Posts by Rod David
Post-market Wrap (recording & summary)
Topics that I intended to cover in this post-close note included the unfinished business above at the 2048.75 high’s overbought RSIs. But that was neutralized by extending past the 2046.00 cash session close to fresh session highs. So, scratch that…
Another topic I wanted to cover is the next higher objective above 2019.50. More than a week of ranging around it and overlapping it — even labeling Wednesday’s plunge as just testing the range’s lower-end — had prevented putting into play the next higher objective at 2055.00. But post-close action just met it. Soooo, scratch that one…
We should remember the recent range’s characteristic of surging, and then reversing down sharply as soon as the surge has peaked. Has this surge peaked? Simultaneously oversold 1-minute and 3-minute RSIs at Thursday afternoon’s 2034.50 low… wait, let me check… still requires an eventual retest.
Often, the session-long rally/decline setups extend the following morning. Since Thursday afternoon’s buyers didn’t gain traction for their efforts, probing higher without gapping up would be vulnerable to reversing down sharply. Otherwise, overcoming those challenges and closing above 2055.00 would next target 2088.00.
Details and other markets coverage are discussed in the post-market Wrap recording here:
https://roddavid10.mitel-nhwc.com/join/jrcsmxt
This evening, monitor overnight Globex trading in the chaRTroom at:
non-xp ilinc
Pre-close View… Tanned, rested and already recovering.
Timing window requirements in effect.
The afternoon bias environment was the exception. It did not probe the prior timing window’s high. It wasn’t required to trend down, but it did. A sell signal triggered under 2044.75 to within 2 ticks of its maximum pullback potential at 2034.50.
Any lower would have measured too much for being only a temporary pullback. Which is why we knew it would hold, because of the “unfinished business above.”
The session-long rally template that now requires the final hour to probe above the bias environment’s 2047.75 high. And overbought RSIs at the 2048.75 high require its retest. Back above 2044.00 would resume the rally into the close.
The rally resumed pretty quickly, already coming to within 3 points of the high at 2046.00. Consolidating there formed a Head & Shoulders that is now reacting down to 2041.25. The drop could extend to 2039.25 before fresh session highs become unlikely.
Daily Spot… Euroooooooh.
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))
The potential for resuming its rally was overcome by the vulnerability to extending its decline. Two prior sessions of hovering optimistically short of filling its gap back to Friday’s close didn’t help to absorb Thursday’s bearish ECB news. Room for noise down to 1.1300 was easily exceeded on the way to a prior low at 1.1140. Closing above 1.1180 would signal the drop was only a one-day wonder.
Gold Dec Contract (GC, ETF: (GLD))
Narrow ranging Thursday morning around the 1165.50 pullback limit that had held already Tuesday doesn’t prevent resuming the decline, but it does give confidence to a more aggressive buy signal than 1180.00, triggered above 1173.50.
Silver Dec Contract (SI, ETF: (SLV))
Thursday’s gap up tested 15.85 which helped to reject Wednesday’s dip under it. Closing any higher Friday would be credible for launching a new upleg to fresh highs.
30-year Treasury Dec Contract (US, ETF: (TLT))
Wednesday’s maximum bounce limit test had reacted down initially Thursday, but another upleg probed higher above 159-00 into Thursday afternoon. Back under 158-10 would resume the drop.
Crude Oil Dec Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Thursday’s gap up was retraced entirely back down to Wednesday’s low, in-line with the momentum reversal underway, which remains intact so long as bounces hold any test of 46.85.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
Thursday’s reaction to the EIA report probed a fresh low at 2.36 before bouncing to test Wednesday’s 2.38 low. This is still not a bottoming pattern, but there is no lower target in-play.
Mid-day Update… Give it a rest, already.
Still no counter-trend timing window.
This afternoon’s bias signal will trigger in more than a half-hour at 1:20. Its 2046.50 target is being tested now by more than 2 points. Entering the bias environment above its target would renew the bias-up signal. Continuing this behavior could fulfill the rally’s next higher objective at 2055.00 today.
Relentless trending is unusual. Also unusual is for the “session-long rally” setup to print fresh highs during the noon hour. One timing window should rest, if not also retrace. Now only two timing windows remain: the afternoon bias environment and the final hour.
Simultaneously overbought RSIs suggest that reacting down here would recover. A pullback during the bias environment would suggest that the final hour will probe new highs, and possibly trend up through the closing ticks. But a pullback and recovery BOTH during the bias environment would make the final hour vulnerable to reversing down.
Look ahead: Economic Calendar – for Fri Oct 23, 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s post-open PMI report has a spotty track record for influencing price action. It’s the morning’s only report, so any outlier data can have a greater effect on price action.
*PMI Manufacturing Index Flash
9:45 AM ET
Baker-Hughes Rig Count
1:00 PM ET