Posts by Rod David
Daily Spot… Still in the throes.
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))
Tuesday”s pullback took advantage of the confirmed breakout, which is targeting a probe above 1.1800. The objective need not be done immediately, although the pullback to 1.1400 seems substantial enough to satisfy near-term selling pressure.
Gold Dec Contract (GC, ETF: (GLD))
Fulfilling the 1169.00 target Monday had reacted down through the close, and then deeper overnight to 1134.00. The pullback could test 1130.50 or 1125.50 before signaling the trend has reversed down. Otherwise, back above 1147.50 would launch a retest of 1169.00.
Silver Sep Contract (SI, ETF: (SLV))
Testing 14.65 a little more deeply Tuesday was still overlapping it, and in any case still not rejecting it and recovering. Back above 14.90 should extend higher to extend a further decline.
30-year Treasury Sep Contract (US, ETF: (TLT))
The reaction down from Monday morning”s 163-00 high extended deeper Tuesday by gapping down and falling to 157-20. The gap back to Monday”s 161-26 open should still be retested while forming a more durable top, which would be triggered back above 159-10.
Crude Oil Oct Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Gapping up Tuesday didn”t extend higher, and didn”t even fill the gap back to Friday”s 40.30 close, only spending the session ranging narrowly. Having come within 20 cents Monday of the 37.55 target, a bottom can now form by probing under Monday”s low and closing above Tuesday”s 39.90 high. .
Natural Gas Aug Contract (NG, ETF: (UNG, UNL))
Gapping up and ranging sideways Tuesday left no unfinished business below. Firming early Wednesday above Tuesday”s high would be credible for trending higher intraday.
Pre-close view… Still no takers.
Overnight rally disappeared, but still not totally replaced.
The pre-open surge in reaction to China”s rate cut has yet to be retested. Ranging 1930.00-1948.00 into the open broke a little lower down to 1922.00 during the morning”s bias environment. But only temporarily, as that was recovered to 1945.00 before the bias environment began lapsing.
Price action since then has trended down, and much more deeply. The afternoon”s 1921.00 bias-down signal wasn”t touched in time to trigger or to invoke the grace period. But a plunge broke it decisively by 1:30 to invalidate the no-bias signal. The 1911.00 bias-down target wasn”t actually put into play, but it held multiple tests at the low anyway.
And now the bias environment is lapsing. The overnight rally hasn”t extended, but the pullback isn”t deep enough to have rejected it, let alone to have reversed it down.
It”s not too late — the bias environment was exited under the noon hours low, and entering the final hour under the bias environment”s 1910.00 low would give sellers traction. That gets very unlikely if probing above 1920.00 before the final hour.
Look ahead: Economic Calendar – for Wed Aug 26 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday”s Durable Goods has a reliable track record for influencing price action. The PMU services doesn”t always. But a Fed speaker during the morning should get a reaction.
MBA Mortgage Applications
7:00 AM ET
*Durable Goods Orders
8:30 AM ET
PMI Services Flash
9:45 AM ET
*William Dudley Speaks
10:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
2-Yr FRN Note Auction
11:30 AM ET
5-Yr Note Auction
1:00 PM ET
Afternoon bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 1947.25 | 1943.50 |
| …would target | 1954.50 | 1951.00 |
| Bias-down: under | 1924.50 | 1921.00 |
| …would target | 1914.75 | 1911.00 |
| Signal status: NO-BIAS | 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… Buyers blocked, sellers locked.
Session-long rally almost tested, so almost rejected.
Gapping up to and through yesterday afternoon”s 1947.00 high would have formed a session-long rally setup. The open touched it, barely, so it was rejected, barely. A benefit of the doubt goes to the consequence of failing to trigger what was tried — but only so much as it was barely tried.
Meanwhile, two other contexts are operational. The most pressing is this morning”s bias-up environment. Renewed bias-up, actually, for having exceeded the 1920.00 bias-up target through 10:15. But even doubly or triply renewed bias up targets have been met already, so there is no requirement to trend back up. The only requirement is that the 1910.00 bias-up signal define the range”s lower-end if tested.
The other context is the traction gained by yesterday afternoon”s sellers. Gapping up above yesterday afternoon”s high would have neutralized them, and yesterday afternoon”s high contained the gap up, so they should still be rewarded — if not this morning, then this afternoon.
That is, a normal market environment would be likely to probe under yesterday afternoon”s lows this afternoon. This is not a normal environment, but the resolution remains likely until disproved.
One way to disprove it would be exiting the bias environment back above 1941.00. Another would be not to have yet begun trending down by the noon hour”s exit.