Posts by Rod David
Daily Spot… Extensions.
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))
The 1.0855 target was tested Friday, while also filling the new gap back to Thursday”s open. Back above 1.0915-1.0920 would be credible for extending sharply higher intraday.
Gold Aug Contract (GC, ETF: (GLD))
Gapping open at Wed/Thu lows didn”t prevent probing lower, and testing 1138.00. But none of that created any requirement or impetus to recover, and the drop extended to fresh lows testing 1130.00. A bounce to 1163.00 would be the likely objective of any rally begun Monday, probably be gapping up above 1138.00. That would leave unfinished business below to fill the gap back down to Friday”s close. Rallying without leaving any unfinished business must still close above 1151.00 to signal momentum actually reversing up.
Silver Sep Contract (SI, ETF: (SLV))
Gapping down Friday barely extended lower intraday, spending the balance of the session ranging narrowly around Thursday”s ~14.85 low.
30-year Treasury Sep Contract (US, ETF: (TLT))
Wednesday”s confirmed breakout above 150-24, which had held a test of its 150-08 pullback limit, extended higher Friday to test 152-00. While this fulfills the minimum requirement for an eventual third higher close, there is potential up to 154-00 or to fresh highs above 154-20 so long as pullbacks now hold 151-14 . Closing back under 150-08 would target new lows under 147-14.
Crude Oil Aug Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Thursday”s break under 52.00 continued dropping Friday, probing under the prior week”s 50.55-50.60 low, and targeting a test of fresh lows at 48.00.
Natural Gas Aug Contract (NG, ETF: (UNG, UNL))
Friday”s dull ranging touched 2.83 but didn”t react up sharply from it. Any further weakness Monday should be rejected very quickly and aggressively to avoid launching a deeper correction, while any initial strength would be credible for extending higher intraday.
Pushing on a string.
Opening dip has yet to extend or to recover.
If trending down throughout the opening 15 minutes hasn”t set a bearish tone for the day, then at least it”s inhibiting a recovery. That opening setup was suspicious already for not probing under any relevant support, and not yet extending only reinforces that suspicion.
But while sellers don”t seem resolved to push lower, buyers seem to be stuck in traffic and yet to arrive.
A bullish WedEX need not avoid fresh session lows retesting this morning”s 2112.75 low. A bullish WedEX need only force a quick and substantial recovery from fresh lows. Or, simply start trending up through 2116.00-2117.00 altogether, targeting fresh highs above 2120.00-2121.00.
Regardless of these likely influences, don”t forget that today is expiration. Fridays are already vulnerable to unique “Friday factors” caused by the fast-approaching illiquidity. Trending is difficult to start, and difficult to stop once started.
Look ahead: Economic Calendar – for Mon Jul 20 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: No econ reports are scheduled for Monday.
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 | 2125.00 | 2118.25 |
| …would target | 2131.00 | 2124.25 |
| Bias-down: under | 2118.50 | 2111.75 |
| …would target | 2114.00 | 2107.25 |
| Signal status: waiting for trigger | 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… Avoiding inversion.
Trending down through the open has set the tone.
The late pre-open fresh highs at 2119.25 formed a Double Top that began reversing down into the open. And out of it. Reversals from Double Tops are often temporary, but the post-open influence of this pre-open setup required that reversal to be underway already by 9:45. It wasn”t.
In fact, the opening 15 minutes of volatility trended down throughout. This setup on expiration tends to set the session”s tone. And it extended down to touch the 2112.75 bias-down signal.
So, we”re on watch for this afternoon”s WedEX to invert bearish. Trending down through the bias environment”s exit would confirm. But…
The door remains open to recovering and rallying. The first 15 minutes did not probe any relevant support, and neither did its follow-through. Ample opportunity to trigger bias-down was ignored. RSIs diverged positively at the low. And the no-bias signal has put into play an offsetting test of the 2119.75 bias-up signal.
Back above 2116.00 would start signaling the open”s selling pressure was absorbed, and that fresh highs were in-play. Anything shallower would keep alive potential for inverting WedEX”s afternoon influence.