Posts by Rod David
Pre-close View… Here come the towels.
Bias environment lapsing, buyers hesitating.
The bias environment’s entry was a test of its 1996.00 bias-up signal, which did not trigger. The bias environment twice more bounced to test 1996.00, which was too late to trigger.
Now, when trending up is again allowed, the market is scraping fresh afternoon lows attacking 1987.00. My nearest buy signal is triggered above 1993.50. Even it is suspicious at this stage of trending down instead of up.
This morning’s low was as much a product of bottom fishers and knife catchers, as of running out of sellers. Now entering the final hour under the opening print, speculative buyers are likely flattening out, while inhibited sellers are getting more accepting of the new valuations.
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))
Initially bouncing Monday didn’t prevent ultimately reversing down and extending to fresh lows, nearing the long-standing 1.7050-1.7085 pullback target.
Gold Feb Contract (GC, ETF: (GLD))
Sunday night’s rally held 1074.00 resistance but Monday’s open trended through it to also probe above 1077.70. Testing both intraday required closing above both to signal a new upleg underway. Closing back under 1070.50 would have signaled its failure, targeting 1039.00-1041.00 . Their reaction down held 1070.50, ending the day overlapping 1074.00, not signaling the next leg in either direction.
Silver Mar Contract (SI, ETF: (SLV))
Gapping up to probe above 14.10 was rejected by closing the gap back down to last week’s close under 1385. Closing above 14.10 is still the minimum buy signal to avoid new lows.
30-year Treasury Mar Contract (US, ETF: (TLT))
No unfinished business is outstanding below, only making it easier for a “flight-to-safety” up to 155-14 while stocks crashed. But closing back under 154-16 would trigger a new downleg.
Crude Oil Feb Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Early strength Monday seemed muted compared to the headlines behind it. Despite soon probing back above 38.00, the gains were reversed back down to 36.33 intraday — negative territory but still holding uptrending support.
Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
Narrow ranging maintained the recent recovery’s gains, instead of reacting down after having filled the gap up to last Tuesday’s close.
Mid-day Update… The two meanings of “done.”
Noon hour bounce trying to position for afternoon surge.
This morning’s 1980.25 low fulfilled the pattern’s structural requirement for a fresh low triggered under 1989.00. That was short of its potential, but exiting the bias environment above a prior high could still trap shorts.
The bias environment wasn’t entered above a prior high. Not when it began lapsing and not by noon.
The noon hour has rallied. It fulfilled a 1997.00 target that was triggered above 1990.25. But the 1996.00 bias-up signal ultimately avoided triggering.Now a dip to 1992.00 is trying to regain its footing.
Fresh highs above 1998.00 would suggest the decline is done for now. But triggering any buy signal during a no-bias environment is suspicious and unreliable. Hovering up here for a half-hour and THEN surging would be more credible for extending higher.
Alternatively, back under 1990.25 would start to signal the recovery is done. Structurally, it could be satisfied by only a fresh low. But defending against fresh lows is difficulty while exiting the bias environment, which would be the likely timing.
Look ahead: Economic Calendar – for Tue Jan 5, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Tuesday’s calendar is devoid of any report with a track record of influencing price action. But the week gets busier…
Gallup US ECI
8:30 AM ET
Redbook
8:55 AM ET
4-Week Bill Auction
11:30 AM ET
52-Week Bill Auction
11:30 AM ET
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2005.25 | 1996.00 |
| …would target | 2010.50 | 2001.25 |
| Bias-down: under | 1991.25 | 1982.00 |
| …would target | 1983.75 | 1974.50 |
| Signal status: NO-BIAS, TESTED BIAS-UP 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.