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))
The correction of Thursday’s surge extended a little deeper Monday to attack 1.080, still having room down to 1.0750-1.0785 before resuming the rally.
Gold Feb Contract (GC, ETF: (GLD))
Monday’s pullback did not invalidate Friday’s rally, holding 1074.00 as support. Rallying early Tuesday would be credible for extending higher intraday.
Silver Mar Contract (SI, ETF: (SLV))
Friday’s rally wasn’t extended Monday, but neither was it rejected, confirming that a bottom has formed. Rallying early Tuesday would be credible for extending higher intraday.
30-year Treasury Jan Contract (US, ETF: (TLT))
Friday’s overly-aggressive bounce was duplicated Monday, already retesting last Wednesday’s range. Potential to probe fresh highs up to 156-12 remains intact, and no less likely, but not required if pullbacks can’t hold 154-14 as support.
Crude Oil Jan Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Last week’s retest of the $41 base down to $40 had yet to reverse up. Monday’s gap down exploited that delay, and extended down sharply to fresh lows at 37.50. A buy signal cannot be generated for Tuesday, but a second consecutive lower close would confirm a new downleg underway.
Natural Gas Jan Contract (NG, ETF: (UNG, UNL))
Monday’s open gapped down to and through last week’s 2.13 low, and later extended down to fresh lows at 2.06.
Mid-day Update… Settling in before bugging out.
Correction objective met, leading to consolidation.
This morning’s 2074.50 bias-down target was tested before bias-down was signaled. It was soon met, with plenty of time remaining in the bias-down environment.
More substantial corrective target attracted price down. The 2065.00 target was pierced by 2 ticks at the 11:30 bias environment exit. Its test reacted up 10 points to 2074.50 before noon.
It’s likely that the correction is fulfilled. But that doesn’t necessarily equate to reversing back up immediately. At least one timing window can be spent “backing-and-filling” or forming a more comprehensive pattern. Of course, a negative news headline could exacerbate the pullback, but not necessarily.
Backing-and-filling is simply vulnerable to becoming another downleg. Back above 2070.50 would launch a recovery. Meanwhile, this afternoon’s 2067.75 bias-down signal is now being tested down to 2066.00.
Look ahead: Economic Calendar – for Tue Dec 8, 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Will Tuesday’s JOLTS contradict Friday’s Employment Situation report? That’s really the only opportunity for the session’s econ reports to influence price action.
NFIB Small Business Optimism Index
6:00 AM ET
Redbook
8:55 AM ET
*JOLTS
10:00 AM ET
4-Week Bill Auction
11:30 AM ET
52-Week Bill Auction
11:30 AM ET
3-Yr Note Auction
1:00 PM ET
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2080.00 | 2078.25 |
| …would target | 2086.00 | 2084.50 |
| Bias-down: under | 2069.25 | 2067.75 |
| …would target | 2062.25 | 2060.50 |
| Signal status: NO-BIAS, TESTED 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.
Post-open Review… Walking it back.
Correcting Friday’s weak-handed upleg.
The origin of Friday afternoon’s rally leg had indicated that its sponsorship was weak-handed. That doesn’t prevent probing higher, but it does require its correction.
The minimum objective for a correction has been met, in the minimalist of ways. Potential to 2075.00 was attacked to within 1 tick.
The 2074.50 bias-down target has been met to within 3 ticks. It’s still an attraction, but won’t be considered “unfinished business” if never touched.
Meanwhile, the correction can extend down, whether to 2072.00, or to 2065.00 and potential also 2060.00. Exiting the bias environment back above its 2080.50 bias-down signal would suggest the correction had ended.
Late update: 2074.50 was just met. RSIs are diverging positively, but the corrective trend otherwise remains down.