Posts by Rod David
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 Dec Contract (EC, ETF: (FXE, UUP))
Without rejecting Tuesday’s gap up from the two prior days of firming, the 1.0750-1.0785 corrective target is in jeopardy. Tuesday’s high did peak upon filling the gap back to the 1.0995 close, giving Wednesday’s open a brief opportunity to resume the slide.
Gold Feb Contract (GC, ETF: (GLD))
Dipping into Tuesday’s open ended the day overlapping the 1074.00 pullback limit. Immediately recovering 1077.70 Wednesday would be credible for extending higher intraday.
Silver Mar Contract (SI, ETF: (SLV))
Two consecutive closes at the 14.10 and 14.35 buy signals respectively still need an actual breakout close to confirm new sponsorship is being attracted to the recovery attempt.
30-year Treasury Jan Contract (US, ETF: (TLT))
Monday’s attack on the 157-04 buy signal was rejected more deeply Tuesday to attack the 154-30 reversal signal to within 3 ticks.
Crude Oil Feb Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Monday’s “ineffectual pessimism” resolved up with little delay Tuesday, still needing a close above 36.75-36.90 resistance to signal a new rally leg underway.
Natural Gas Jan Contract (NG, ETF: (UNG, UNL))
The pullback from Monday’s negative divergences attacked its 1.85 pullback limit but didn’t trend down. The gap back to Monday’s close was filled, neutralizing its attraction above, so trending up anyway early Wednesday would be credible for extending higher intraday.
Mid-day Update… No holding back the holiday cheer.
Post-open slide’s recovery is probing higher.
The pre-open premature break up to 2024.00 had become a false break. Occurring just 15 minutes prior to the open instead of at the open made all the difference between attracting new sponsorship or repelling it. The reaction fell to 2011.00.
But the 2015.00 bias-down signal avoided triggering, and the balance of the bias environment firmed to attack its bias-up target to within 1 tick at 2022.00. The noon hour firmed to probe a fresh high at 2025.00.
That’s quite a bit above the 2006.00-2007.00 line in the sand which would reinstate the attraction back to Friday’s 1991.00 low. And it’s already quite a bit closer to the 2027.00 potential upside.
Getting too far ahead of the seasonal holiday bullishness too early? A preemptive dip to test 2017.50 would help to preserve the upward trending.
Otherwise, the risk is stretching the rubber band, either to surge through the range’s 2027.00 upper-end, or else inverting back down to the range’s 2006.00-2007.00 lower-end.
Look ahead: Economic Calendar – for Wed, Dec 23, 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday’s Durable Goods is both high-profile and influential to price action. Home Sales might get a reaction if it is very contradictory to Tuesday’s two housing sector reports. The post-open Consumer Sentiment is usually reliable for triggering a reaction.
MBA Mortgage Applications
7:00 AM ET
*Durable Goods Orders
8:30 AM ET
Personal Income and Outlays
8:30 AM ET
New Home Sales
10:00 AM ET
*Consumer Sentiment
10:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
2-Yr FRN Note Auction
11:30 AM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2031.50 | 2022.25 |
| …would target | 2037.00 | 2027.75 |
| Bias-down: under | 2020.50 | 2011.25 |
| …would target | 2015.25 | 2006.00 |
| Signal status: waiting for trigger | 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… Tempering the enthusiasm.
Pre-open surge steals post-open thunder.
The overnight slide from 2023.25 to 2007.25 had recovered to form a Rising Wedge. Any post-open strength from the pattern would have been credible to extend sharply higher.
But a pre-open surge to 2024.00 fulfilled the 2022.25 bias-up target and inhibited post-open sponsorship. Reacting down became likelier, and the open extended down to 2011.50.
Both bias-up parameters had been tested, and both almost rejected, except the grace period was invoked. Dropping to 2010.75 recovered the 2015.00 bias-up signal in time to trigger late. Its recovery has extended to 2019.25. Extending higher could reach 2027.00 just as noise around the open’s range.
Having already met the 2022.25 bias-up target, its retest isn’t required. Having triggered late bias-up, sellers aren’t marginalized. Back under the 2015.00 bias-up signal by 2-3 ticks would be credible for reversing momentum down. The window for retesting Friday’s 1991.00 low is rapidly shrinking.