Posts by Rod David
Daily Spot… When it rains it pours.
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))
A third consecutive close at resistance gapped up and extended higher intraday Monday. From 1.1120 to 1.1220, to 1.1360 and now up to a 1.1700 handle with a probe above 1.1800 in-play.
Gold Dec Contract (GC, ETF: (GLD))
Flat-to-lower ranging during Sunday night was recovered almost grudgingly to probe a fresh high that satisfied the 1169.00 target narrowly missed last week. Gradually reacting down into the close later spiked down momentarily to 1145.00 and back up again,
Silver Sep Contract (SI, ETF: (SLV))
Complete divergence allowed a break lower back to last week”s low, which had narrowly stopped 2 cents short of touching its 14.65 pullback objective. It was actually probed by at least a nickel Monday morning. Its reaction up to 15.10 reacted down, but held above 14.65.
30-year Treasury Sep Contract (US, ETF: (TLT))
Continued flight-to-quality triggered Sunday night”s surge to new highs that extended intraday to 163-01. The stock market”s recovery attempt let bonds drop sharply back down to 159-26, bouncing into the close to overlap the rally”s prior 160-20 target as resistance.
Crude Oil Oct Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Fresh lows Sunday extended through Monday morning and eventually came within 20 cents of fulfilling this leg”s 37.55 target.
Natural Gas Aug Contract (NG, ETF: (UNG, UNL))
Gapping down and probing a fresh low was reversed back into positive territory Monday intraday. While that may foreshadow a bottom forming, it doesn”t qualify as the bottom, or as its reversal, which would yet be able to form. In fact, the recovery was retraced into negative territory, although not to a fresh low.
Round two.
Did optimistic pessimists deprive the market of a durable bottom?
The rally from this morning”s lows is legendary. The individual moves along the way up, and the interim down moves, were respectable for any given day, let alone for a timing window. Let alone for several of them in the same timing window.
On an historical day for point moves, there is already vulnerability to historical sized point moves. Could this market be about to deliver the head-fake of the century?
This afternoon”s 1943.25 bias-up signal was probed during the noon hour to test and retest 1950.00. But 1943.25 was touched within 3 minutes of the 1:20 bias timing window, invoking the grace period. And it wasn”t recovered through 1:30, invoking a late no-bias.
1943.25 is the bias environment”s upper-end. And at least until coming to within 10-15 minutes of the window lapsing at 2:30, the range”s lower-end should be defined by 1914.00 if tested.
Meanwhile, 1943.25 has continued breaking lower to test 1928.25. So far, that”s still above this morning”s 1925.00-1928.00 highs. Exiting the bias environment any lower would be likely to trend down further — and possibly get carried away.
Look ahead: Economic Calendar – for Tue Aug 25 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Three housing sector reports coming on the same day Tuesday for the first time in my recordings. Three reports coming simultaneously at 10:00, which enhances their ability to influence price action.
Redbook
8:55 AM ET
*FHFA House Price Index
9:00 AM ET
*S&P Case-Shiller HPI
9:00 AM ET
*New Home Sales
10:00 AM ET
*Consumer Confidence
10:00 AM ET
Richmond Fed Manufacturing Index
10:00 AM ET
State Street Investor Confidence Index
10:00 AM ET
4-Week Bill Auction
11:30 AM ET
2-Yr Note Auction
1:00 PM ET
Afternoon bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 1948.25 | 1943.25 |
| …would target | 1957.00 | 1952.00 |
| Bias-down: under | 1919.00 | 1914.00 |
| …would target | 1902.00 | 1897.00 |
| Signal status: LATE NO-BIAS, TESTED BIAS-UP 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… Optimistic pessimists.
Gap down after trading halt finds a lot of buyers, or a lot fewer sellers.
I”m reluctant to get bullish on this morning”s 97.50 point rally from 1831.00 up to 1928.50. Another 3-4 points would have made a big difference.
No, I”m not really that particular about the exact calculations. Structure is more important, and the market has been ranging around last night”s initial 1911.00 low.
Relevant resistance would be cleared at 1931.00. Without extending higher, this morning”s nearly 100-point bounce may yet prove to be only a temporary correction.
Having drifted back down toward the range”s 1898.25 low, recovering back above 1920.00 would start to suggest another upleg underway. Otherwise, there”s no particular requirement to resolve down immediately. But resolving down would likely find a couple of air pockets on the way back down to 1882.00 and 1851.00.
One observation about the bigger picture — the “throat” of October”s “V” bottom around 1882.00 has held its test through the bias environment beginning to lapse. Apart from the near-term signals listed above, the biggest proof of extending down would be to enter the noon hour back under 1882.00.