Posts by Rod David
Pre-close View… prec·i·pice [pres-uh-pis] noun
Probing fresh post-open lows, and now the pre-open lows, too.
A couple of minor knee-jerk reactions to the FOMC Minutes ultimately stuck to this afternoon’s 1984.25 bias-down signal. It had been tested during the bias timing window long enough to avoid triggering, and the news didn’t break that mold.
But the clock did.
Already drifting 4 points back down to 1984.25 when the bias environment began lapsing at 2:30, suddenly selling appeared. The 1971.25 pre-open low is being touched just a half-hour later.
And now probed.
So, the bias environment’s 1984.25 exit was under the noon hour’s 1985.25 low. The final hour’s 1971.25 entry is under the bias environment’s 1980.25 low. The decline has gained traction, making tomorrow morning likely to probe lower, too.
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))
Still being likely to fill the gap back up to Monday’s 1.0855 close before extending the decline, Wednesday’s reaction to FOMC Minutes probed back above the decline’s original 1.0750-1.0785 target .
Gold Feb Contract (GC, ETF: (GLD))
Devaluing the Yuan Tuesday night spurred a surge through 1077.70, avoiding a close under 1070.50. A second consecutive higher close Thursday would confirm 1137.00 is in-play. That might be more difficult for having tested 1094.00 intraday Wednesday.
Silver Mar Contract (SI, ETF: (SLV))
Wednesday’s early surge was retraced as quickly as it had developed, and never extended higher intraday despite Gold’s rally.
30-year Treasury Mar Contract (US, ETF: (TLT))
Another stock market plunge overnight reasserted the flight-to-safety, With an overnight retest of Monday’s 155-14 highs, probing higher intraday up to 155-19. Closing back under 154-16 would confirm the bounce had held.
Crude Oil Feb Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Dipping to the 36.00 line in the sand Tuesday resolved down sharply overnight to open Wednesday gapping down under 35.00 and extending intraday under 34.00 on the EIA report.
Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
Still ranging between higher and lower gaps, Thursday’s EIA report is being greeted from a position of strength. But not from momentum, so the bullish scenario would react down initially — perhaps as low as 2.14 — before reversing up more substantially.
Mid-day Update… Waiting on another shoe.
Morning’s recovery has stalled.
Quickly surging through 1978,50 extended to within 3 ticks of this morning’s 1996.00 bias-down target. First dipping to 1973.75 would have been rewarded by a 1998.00 target. So, no big deal.
Except…
Dipping first and extending higher would have laid two bullish eggs: First, the deeper dip would have expended more selling pressure, while vesting more buyers with an interest in defending against reactions down. Second, extending higher would have created more room for absorbing a pullback without it gaining traction.
Stated another way, rallying immediately at the open was optimistic. Having extended higher into the bias environment lapsing, literally as much buying pressure as could be expended for as long as it could be expended, without that optimism gaining traction for its effort.
Triggering this afternoon’s 1984.25 bias-down signal could open the door to much greater selling as the afternoon progresses. The only reliable bullish scenario at this stage would be to avoid triggering bias-down.
Look ahead: Economic Calendar – for Thu Jan 7, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Hey, they’re still around! The first speech from a Fed speaker since mid-December is Thursday afternoon. It follows closely on the heels of the prior day’s release of FOMC Minutes, which the market is examining for the thinking on further rate hikes.
Challenger Job-Cut Report
7:30 AM ET
Jobless Claims
8:30 AM ET
Gallup Good Jobs Rate
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
EIA Natural Gas Report
10:30 AM ET
*Charles Evans Speaks
2:15 PM 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 | 2004.00 | 1996.00 |
| …would target | 2009.50 | 2001.50 |
| Bias-down: under | 1992.25 | 1984.25 |
| …would target | 1986.50 | 1978.50 |
| Signal status: noN-BIAS, STILL TESTING 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.