Posts by Rod David
Pre-close View… Island ho?
The bullish scenario emerges.
The 1918.00 objective was barely touched as the afternoon’s bias environment got underway. The bias environment back-and-filled up to 1924.00 repeatedly. The next hour widened its range, but not its action.
Then the last half-hour was finally squeezed. Surging from 1924.00 to 1935.00 is now probing into the open’s range. Closing within it would form a potential Island, and gapping up Wednesday above 1938.00 would seal a near-term low.
Participation will be thin due to Yom Kippur worship. Trending after not gaining traction intraday depends upon gapping open in one direction or the other. Since the break under 1938.00 is ending where it began, its rejection would be more able to trend than would gapping down.
Daily Spot… Reacting to stocks.
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 had extended Monday to form a breakout under uptrending support. Extending lower overnight to gap down Tuesday then also extended down intraday. At least an eventual third lower close is required before the pattern can begin bottoming.
Gold Dec Contract (GC, ETF: (GLD))
Modest firming overnight was rejected sharply into and out of Tuesday’s open to test 1120.50. The pullback limit was violated, so back above 1134.00 is needed to begin signaling the pullback has ended.
Silver Dec Contract (SI, ETF: (SLV))
Gapping down sharply Tuesday from Monday’s overlap of its 15.10 pullback limit spent the day ranging narrowly around 14.65. There is no buy signal.
30-year Treasury Dec Contract (US, ETF: (TLT))
Monday’s pullback to support at 153-12 reacted up sharply to 154-17 Tuesday in a flight-to-quality which extended as stocks fell apart to probe Friday’s high above 156-00. The gap back to Monday’s close should be filled before a durable rally can begin.
Crude Oil Nov Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Gapping down Tuesday to 45.65 failed to confirm Monday’s close above 45.65. Only ranging narrowly prevented any signal from triggering, but the upside continues to be suspect.
Natural Gas Oct Contract (NG, ETF: (UNG, UNL))
Still ranging narrowly under prior lows Tuesday prevents a bottoming pattern from yet forming.
Mid-day Update… Circling.
Attraction below, repellent above.
[Click here for tomorrow’s Econ Calendar]
The bias environment’s 16-point slide down to 1920.50 has been retraced by 61.8% up to 1930.00. That’s the noon hour’s high, so far. That bounce peaked early in the noon hour, reacting down since then to 1924.00, so 1930.00 is the noon hour’s high, probably.
I’m making a big deal about 1930.00 being — or, not being — the noon hour’s high, because it might determine probing fresh session lows today. Just attacking the noon hour high above 1928.75 would start to target 1931.50, this afternoon’s bias-up signal. Triggering it could marginalize sellers for the delay.
Regardless, the pattern since this morning’s low is not accumulative. So, any rally it might launch would be likely to fail. Extending down this afternoon to fulfill the 1918.00 objective could at least coincide with the end of artificial pre-Yom Kippur selling pressure. Bouncing, first, would be equally suspicious.
Look ahead: Economic Calendar – for Wed Sep 23, 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday’s Yom Kippur holiday means that volume will be lighter (beginning Tuesday afternoon as traders leave early for evening services). Meanwhile, ECB head Mario Draghi is will testify to a Eurozone body — his vocal tone is amazingly reliable for triggering harrowing stock market swings around the world. It’s also the first day of Fall (equinox at 4:21am ET) a.k.a. “Gann Day” since WD identified it as being more prone to topping than any other day. Gann was ahead of his time, and apparently so was the market.
Dennis Lockhart Speaks
Tue 7:00 PM ET
MBA Mortgage Applications
7:00 AM ET
*PMI Manufacturing Index Flash
9:45 AM ET
EIA Petroleum Status Report
10:30 AM ET
2-Yr FRN Note Auction
11:30 AM ET
*Dennis Lockhart Speaks
12:30 PM ET
5-Yr Note Auction
1:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 1942.75 | 1931.50 |
| …would target | 1949.25 | 1938.00 |
| Bias-down: under | 1934.00 | 1922.75 |
| …would target | 1929.25 | 1918.00 |
| Signal status: LATE BIAS-DOWN | 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.