Posts by Rod David
Pre-close view… The pause that refreshes sellers.
Corrective bounce underway.
Room for noise under 2077.00 down to 2073.00 was probed to 2069.75. The lower probes were still attached to 2073.00 as each leg still overlapped it.
Meanwhile, 1-minute RSI finally began diverging negatively. And although sellers were in control of the bias environment exit back under the noon hour”s low, they didn”t control the final hour”s entry which was back in the bias environment”s range.
Now a bounce is testing 2076.00.
The 2069.75 low was a single breakout from a Descending Triangle that had formed around 2073.00. The breakout reacted up as quickly back to 2073.00. And then higher from there.
This is a “failed Descending Triangle” pattern. Its reversal can be substantial, but it is rarely durable. Its likeliest objective is 2077.00. The decline could resume by reacting down through the 3:10-3:20 timing window or else at the 3:37 position squaring window. Avoiding those windows could delay fresh lows until Monday.
Daily Spot… Golden tickets, Oil slicks, and unbroken Bonds.
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))
Friday”s gap down from Thursday”s 1.1010 close stopped short of touching 1.0920 before bouncing back toward Thursday”s close. There”s no requirement to tick any higher before returning to the 1.0835-1.0855 lows.
Gold Aug Contract (GC, ETF: (GLD))
Another overnight plunge was able to fulfill the 1076.50 targeted retest of Sunday night”s 1080.00 low down to 1072.20. The open was already probing above 1076.50 and extended slightly higher intraday. Retesting the actual low isn”t required, but the 1090.00 bounce limit was probed after Friday”s close, potentially creating extra room to help absorb another sell-off.
Silver Sep Contract (SI, ETF: (SLV))
Overnight lows fulfilled the 14.40-14.45 target which was retested intraday Friday down to 14.33, and recovered back up to 14.40-14.45. A low could begin developing so long as Monday does not close lower.
30-year Treasury Sep Contract (US, ETF: (TLT))
Slicing through the gap at 154-00 Friday kept alive the upside momentum to continue higher overnight. Friday”s stock market decline encouraged a flight-to-quality that helped to push price higher to test 155-03, targeting 155-26 so long as 154-00 holds any test as support.
Crude Oil Sep Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Thursday”s test of the 48.25 target Thursday didn”t react up much overnight before Friday”s fresh low tested 47.75. Its reaction tried recovering 48.25. Closing back above 49.25 would signal the downleg was ending, if not also reversing up.
Natural Gas Aug Contract (NG, ETF: (UNG, UNL))
Thursday afternoon”s test of 2.83 extended lower overnight to also test 2.77, which lowers the buy signal to 2.83. The session essentially ranged narrowly sideways at or around 2.77.
Up is the new down.
Stopping optimistically short of the target .
Closing yesterday under 2099.25 put into play a test of 2077.00. There was no particular time frame for meeting it. It was attacked already to within 3 points before the noon hour”s end.
2073.00 is room for noise under the target. It can be tested without suggesting the drop is extending. That would only reflect more selling pressure being expended, more buying pressure being refueled.
A similar buffer above is at 2080.50. Reacting up aggressively from its test would reflect too much optimism at this stage to be a bottom.
No doubt, some degree of today”s selling pressure is a function of the weekend”s fast-approaching illiquidity. That”s pessimism, and it”s the one reason why many trends end upon retesting a Friday”s extreme. But a Friday”s extreme cannot, itself, end the trend.
Bouncing prematurely here could be very productive. The morning”s bias has extended through the noon hour as Fridays often do. RSIs are oversold, but making higher lows. And 2080.50 is being overlapped while probing under it by 5 ticks. Back above 2083.00 would have potential to 2094.00.
If a rally doesn”t try to catch then 2077.00 down to 2073.00 remains in-play. Any lower could double or triple today”s drop, ending down 40 or 60 points and ending the potential for new highs.
Look ahead: Economic Calendar – for Mon Jul 27 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Durable Goods being announced on a Monday is rare. This is a high-profile report, and influential to price action. Market participants will be jumpy already ahead of the week”s FOMC policy statement.
Durable Goods Orders
8:30 AM ET
Dallas Fed Mfg Survey
10:30 AM ET
4-Week Bill Announcement
11:00 AM ET
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET
Afternoon bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2099.25 | 2092.50 |
| …would target | 2104.50 | 2097.75 |
| Bias-down: under | 2088.75 | 2082.00 |
| …would target | 2082.25 | 2075.50 |
| Signal status: BIAS-DOWN | 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.