Posts by Rod David
Post-market Wrap (recording & summary)
The final hour’s accelerated pace met 1869.00 as the 3:37-3:52 position-squaring window opened. Its support was still being tested as the window closed. Persistently oversold 3-minute RSI had left oversold territory, diverging positively on the 1868.00 low’s retest.
That’s a long way down from exiting the noon hour at 1895.00, or testing 1904.00 Sunday night. But it’s Wednesday’s recovery high, which had extended higher Thursday and Friday. And so long as 1869.00 holds as support, the recovery can still resume to probe 10-15 points above Sunday night’s high to 1915.00-1920.00.
But Monday afternoon’s decline gained traction, so avoiding fresh lows Tuesday morning requires gapping up — a lot. Gapping up a little would still be likely to probe under Monday afternoon’s lows, under 1869.00. But so long as 1856.00 doesn’t break during lower, the corrective bounce could still be productive.
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…Recovery undermined.
Back to the recovery’s original attraction.
Last Wednesday’s stunning intraday reversal had recovered from sharply lower lows testing 1804.00 back up to test 1869.00.
Trying to extend higher Thursday had netted no gain. Friday’s gap up netted no gain through its close, either, after testing 1902.00.
Now this morning’s slide has rejected a noon hour bounce to resume the slide… back down to 1869.00. That’s some recovery, once again no higher than within minutes of at its first close.
Sellers gained traction, making lower lows likely Tuesday, unless the open were to gap up enough. Regardless, no gapping down today still suggests the later selling is counter-trending.
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 slightly Monday without yet probing back into the 1.0750-1.0785 range suggests that buyers are impatient. The “ineffectual optimism” is potentially bearish from a contrarian perspective, but should attract new sponsorship Tuesday to extend the bounce any higher if the decline remains intact.
Gold Feb Contract (GC, ETF: (GLD))
Gapping up above 1100.00 did what Friday’s session could have, which suggests that buyers are patient. That’s potentially bullish from a contrarian perspective, but it doesn’t allow any further hesitation beyond Tuesday’s open to extend higher and to produce the outstanding minimum required third higher close — probably more than a third higher close, considering the extended interim pullback.
Silver Mar Contract (SI, ETF: (SLV))
Gapping up from Friday’s recovery to 14.10 now makes 14.10 support. It also allows no hesitation or at least only brief pullback before extending higher Tuesday to confirm Monday’s breakout. Otherwise, the next dip would be unusually likely to trend down below the current basing range.
30-year Treasury Mar Contract (US, ETF: (TLT))
Gapping up Monday only ranged around 159-26 without either extending higher or reacting down. The pattern’s “ineffectual optimism” suggests that Friday’s pullback low will be retested before a more substantial rally would become likely.
Crude Oil Mar Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Trending back down Sunday night prevented confirming Friday’s surge as a breakout, while failing to recover back above the 30.95 resistance that had triggered Friday’s surge.
Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
Initially gapping down Monday attacked last week’s lows down to 2.08 before recovering up to 2.17. But 2.21 must be recovered to launch a rally leg.
Mid-day Update… Getting ready to rumble.
Morning’s dip recovered, but not reversed.
This morning’s 1885.75 bias-down target was met easily this morning, but not until the first hour had lapsed. A knee-jerk reaction to the Dallas Fed survey got out of the way, and fresh lows were soon probed down to 1881.75.
Recovering into and out of the noon hour up to 1895.50 failed to trigger the 1893.75 bias-up signal. Consolidating there formed a Head & Shoulders that is now breaking lower aggressively to 1887.50.
Back above 1891.50 would signal the dip had been absorbed and reversed, probably to probe above the 1904.00 overnight high. Failing to hold 1986.25 as support would suggest a retest underway of this morning’s lows.
Look ahead: Economic Calendar – for Tue Jan 26, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Tuesday morning’s calendar is busy. Reactions to the earliest reports is likely to repeat in reaction to later reports. The afternoon usually avoids trending ahead of post-close AAPL earnings.
Redbook
8:55 AM ET
FHFA House Price Index
9:00 AM ET
S&P Case-Shiller HPI
9:00 AM ET
*Consumer Confidence
10:00 AM ET
Richmond Fed Manufacturing Index
10:00 AM ET
State Street Investor Confidence Index
10:00 AM ET
4-Week Bill Auction
11:30 AM ET
2-Yr Note Auction
1:00 PM ET