Posts by Rod David
The minimum objective of resuming
The minimum objective of resuming the rally Monday afternoon was 2093, and it was tested before the last half-hour. Price crept higher, while dips continued overlapping 2093. The next higher objective is 2096.50, which now is Tuesday morning”s bias-up signal. Triggering it in the morning would make a positive close no likelier than would initially dipping and then recovering. But a higher close is needed to confirm Monday”s breakout, to put into play new highs, and to prevent even a corrective dip — let alone reversing back down to new lows. That and more was discussed during the post-market Wrap, recorded here:
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Pre-close view… Breakout of a breakout.
Intraday consolidation is ending.
The afternoon bias environment”s 2089.00 exit was at the bias environment”s upper-end, so it doesn”t qualify as gaining traction. But the final hour”s 2092.00 entry was above the bias environment”s high, which does.
Extending higher through the 3:10-3:20 timing window would confirm buyers gained traction for today”s efforts. Their reward would be control of tomorrow morning”s bias environment.
The rally effort would be more credible if already rallying out of the bias environment, instead of waiting until minutes before the final hour”s entry. Not trending up through 3:10-3:20 would be vulnerable to reversing down sharply. Currently, that trigger is under 2089.50.
Absent a big reversal down, today”s session will be the breakout that we discussed during this weekend”s Saturday Review. Confirming it with a second consecutive higher close would put into play new highs. Meanwhile, probing higher Tuesday morning could reverse down intraday to avoid confirmation, while also reversing the trend back down. We”ll discuss the possible paths from here, and their consequences, during today”s post-market Wrap.
Daily Spot… Shake on it!
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))
Sunday night”s reaction to the Greece deal tried holding 1.1120 support but eventually slid through it Monday, testing 1.1000 support, and still targeting 1.0935.
Gold Aug Contract (GC, ETF: (GLD))
Last week”s bounces had held the 1163.00 buy signal. Monday”s slide tested 1150.00 to within $3 of prior lows before bouncing back to 1158.50 resistance. Closing back above 1158.50 does suggest the dips are weak-handed, making any probe above 1163.00 that much likelier to extend higher intraday.
Silver Sep Contract (SI, ETF: (SLV))
Friday”s weak-handed attempt to extend above 15.35-15.45 resistance was retraced Monday back toward 15.25, but still recovered back up to 15.45. That action may have neutralized Friday”s premature rally effort, so that early strength Tuesday would be credible for extending higher intraday.
30-year Treasury Sep Contract (US, ETF: (TLT))
Gapping up Sunday night was reversed to fresh lows before Monday”s open as a Greece deal was reached. Firming intraday tried to avoid another lower close, which would allow a lower buy signal than 150-24.
Crude Oil Aug Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Overnight weakness managed to hold within the recent range to avoid extending the decline. But recovering 54.30 is still needed to prevent the narrow range from becoming a continuation pattern.
Natural Gas Aug Contract (NG, ETF: (UNG, UNL))
Gapping up Monday to test 2.83 resistance and probing it temporarily to 2.88 was no more bullish than Friday”s rally that closed at 2.77 resistance. Closing above either is needed to signal trending, especially if confirmed by a second consecutive higher close the following day.
Enthusiasm gap.
Open”s surge hasn”t resumed.
The 2091.25 high reacted back down during the morning”s bias environment to 2086.50. That had been the original buy signal, if not confirmation that the overnight pullback to 2080.75 would recover to probe fresh highs.
Price action hasn”t changed much since then. Slightly lower lows during the noon hour down to 2086.00 have avoided extending down. In fact, price action since the open”s surge has avoided taking 1-minute RSI either overbought or oversold. New sponsorship isn”t being attracted to this range, making a breakout difficult.
This afternoon being a no-bias environment, trending down has room to test the 2084.00 bias-down signal just as noise in the range. Back above 2089.00 would start to signal instead the potential for testing the afternoon”s 2091.50 bias-up signal.
Trending that is obvious ahead of 2:30 would be credible for extending into the close. But there is no requirement to trend, at all. So, be careful with position size and reaction limits.
Look ahead: Economic Calendar – for Tue Jul 14 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights:
Tuesday”s calendar is certainly busier than Monday, but not much more relevant. Retail Sales is highlighted only because it will be discussed on financial media, but it impacts price action only if it surprises.
NFIB Small Business Optimism Index
6:00 AM ET
*Retail Sales
8:30 AM ET
Import and Export Prices
8:30 AM ET
Redbook
8:55 AM ET
Business Inventories
10:00 AM ET
4-Week Bill Auction
11:30 AM ET