Posts by Rod David
Daily Spot… Reverberations continue.
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))
Firming Tuesday night had reversed to gap down Wednesday and to protract the test of 1.1400 support, presumably before resuming the rally to probe above 1.1800, which would be triggered back above 1.1435.
Gold Dec Contract (GC, ETF: (GLD))
Tuesday”s pullback from testing the 1169.00 target Monday extended down overnight to gap down Wednesday, testing the 1125.70 maximum pullback limit that would keep alive another bounce. It was probed down to 1117.00 before trying to recover into the close. Back above 1130.40 would signal momentum reversing up to at least test 11147.40.
Silver Sep Contract (SI, ETF: (SLV))
A couple of days of testing 14.65 support failed to hold as overnight selling trended down sharply and Wednesday”s open gapped down under all prior recent lows to attack 13.90.
30-year Treasury Sep Contract (US, ETF: (TLT))
Tuesday night”s bounce to within 1 tick of the 159-10 buy signal was reversed back down Wednesday by the open, extending down sharply intraday to attack 156-00. Back above 157-06 would still trigger a rally targeting 161.26.
Crude Oil Oct Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Tuesday”s gap up hardly even firmed before Wednesday”s open, and the intraday action essentially flat-lined, further suggesting a likely probe to fresh lows fulfilling the 37.55 target before a credible rally leg can begin.
Natural Gas Aug Contract (NG, ETF: (UNG, UNL))
Firming further at Wednesday”s open exercised the same restrained optimism as Tuesday afternoon”s recovery from filling the gap back down to Monday”s close. No unfinished business below and no excessive optimism doesn”t greet Thursday”s EIA report from strength, but the an initially negative knee-jerk reaction down would be likely to recover and to reverse up. Closing above 2.77 would start to signal a new rally leg underway..
Wind change?
Trending down into the noon hour is trying to reverse up.
This morning”s decline extended down to its 1881.75 bias-up target as support, and then probed under it during the noon hour down to 1875.50. Now the afternoon bias environment has produced a rally up to 1906.50.
That”s threatening to probe above the 1905.00 bias-up signal, during a no-bias environment. So, this may be no-bias trending. Any probing above 1905.00 should be retraced to the 1905.00 signal, if not also back down to the 1888.00 area that was being tested at 1:20.
Recovering 1909.00 would get a benefit of the doubt for having absorbed the interim selling. Back under 1897.50 would start to suggest that momentum has reversed down, instead.
Look ahead: Economic Calendar – for Thu Aug 27 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: While GDP is high-profile, it has no reliable track record for influencing price action. Jobless Claims doesn”t really, either, but I would be on guard for anything surprising in this environment that might make a rate hike more or less supported.
*GDP
8:30 AM ET
*Jobless Claims
8:30 AM ET
Corporate Profits
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
Pending Home Sales Index
10:00 AM ET
EIA Natural Gas Report
10:30 AM ET
Kansas City Fed Manufacturing Index
11:00 AM ET
7-Yr Note Auction
1:00 PM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET
Afternoon bias
| WED afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 1908.75 | 1905.00 |
| …would target | 1916.75 | 1913.00 |
| Bias-down: under | 1885.00 | 1881.25 |
| …would target | 1878.00 | 1874.25 |
| Signal status: NO-BIAS, TESTED BIAS-DOWN SIGNAL | 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… Deja voodoo.
Second consecutive overnight rally fails to extend again.
Setups that appear sequentially tend not to resolve similarly. That didn”t prevent last night”s rally from peaking at the ope, just because Monday night”s rally had peaked there. Differences in how they peak can still differentiate their outcomes.
Since yesterday”s peak didn”t reverse down immediately, reversing down today essentially required doing so quickly and aggressively. Reverse-engineering that qualification would create the corollary that NOT trending down quickly would be bullish.
The open”s blip-up to 1917.75 was absorbed quickly as price reversed down aggressively, first to 1895.25, and then to 1885.00.
Bouncing into this mornings Fed speaker was rewarded by his dovish comments, which triggered a knee-jerk reaction up to 1905.00. But his comments only confirmed an already widely-held opinion, and follow-up comments seem less dovish, so that has reacted down to 1890.50.
This is still a bias-up environment — in fact, renewed bias-up, although any renewed bias-up targets have been already– so downside sponsorship is challenging, and difficult to extend. But so long as the bias environment isn”t exited back above 1905.00 and 1909.00, then the afternoon is vulnerable to retracing the balance of the overnight rally… for starters.