Posts by Rod David
Daily Spot… Bonds — buy-bye?
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))
Friday’s reaction down from probing the 1.1265 bounce limit extended down Monday through the 1.1213 sell signal to put into play fresh lows targeting 1.1045 and potentially also 1.0900. A second consecutive lower close under 1.1190 would confirm.
Gold Dec Contract (GC, ETF: (GLD))
Extending its pullback to test 1130.00 Monday morning was quickly recovered back above 1133.50 to suggest the rubber band was snapping back up to resume the rally. But a second consecutive higher close didn’t confirm the breakout underway.
Silver Dec Contract (SI, ETF: (SLV))
Gapping up and extending sharply higher Monday now requires that pullbacks hold 15.55 to maintain the rally’s momentum.
30-year Treasury Dec Contract (US, ETF: (TLT))
After closing Friday while testing Thursday’s high, gapping down Monday within Friday’s range doesn’t require filling the gap back up to Friday’s close before extending down, which is suggested by closing under 157-24.
Crude Oil Nov Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Surging above 46.00 through Monday’s open attacked 47.00, but didn’t signal the trend breaking higher. The ongoing narrow consolidation remains vulnerable to breaking lower, initially targeting 42.80 and potentially probing last month’s lows.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
Monday avoided piercing any prior low and only ranged flat-to-higher. Early above 2.48 Tuesday would be credible for extending higher intraday, so long as 2.44 were to hold any test as support.
Mid-day Update… Nothing left up that sleeve.
Sponsorship to extend higher must make itself obvious soon.
Exceeding the 1960.00 objective has spent the morning trending higher. That doesn’t yet confirm a bigger rally is underway targeting a complete retracement of the August FOMC reaction’s 2011.75 high — but it’s a start.
Confirmation still could go a little further. Near-term, that would be to trigger this afternoon’s bias-up and extend higher so a late-afternoon drop has room to be absorbed reaction down. Or at the close, maintain the recovery above 1960.00.
Sponsorship for extending higher is needed. Because the morning’s rally has satisfied all other objectives that developed along the way: The structural requirement to probe above the open’s 1968.25 highs, the pattern’s likelihood to reject the shallow false break lower. Swing measurements targeting 1969.50.
Exceeding 1970.50 now should also trigger the 1968.75 bias-up signal at 1:20. Probably not back under 1966.50, and even less so under 1960.00.
Look ahead: Economic Calendar – for Tue Oct 6, 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Tuesday’s calendar is largely uneventful. Its most exciting entry comes a half-hour before the close with a Fed speaker.
International Trade
8:30 AM ET
Gallup US ECI
8:30 AM ET
Redbook
8:55 AM ET
4-Week Bill Auction
11:30 AM ET
3-Yr Note Auction
1:00 PM ET
Treasury STRIPS
3:00 PM ET
*John Williams Speaks
3:30 PM ET
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 1978.75 | 1968.75 |
| …would target | 1984.50 | 1974.50 |
| Bias-down: under | 1969.25 | 1959.25 |
| …would target | 1963.75 | 1953.75 |
| 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… Sellers seeing red.
Post-open action is all about extending the rally.
Opening at 1956.00 didn’t even hint at reversing down. And soon the hours-long consolidation was breaking higher to eventually attack 1967.00. Its reaction to news dipped down momentarily to 1962.00, and now fresh highs are testing 1968.00.
Any reaction down this morning is likely only temporary. That said, back under 1963.75 would target 1956.00. It would be easier to recover so long as its origin isn’t within view of the bias environment starting to lapse
CAVEAT: There has yet to be a close above the rally’s 1960.00 objective. And this morning’s complex uptrending will have fulfilled most requirements of Friday’s buyers having gained traction. So, delaying a break lower until this afternoon could be much more productive.