Posts by Rod David
The wake of Wednesday afternoon”s
The wake of Wednesday afternoon”s FOMC policy statement was at first spiky — up 6 points to 2102.25 down 11 points to 2091.25, and back up to test 2096. Then it was choppy, gradually working higher to 2104.25. But essentially it was hope-y, hovering at session highs through the final hour.
That hovering was above 2099.25, whose recovery makes a test of 2105.50 likely, too. There”s some degree of “ineffectual pessimism” in hovering for so long just under 2105.50 without either testing it or reacting down, and that”s potentially bullish from a contrarian perspective.
So, at least a probe of fresh highs is likely, so long as 2096 holds as support. Gapping up Thursday above 2105.50 would make that probe more likely to extend to new highs. So long as 2096 holds as support. Back under 2096 starts putting into play a test of Tuesday night”s 2084.50 low. which could be probed down to 2077. Unless 2096 holds as support.
Details and other markets coverage were discussed during the post-market Tour:
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Tonight”s links to monitor the chaRTroom are:
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xp UN-friendly: https://roddavid10.mitel-nhwc.com/join/shkphyy
Morning bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2112.50 | 2105.50 |
| …would target | 2119.00 | 2112.25 |
| Bias-down: under | 2102.25 | 2095.50 |
| …would target | 2095.00 | 2088.00 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET MET | FAQ | |
| INTRO VIDEOS #1 and #2 | ||
1. At 10:15, 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 10:15 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 10:15 would invoke a grace period through 10:30 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 10:30 after invoking the grace period would trigger “noN-bias,” with no bias influence.
Daily Spot… No statement is statement.
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 break lower extended down slightly Wednesday before the FOMC statement. Its reaction blipped-up, then resolved down to attack 1.1000. The drop should extend if the recent rally”s correction is underway, let alone its retracement.
Gold Aug Contract (GC, ETF: (GLD))
Slipping momentarily down to 1089.00 was recovered quickly back into the range, where a blip-up tested 1100.00 in reaction to the FOMC statement. That resolved back down into negative territory, still likely to visit 1083.00 before a rally would be credible.
Silver Sep Contract (SI, ETF: (SLV))
Crossing the 14.75 buy signal early Wednesday reacted up sharply to 14.90, helping to confirm the level is relevant. The surge was retraced entirely to test 14.75 as support, which held through the FOMC statements reaction.
30-year Treasury Sep Contract (US, ETF: (TLT))
Gapping down slightly and within Tuesday”s range still extended down Wednesday, testing the 154-00 pullback limit by several ticks. The FOMC reaction wasn”t very strong, but it recovered well back into the range. Dipping a little deeper Wednesday has made filling the gap back up to Monday”s 155-08 close likely to probe above it by at least a quarter-point — still assuming that 154-00 holds as support.
Crude Oil Sep Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Wednesday”s EIA report triggered a surge that tested the 49.25 buy signal — twice, by a quarter. Its reaction down under 48.75 was too shallow to signal that longs were trapped. Closing back under 48.25 would have signaled extending down to 44.25.
Natural Gas Aug Contract (NG, ETF: (UNG, UNL))
Firming Wednesday in positive territory doesn”t strengthen the pattern any further for greeting Thursday”s EIA report. But neither is it any weaker, still sitting complacently within its 2.77-2.88 range..
Pre-close view… Hut, hut, hello?
No surprise: no hike. No disappointment, either.
At least, no disappointment of its own accord. The only reaction down followed the initially favorable knee-jerk reaction up. That was a 6-point spike from 2096.00 that plunged almost 11 points to fulfill the required test of 2091.50.
Reaction to the spike up, attraction below… There”s only one opportunity for a rejected spike up to trend down. Consolidating momentarily just under 2096.00 failed to extend down, and now fresh highs just tested 2104.00.
Recovering back above the spike”s 2096.00 origin all but required retesting the spike”s 2102.25 peak. Waiting to retest 2102.25 until the bias environment began lapsing at 2:30 has helped to inhibit counter-trend sponsorship from rejecting it again.
And now entering the final hour above the bias environment”s high gives the 3:10-3:20 timing window an opportunity to gain traction. Probing fresh highs would make follow-through tomorrow likely. Back under 2099.25 would be vulnerable instead to a sliding into the close
Actually, the wai-ai-aiting is the easiest part.
Hovering at the highs ahead of FOMC.
It”s less than an hour before the FOMC policy statement becomes history. Everyone “knows” the hike won”t come before September. Hearing it from the collective horses” mouth could ignite a positive reaction.
Perhaps that anticipation is responsible already for this morning”s rally. Still, there”s a slight difference between knowing what will be said, and hearing it finally said. The unknown particulars might be inhibiting some of the rally, too.
But if an initially favorable knee-jerk reaction isn”t being rejected within its first several minutes, then a massive short-squeeze targeting new highs could be underway. Otherwise, the slightest hint of hiking any earlier — like noting the ability to act between meetings — would more likely incite a steep reaction down.