Posts by Rod David
Pre-close view.. Fighting the lifeguard.
Fresh low finally (albeit barely) probed.
One of the most important lessons learned by lifeguards is not to let drowning victims drag you under with them. I”m reminded of this while trading several attacks and probes of fresh lows that keep fighting back prematurely.
This afternoon”s renewed bias-down environment dipped eventually to 1913.25. This could have served to launch a recovery, and in fact it was recovered back up to this afternoon”s 1926.00 bias-down signal. But its resistance pushed back, and now another slightly lower fresh low is flailing about at 1912.75.
Trending down through 3:10-3:20 could have added a lot of confidence to riding a short through the close. So long as 1920.50 isn”t recovered, I”ll still give fresh lows a benefit of the doubt for testing not only 1911.00 but also 1907.00.
Daily Spot… The bond’s head-fake (again).
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))
Having held the maximum pullback potential for two days, a recovery needed to be underway without further delay to recover the prior week”s decline without launching new downleg. Tuesday did begin firming, but not yet overtly enough to be confident a recovery has begun.
Gold Dec Contract (GC, ETF: (GLD))
Fresh highs overnight extended higher Tuesday morning to fulfill the 1147.40 bounce target. Its test reacted down, but closing above it with a second consecutive higher close for confirmation would put into play fresh highs above 1169.00”s original target.
Silver Dec Contract (SI, ETF: (SLV))
Resistance at 14.55 held tests Tuesday as the gap back down to last Wednesday”s 14.35 open still should be filled before a recovery attempt would be credible for extending.
30-year Treasury Dec Contract (US, ETF: (TLT))
Fresh lows overnight had recovered to gap up Tuesday morning. The gap up barely attacked the 155-24 buy signal before dipping back under Monday”s 154-08 low to fresh lows, albeit not quite back to the overnight low.
Crude Oil Oct Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Third day was not so charming, after all, as the three-day surge reacted down sharply Tuesday to weak economic data globally, testing 45.55 whose break would start to signal the rally”s momentum has peaked. Reversing momentum down would be signaled under 44.15-44.75. There is otherwise potential to retest Monday”s high up to 50.10.
Natural Gas Oct Contract (NG, ETF: (UNG, UNL))
Gapping up Tuesday from the range”s lower-end stopped pessimistically short of even touching 2.73. Extending higher early Wednesday would be credible for at least testing the 2.77 buy signal.
Look ahead: Economic Calendar – for Wed Sep 2 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: This week is capped off by the monthly Employment Situation report, so the focus turns to jobs reports. Wednesday”s ADP is often influential to price action, while also offering a glimpse of market sentiment ahead of Friday. The afternoon”s Beige Book is reliably influential, too.
MBA Mortgage Applications
7:00 AM ET
**ADP Employment Report
8:15 AM ET
Productivity and Costs
8:30 AM ET
Gallup U.S. Job Creation Index
8:30 AM ET
Factory Orders
10:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
**Beige Book
2:00 PM ET
Afternoon bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 1941.25 | 1938.00 |
| …would target | 1947.25 | 1944.00 |
| Bias-down: under | 1929.25 | 1926.00 |
| …would target | 1923.75 | 1920.50 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET EXCEEDED | 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… Holding its ground.
Late fresh pre-open low rejected.
1919.50 was the overnight low prior to this morning”s Market Tour. It was broken during the Market Tour down to 1914.00. The open was greeted back at 1923.00. And that extended higher to 1932.00 and 1939.50.
Overnight sellers had gotten ahead of themselves. But then opening buyers did the same. Reacting down fell to 1921.50 and recovered almost entirely back up to 1938.00.
A lot of selling pressure was thrown at the market. It was all absorbed, as was another shallower dip. But it hasn”t been reversed. Holding its ground through the morning would require an obligatory fresh post-open high. While 1940.75 would have sufficed earlier, that could extend much higher before resuming the decline. (e.g. This morning”s bias-down target is 1954.00.)
But resuming the decline remains likely, since reactions to the dips failed to gain traction through any relevant window. It should be a matter only of from what higher level. Trying to resume the decline from under 1940.75 would be likely again to recover.