Posts by Rod David
Did sellers regain control Wednesday?
Did sellers regain control Wednesday? Or, did the NYSE halt delay a recovery. One big indication is that the last 60-90 minutes probed under the morning”s low but failed to recover. By not rejecting those late sellers, the market tacitly endorses them — and their direction. So, holding short could be contemplated, with two caveats:
First, although the fresh low wasn”t rejected, neither was it extended. Especially not before coming to within 3 minutes of the cash session close. While already breaking lower would have been optimal for the setup, ranging calmly sideways was a kind of eerie calm before the storm.
Second, Wednesday”s drop was largely “ineffectual pessimism,” being an inside day that trended down. But ineffectual optimism appeared while hovering just above Tuesday”s low throughout Wednesday”s final hour. Gapping down Thursday would be a normal delayed reaction.
There is actually a third caveat, as important as the first two, but different. The NYSE”s unprecedented three-hour halt probably affected my timing windows somehow, and to some degree. Unless Thursday”s open is way out of line, I”ll assume the halt”s influence is moot.
Speaking of Thursday”s open… One way to instantly invalidate the downside potential is by gapping up. Not a little, but 14 points to recover Wednesday afternoon”s 2053.25 high. We would presume, as usual in this setup, that rejecting Wednesday afternoon”s rally would form a session-long rally.
Otherwise, extending down at all at this stage is likely to extend a lot. And steeply. Starting on Thursday morning would be likely to extend through Monday morning. Either way, the market is not about to begin behaving calmly.
More discussion is found in the post-market Wrap recording:
https://roddavid10.mitel-nhwc.com/join/bwhcstr
[I”ll make overnight links to the chaRTroom available later in this post”s comments section]
Morning bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2055.00 | 2047.00 |
| …would target | 2060.25 | 2052.25 |
| Bias-down: under | 2042.25 | 2034.25 |
| …would target | 2036.50 | 2028.50 |
| Signal status: BIAS-UP, BIAS-UP TARGET EXCEEDED | 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.
Pre-close view… Handstands on the precipice.
Probing fresh session lows.
Already reacting down from 2053.00, tThe reaction to FOMC Minutes extended down to 2046.00. And that soon began sliding to 2036.00.
The drop didn”t probe fresh session lows until after the bias environment had begun lapsing at 2:30. A modest bounce did not recover the session”s prior low going into the final hour. But now a bigger bounce seems to be doing that through the 3:10-3:20 timing window.
Well, into the timing window, at least. Exiting the 3:10-3:20 timing window back under 2043.00 would be a clear rejection of the recovery attempt. A steep and substantial dive into the close would be the likely consequence.
Otherwise, extending above 2049.25 at any time would be credible for rallying into the close, instead. And a recovery from here could go a long way.
Daily Spot… Commodity crush not repeated.
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 post-close surge above the fresh low”s 1.1000 bounce limit was extended Wednesday to attack the prior low”s 1.1120 bounce limit. Tuesday”s breakout wasn”t confirmed, but its session should still be tested before considering whether a durable rally leg were underway.
Gold Aug Contract (GC, ETF: (GLD))
A slightly lower low Tuesday night attacking 1146.00 was recovered Wednesday morning to the 1163.00 buy signal. Any early strength Thursday would be credible for extending higher intraday.
Silver Sep Contract (SI, ETF: (SLV))
Flat-to-higher ranging Wednesday avoided confirming Tuesday”s breakout, making any early surging likely to extend higher intraday.
30-year Treasury Sep Contract (US, ETF: (TLT))
Wednesday didn”t gap down at all, let enough to form an Island out of Tuesday”s pattern. At least an eventual third higher close is required, and any interim pullback is likely to be recovered.
Crude Oil Aug Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Holding Tuesday”s low is critical to maintaining the recent decline as only a temporary correction. Firming ahead of Wednesday”s session helped to absorb intraday selling pressures, avoiding fresh a low. The EIA report had little if any impact.
Natural Gas Aug Contract (NG, ETF: (UNG, UNL))
Surging through Wednesday”s open peaked upon attacking 2.77 and reversed down to pierce Tuesday”s 2.68 low. Thursday”s EIA report is being not being greeted from a position of weakness. Closing back above 2.77 is needed to suggest any negative knee-jerk reaction down was recovered.
Not just anxiousness ahead of the Minutes.
NYSE technical glitch invades the noon hour.
NYSE is began experiencing technical difficulties as this morning”s bias environment began lapsing at 11:30. Other exchanges are mostly operational and able to trade NYSE-listed issues.
This followed a mid-morning bounce that peaked at its first target 2057.75. That resolved down to a fresh session low at 2043.25 ahead of the noon hour. That fresh low was preceded by firming to 2052.00. And now it has been bookend-ed by a surge back up to 2052.00.
That”s not necessarily a bottom. And not yet rejecting the drop isn”t necessarily bearish. The market is always paralyzed by anxiousness just before FOMC events (e.g. Minutes, policy statement). And FOMC Minutes are less than an hour away.
Recovering from a fresh low that printed during the noon hour would have been bullish. Triggering the 2054.25 bias-up signal would still be bullish. But look out below if the afternoon probes fresh session lows by more than just a knee-jerk reaction.