Posts by Rod David
Post-market Wrap (recording & summary)
Monday’s final hour entry at 2098.50 was a relevant high. It was the product of errant ticks, its RSIs were overbought, and it immediately reacted down, and its pullback limit was almost violated. Then it was exceeded.
RSIs were overbought at the 2100.00 higher high, too.Its pullback limit was violated on the second probe under it. The cash session close dipped to 2096.00, and post-close action slipped further to 2094.00.
Overbought RSIs at the high require its retest, although RSIs were making lower highs. Buyers gaining traction suggests the high will be probed, as a reward for exiting the bias environment and entering the final hour at successively higher highs. Closing above 2088.00 puts into play new highs above 2134.00, so long as Tuesday doesn’t close back under 2088.00.
None of which requires extending higher without delay. But a dip must be deep — whether begun immediately or after initially rallying — if new highs are going to be avoided. As usual for this rally leg, a real durable reversal down would likely begin abruptly and aggressively. Any less initial bearishness would be likelier to resolve higher.
Details and other markets coverage are discussed in the post-market Wrap recording here:
https://roddavid10.mitel-nhwc.com/join/yptssht
This evening, monitor overnight Globex trading in the chaRTroom at:
non-xp ilinc
Pre-close View… And an important announcement.
Today’s market Wrap is a half-hour early at 3:30 ET.
This has been an easy session. We haven’t even considered a sell signal since before the morning’s bias environment was within view of lapsing. And then, it would have been only to catch a temporary shallow dip.
The setup has otherwise been fairly obvious, once Friday afternoon’s last relative low at 2076.00 had maintained its recovery. The rally’s 2088.00 objective was a likely attraction. But that was mostly only a formality on the way to retesting Thursday night’s 2094.75 high.
Which is now being probed by more than 3 points to 2098.25.
The origin of today’s rally wasn’t just its initial recovery of 2076.00. And it wasn’t even the immediate rejection of Friday’s last-minute plunge to 2069.50.
Extending down overnight to the morning’s 2064.50 bias-down target had the effect of fulfilling a lot of selling pressure. Recovering its 2071.00 bias-down signal had the effect of trapping it.
I note this origin because it is important to keep track of its sponsorship. Thursday’s highs aren’t being retested during a consolidation that developed upon its first reaction as stragglers bought in. To the contrary, Thursday’s highs are being retested by new sponsorship.
Today’s rally is not an extension — it is its own entity and it has yet to be corrected. Meanwhile, it is gaining traction by exiting the bias environment above the noon hour’s high and now also entering the final hour even higher. Both 1-minute and 3-minute RSIs are overbought simultaneously.
There is no requirement for a pre-close pullback, only the vulnerability. But gaining traction suggests either extending higher overnight, or else probing higher tomorrow morning.
Daily Spot… Resuming their trends.
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))
After Friday had maximized the corrective bounce potential, initially firming Monday did not extend and only ranged narrowly under Friday’s high. Retesting last week’s low is likely so long as 1.1100 isn’t recovered.
Gold Dec Contract (GC, ETF: (GLD))
Despite having held the 1138.50 pullback limit Friday, gapping down slightly to fresh lows extended intraday to 1132.50. A bounce can now test 1141.50 without reversing the trend up.
Silver Dec Contract (SI, ETF: (SLV))
Thursday’s breakout wasn’t confirmed Friday, but Monday’s open still gapped down and extended to 15.25, much further below the 15.85 buy signal.
30-year Treasury Dec Contract (US, ETF: (TLT))
Gapping down slightly Monday soon probed a couple of ticks under Thursday’s 155-21 prior low down to try resuming the decline.
Crude Oil Dec Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Several days of testing the 46.00 bounce limit may have begun resolving down with Monday’s weaker open. Momentum didn’t actually reverse down, but the recovery attempt cannot afford any further delay if it is valid.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
Closing above 2.31 Friday allowed a second consecutive higher close Monday above 2.37 to signal a new rally leg already underway. But the open gapped down and the session was spent consolidating within the recent range. Recovering 2.37 would still be bullish, but also needing a second consecutive higher close to confirm.
Mid-day Update… Catching up.
Bias-up target exceeded.
Exceeding this morning’s 2084.50 bias-up target through 10:15 would have renewed the bias-up signal. It wasn’t exceeded. It was still a bias-up environment and vulnerable to extending higher. But not likely.
In fact, higher and higher highs each reacted down, first to overlap 2084.50, and then to test it as support. Finally, it was attacked to within 2 ticks before entering the noon hour.
The bias environment has lapsed, and the noon hour is probing fresh highs up to 2090.00. Overbought RSIs are protecting against a durable reaction down. Anyway, o\ne more domino has yet to topple as described during the pre-open Tour — retesting Thursday night’s 2094.75 high.
Look ahead: Economic Calendar – for Tue Nov 3, 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Tuesday’s calendar has only one high-profile report (Factory Orders), but nothing with any track record for influencing price action.
Gallup US ECI
8:30 AM ET
Redbook
8:55 AM ET
Factory Orders
10:00 AM ET
4-Week Bill Auction
11:30 AM ET