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 Sep Contract (EC, ETF: (FXE, UUP))
Gapping up Tuesday left no unfinished business below since Monday’s close was within the prior range. Extending higher Wednesday would help to confirm a bottom is still forming.
Gold Dec Contract (GC, ETF: (GLD))
Tuesday’s gap up isn’t enough to undermine the downward momentum, which requires closing above 1082.00.
Silver Dec Contract (SI, ETF: (SLV))
Monday’s gap down under all prior lows to 13.97 requires being retested as support before a rally would be credible. So, Tuesday’s gap up allows filling Monday’s gap to be recovered into a rally leg.
30-year Treasury Dec Contract (US, ETF: (TLT))
Initially extending Monday’s recovery made the rally doubly dependent on closing higher Tuesday to confirm the breakout is valid. Reacting back down into negative territory undermines the recovery.
Crude Oil Jan Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Reacting up Tuesday on the Russian fighter jet downing is as valid as any other surge for forming a bottom, so long as it is confirmed by a second consecutive gain — if not also a surge — Wednesday.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
Gapping down Tuesday to retest Friday’s low and recovering back to unchanged can now begin to form a bottom, but only so long as any probe of fresh lows intraday is recovered to close positive. Any initial strength Wednesday would be credible for extending higher intraday.
Look ahead: Economic Calendar – for DayMonNo, 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: The holiday-shortened week sees Wednesday doubling-up on many reports. Several are high-profile, but only two have a reliable track record of influencing price action. The first is pre-open Durable Goods. Second is the post-open Consumer Sentiment, which comes on the heels of Thursday’s big miss in Consumer Confidence. As an aside, keep in mind that trending in reaction to an early report is often duplicated in reaction to later reports. Also note that volume will start to evaporate after the noon hour, if not before, with holiday travel taking precedence for many participants.
MBA Mortgage Applications
7:00 AM ET
*Durable Goods Orders
8:30 AM ET
Jobless Claims
8:30 AM ET
Personal Income and Outlays
8:30 AM ET
FHFA House Price Index
9:00 AM ET
PMI Services Flash
9:45 AM ET
Bloomberg Consumer Comfort Index
9:45 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
7-Yr Note Auction
11:30 AM ET
EIA Natural Gas Report
12:00 PM ET
5-Yr Note Auction
1:00 PM ET
Mid-day Update… A little too right.
The dive was exacerbated, but its recovery is a little much.
I’ve reiterated several reasons why the overnight plunge was exacerbated. Not that it couldn’t extend deeper intraday — today is the last day for correcting the recovery before holiday bullishness appears. But regardless of its depth or duration, today’s sellers would be trapped.
Already, that seems to be obvious. A little too obvious, a little too quickly.
After rejecting the open’s rally from 2078.50 back down to 2067.00, the minimum requirement for suggesting sellers were done was to exiting the bias environment above 2072.50. The bias environment began lapsing at 2077.00.
Then, the minimum requirement to keep price action trading flat-to-lower was to hold 2080.50 as resistance. The noon hour was entered at 2082.50. This brings the session back to unchanged.
Regardless of its current upward momentum, rallying this afternoon still seems very premature. Back under 2080.50 would start to signal a dip back down to 2074.75 or 2072.50. Bias-up above 2082.50 at 1:20 would nevertheless get every benefit of the doubt.
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2085.25 | 2082.50 |
| …would target | 2090.50 | 2088.00 |
| Bias-down: under | 2079.50 | 2077.00 |
| …would target | 2074.50 | 2071.75 |
| Signal status: BIAS-UP | 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… Get used to it.
Pre-open bounce finds post-open sellers. Eventually.
Opening at 2071.50 was already 4 points off the most recent pre-open low. But it was still far short of the 2077.75-2079.00 resistance described during the pre-market Tour as differentiating between temporary bounce or continuing the drop.
The opening 15 minutes of volatility came within 3 ticks of 2079.00 before peaking. Its reaction down finally got underway, and has made up for lost time by retracing all of the pre-open low down to 2067.00.
The plunge’s 2065.50 low can be retested, too, and probably by a wide margin. This is Tuesday of Thanksgiving week, and sellers can control it all. Back above 2072.75 would be the minimum requirement to even begin considering they’re done.