Posts by Rod David
“Ineffectual optimism,” not strength, was
“Ineffectual optimism,” not strength, was responsible for Tuesday”s late-afternoon hovering just above session lows. Perhaps not such dumb strength, since delaying a fresh low until overnight can inhibit it from extending down. So, already fulfilling the 2088 test could greet Wednesday”s open in rally mode.
Rallying anyway Wednesday would be credible, but much more credible if gapping up above Tuesday”s 2096.50 noon hour high, or above the morning”s 2100 resistance. Upside attractions include Monday night”s 2103.75 high up to 2105.50, and then new highs.
Failing to hold 2088”s “lower prior highs” would keep all of Wednesday under pressure. Details and other markets coverage were discussed during the post-market Wrap, recorded here:
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Pre-close view… Ineffectual optimism.
Hovering just above the lows isn”t the same as basing.
The bias environment began lapsing from above 2093.50, but short of 2095.50 whose recovery would have launched a late-afternoon rally.
Not that sellers have exploited it. Not much. Very narrow ranging just above 2091.00 support has persisted through the position-squaring window.
Presumably, more fresh lows are on their way, and presumably to include a test of 2088.00. But not necessarily before the close. Sellers didn”t gain traction for today”s efforts — the bias environment was exited within the noon hour”s range, and the final hour was entered within the bias environment”s range.
Tuesday is essentially the inverse of yesterday, with the intraday trend not doing what”s necessary to assure extending tomorrow.
Daily Spot… False starts before big finishes.
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))
Probing overnight under 1.1075 proved that clinging to it Monday afternoon wasn”t actually rejecting its retest as support. Lower support at 1.1000 that still must break lower to signal a new downleg underway was attacked down to 1.1020.
Gold Dec Contract (GC, ETF: (GLD))
Retesting the 1112.00 pullback limit Tuesday probed under it to 1108.50 while Silver was substantially lower. But 1112.00 was recovered without a commensurate recovery in Silver, which suggests the rally will resume.
Silver Sep Contract (SI, ETF: (SLV))
Retesting 15.30 support under 15.15 extended down to attack 14.65 intraday Tuesday. Closing back above 14.90 would suggest the extra dip had been absorbed and that momentum was reversing back up.
30-year Treasury Sep Contract (US, ETF: (TLT))
Probing the 158-26 buy signal temporarily Monday was retraced back down toward the 157-14 sell signal Tuesday morning, and then a few ticks closer during the afternoon.
Crude Oil Sep Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
A new low was avoided Tuesday which allows a buy signal to be identified. Closing back above 43.55 would start to suggest that at least a corrective rally had begun, targeting at least 45.15. By the same token, a fresh low close under 41.15 would resume the decline, next targeting 37.15.
Natural Gas Aug Contract (NG, ETF: (UNG, UNL))
Trending down lower overnight to gap down Tuesday has jeopardized the trading range”s 2.77 lower-end from launching at least a retest of its 2.88 upper-end. Back above 2.77 would still be bullish.
Getting back on the same page.
Has market sponsorship arrived at its rally point?
This morning”s price action performed exactly as predicted, which is to say that it was choppy and unpredictable. No contextual clues dictated the lack of trending. It was precisely the opposite — there being no new context — that left the pattern aimless.
But without gapping down enough, the morning was unlikely to trend down. And it didn”t. Not until coming within 10-15 minutes of the bias environment lapsing at 11:30. Then new context had finally arrived.
A sell signal triggered under 2096.50 that was targeting 2091.00, where sponsorship could appear. In fact, 2091.00 is this afternoon”s bias-down signal, and it was attacked to within 2 ticks.
That”s near enough, since the pullback”s template required only a fresh session low. Test the prior low to prove new sellers can”t be attracted, while expending a lot of selling pressure, and avoid putting into play any lower targets. So, this afternoon”s bias environment is no-bias. No requirement to test any specific level, only for the bias signals to define its range.
The vulnerability to rallying again begins possible when the afternoon”s bias environment starts lapsing at 2:30 (or within 10-15 minutes). That will be difficult if price hasn”t firmed by then back above 2095.50 or higher. Exiting the bias environment at or around the lows would be just as vulnerable to trending down sharply.
Look ahead: Economic Calendar – for Wed Aug 19 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday”s pre-open CPI is reliable for influencing price action. But the afternoon”s FOMC Minutes release tends to trigger a more substantial reaction,
MBA Mortgage Applications
7:00 AM ET
*Consumer Price Index
8:30 AM ET
EIA Petroleum Status Report
10:30 AM ET
**FOMC Minutes
2:00 PM ET