Posts by Rod David
Post-market Wrap (recording & summary)
Two attacks no 1900.00 failed to break higher. Stopping pessimistically short of touching Friday’s prior highs suggests that any reaction down is only temporary.
So, reacting down into Tuesday’s final hour to 1988.00 is likely to recover. A late surge did recover up to 1997.00, but Crude Oil tumbling post-close has triggered 1988.00‘s retracement in sympathy.
Resuming the rally would next target 1913.00 and potentially 1924.00. Otherwise, while a deeper reaction down Wednesday is possible, extending any deeper would likely be only temporary.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 1905.00 | 1898.00 |
| …would target | 1911.25 | 1904.50 |
| Bias-down: under | 1894.25 | 1887.50 |
| …would target | 1888.00 | 1881.00 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET MET | 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.
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))
Tuesday’s flat open barely firmed through the session to range narrowly around Monday’s high. Any initial weakness remains likely to extend down to 1.0750-1.0785.
Gold Feb Contract (GC, ETF: (GLD))
Tuesday finally produced the long-required third higher close by gapping up and extending higher intraday to test 1122.00. A pullback has room down to 1114.00 to maintain the rally’s momentum targeting 1131.50. A second consecutive higher close Wednesday would create a new requirement for an additional higher close.
Silver Mar Contract (SI, ETF: (SLV))
Gapping up Tuesday and extending higher intraday confirmed that 14.10 is now support and the base that formed around it up to 14.35 is breaking higher.
30-year Treasury Mar Contract (US, ETF: (TLT))
Rallying to the 160-26 corrective bounce limit Monday night was retraced to test unchanged Tuesday. It was still premature for launching a new downleg, which was avoided by ranging choppily sideways despite a broad stock market recovery.
Crude Oil Mar Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Fresh reaction lows overnight to 29.25 were recovered to greet Tuesday’s open back at 30.45-30.95 resistance. Its recovery again triggered a rally up to 32.00, but this time with greater potential for extending higher to the 34.80 objective. The reaction to Tuesday’s API report should be duplicated Wednesday morning at the EIA report.
Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
Probing 2 cents above the minimum 2.20 buy signal was retraced before Tuesday’s open, and not repeated intraday. But neither was it rejected, which still suggests post-open strength can extend higher intraday.
Mid-day Update… Sooo close.
Bias-up triggered by attack on prior highs.
Rallying this morning was consolidated at 1888.00-1894.00. Resuming the rally at noon extended to attack 1899.50.
A dip to 1894.00 recovered enough to trigger the 1895.50 bias-up signal. That was extended to retest 1899.50.
But rather than extend up to the 1902.00 bias-up target, the retest of 1899.50 reacted back down to the 1895.50 bias-up signal. That dip has extended more than 2 points under the 1894.00 interim low.
The 1902.00 bias-up target can still become “unfinished business above.” But that requires recovering the bias-up signal’s 1894.00 last relative low at the 2:30 bias environment exit.
Nothing precludes the bias environment exit from simply collapsing. But coming back all this way from overnight lows just to attack prior highs does seem suddenly pessimistic — which is potentially bullish from a contrarian perspective.
Look ahead: Economic Calendar – for Wed Jan 27, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday afternoon’s FOMC policy statement tends to inhibit price action before the news. Not too much, though, since opinions are varied about how the Fed follows its recent rate hike. And that news should trigger much volatility in reaction.
MBA Mortgage Applications
7:00 AM ET
New Home Sales
10:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
2-Yr FRN Note Auction
11:30 AM ET
5-Yr Note Auction
1:00 PM ET
**FOMC Meeting Announcement
2:00 PM ET