless Claims
8:30 AM ET
Productivity and Costs
8:30 AM ET
Gallup Good Jobs Rate
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
Factory Orders
10:00 AM ET
EIA Natural Gas Report
10:30 AM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET
Afternoon Bias
| WED afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 1902.00 | 1895.00 |
| …would target | 1908.50 | 1901.50 |
| Bias-down: under | 1884.00 | 1877.00 |
| …would target | 1878.00 | 1871.00 |
| Signal status: NO-BIAS | 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… You don’t see that every year.
From both bias-ups through both bias-downs.
The pre-open high touched this morning’s 1910.75 bias-up target just 10 minutes before the open. Its reaction down quickly fell under the 1904.50 bias-up signal. Rejecting tests of both bias-up parameters through 10:15 would put into play offsetting tests of both bias-down parameters.
But, wait, there’s more.
The 1890.75 bias-down signal and 1885.50 bias-down target were tested, too. And exceeded through 10:15 to renew the bias-down signal. That has been exceeded by another 20 points down to 1865.00.
Substantial selling pressure is required to reject tests of both bias-up parameters and to trigger both bias-down parameters. This is very unusual activity, so be prepared for almost anything.
Persistently oversold 3-minute RSI has ended with a bounce above 1874.25. That put into play a test of this morning’s 1885.50 bias-down, which is now met to within 3 ticks.
Simultaneously oversold 1-minute and 3-minute RSIs at the low require its eventual retest. Back under 1876.00 and 1872.25 would signal that leg underway, targeting 1862.75.