Posts by Rod David
Post-market Wrap… Well, that unsettles that.
FOMC policy statements are reliably volatile, even if that means trending more relentlessly than normal. All the more so with quarterly Fed chair Q&A press conferences. That makes them our most reliably opportunistic opportunities, and Thursday’s wide-ranging roller coaster did not disappoint.
There were plenty of troubling signs that the recovery is running into difficulty, like continually probing relevant objectives without closing decisively above them. Meanwhile, the bearish setup described on Saturday seems to be playing out, rallying to fresh highs and then collapsing, which defines this entire week even before Thursday’s two surges each collapsed.
Thursday’s session resembled a Pivot Reversal, but it wasn’t. The setup extends down without delay, and it still could, but there’s a likelier scenario to bounce, first. The near-term downside potential gets much, much likelier if Friday’s open isn’t already rallying back above 1980.50-1981.50. This being a Friday — quadruple witch, no less — no morning action should be surprising, not even narrow ranging, before the bullish WedEX’s influence becomes relevant.
Details and other markets coverage are discussed in the post-market Wrap recording here.
This evening, use these links to monitor overnight Globex trading:
XP-Friendly || non-xp ilinc
Daily Spot… Fed, up.
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))
With no excuse for further delaying the rally’s resumption, Thursday’s open gapped up to the range’s upper-end and the session extended higher. It eventually surged in reaction to the FOMC non-decision, fulfilling the requirement for a third higher close. Momentum remains intact so long as 1.1365 now holds as support.
Gold Dec Contract (GC, ETF: (GLD))
Thursday’s low utilized all but 20 cents of room for a pullback to 1114.50 before being likely to resume the rally. The FOMC reaction did spike up to test 1131.00, now requiring pullbacks to hold 1126.00 as support.
Silver Dec Contract (SI, ETF: (SLV))
Initially dipping Thursday didn’t threaten the 14.65 pullback limit before reacting up sharply to the FOMC statement, testing 15.25. Pullbacks must now hold 15.10 to maintain the rally.
30-year Treasury Dec Contract (US, ETF: (TLT))
Already having fulfilled its third lower close Wednesday, Thursday eventually firmed ahead of the afternoon’s FOMC events. Then it surged and extend higher to test 153-16. Since a fresh low was avoided intraday, closing above 152-30 allows a bigger rally to get underway.
Crude Oil Oct Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
No matter the margin by which Wednesday’s gap up extended through 46.00, lacking a second consecutive higher close Thursday could be very bearish.
Natural Gas Oct Contract (NG, ETF: (UNG, UNL))
Greeting Thursday’s EIA report while attacking the ongoing channel’s lower-end wasn’t a position of weakness, but it wasn’t enough to prevent a knee-jerk reaction to fresh lows. That knee-jerk reaction recovered back up into the range, potentially forming a bottom — at least, making any initial firming Friday likely to extend higher, but requiring a close above 2.68-2.70 to reverse the trend up.
Pre-close View… Playing chicken with chickens.
Greeting the FOMC statement optimistically proved quite an understatement. Rallying to 1994.00 had reacted down only 2 points ahead of the news. And then it spiked up to 2000.00.
Then it spiked down and plunged to 1976.00.
That was really a test of the rally’s 1977.00 target which was met yesterday. Back above 1985.00 therefore put into play a test of the next higher target at 1996.00 — never mind that the spike up had already met it. In fact, 1996.00 has been retested.
There is on likely resolution to this pattern. Regardless, this being new trend highs, nothing today can signal the trend reversing down. And if this 1996.00 testing doesn’t contain the rally, then it will have potential for extending up to 2020.00.
Livestox Recording Sep 17 2015
Thursday’s Livestox recording is below, and the stocks we addressed in order follow that. Please don’t hesitate posting follow-up questions to this blog post’s thread.
SPX
GLD
GDX
USO
FOLD
SUNE
IMGN
GPRO
TRTC
VAPE
GWPH
TAUG
SRNA
MSRT
Greeting the news optimistically.
Gradual firming has become obvious rally.
This morning’s First Trade blog post pointed out the market’s seeming desire to greet this afternoon’s FOMC events optimistically. In fact, after the morning inched slightly higher and slightly higher from 1981.00 to 1986.00 and then to 1988.00, the noon hour’s exit has surged up to 1994.00.
So, this afternoon’s 1988.25 bias-up has triggered, and its 1995.00 bias-up target is in-play. That’s 1 point from the rally’s next higher objective above yesterday’s 1977.00 and 1985.00 targets at 1996.00.
Where the rally into yesterday’s high was probably more option expiration mechanics than optimistic sentiment, today’s extension can become extended more easily. Don’t forget that there’s the 2:00pm policy statement, and then the 2:30 Q&A with Yellen.