Posts by Rod David
Pre-close view… Top rung.
FOMC reaction probes fresh highs, intraday.
Ranging had narrowed back to 2122.50 when the FOMC Minutes were released. The reaction surged to 2128.00, and then to 2132.00, where likely resistance had been calculated.
It”s been straight down since then. The minimum pullback objective at 2127.25 was also the likely objective. Bounces to 2129.00 resistance resolved down sharply to 2121.50.
The bigger picture is on-track for deteriorating even further from yesterday”s conditions. Today”s new high originated intraday from under the two prior sessions” intraday highs, 2128.75 and 2130.50. Having probed above them, closing back under them would underscore this area”s resolve. It wouldn”t prevent a fresh high Thursday, perhaps even retesting yesterday”s 2134.00 pre-open high. But any early strength Thursday still would be vulnerable to collapsing through the afternoon.
Now another bounce is targeting 2126.00 resistance. Extending higher to close above yesterday”s 2130.50 high would trigger a bullish three-day weekend indicator, and potentially marginalize sellers through Tuesday morning. But back under 2122.50 would trigger a new downleg.
Daily Spot… Wide ranges, little movement.
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 Jun Contract (EC, ETF: (FXE, UUP))
Further weakness Wednesday tested 1.1095 support down to 1.1066, reacting up on FOMC Minutes, but remaining in negative territory under 1.1160. Still overlapping Tuesday”s lows does make it difficult to fulfill the outstanding objective.
Gold Jun Contract (GC, ETF: (GLD))
Tuesday”s plunge to test 1208.50 didn”t extend down Wednesday, so the break wasn”t confirmed. Closing back above 1213.00 would be target a retest of the rally”s 1232.00 target. Closing under 1205.00 would resume the drop, still needing confirmation.
Silver Jul Contract (SI, ETF: (SLV))
Firming slightly Wednesday was too shallow to reverse momentum back up, but it did avoid confirming Tuesday”s break. Closing back above 17.25 would target 18.15.
30-year Treasury Jun Contract (US, ETF: (TLT))
Initially dipping Wednesday to within 1 tick of Tuesday”s 151-28 low was recovered entirely to retest the decline”s 152-02 bounce limit. Having stopped optimistically short of actually touching the low before bouncing, lower lows remain likely.
Crude Oil Jul Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Gapping up slightly didn”t extend higher Wednesday, even in reaction to the EIA report. A second consecutive lower close was avoided, so the likely pullback target of 55.00 isn”t necessarily in-play.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Gapping up Wednesday stopped well short of filling the gap back to Tuesday”s gap up, before reversing into negative territory. Having that unfinished business above does reflect a modest position of strength in greeting Thursday”s EIA report.
Look ahead: Economic Calendar – for Thu May 21 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights:
Thursday”s Philly is the only Fed survey with a track record for influencing price action. And it”s being announced simultaneously with two other reports, one being LEI which is also reliably influential.
Jobless Claims
8:30 AM ET
Chicago Fed National Activity Index
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
*Philadelphia Fed Business Outlook Survey
10:00 AM ET
Existing Home Sales
10:00 AM ET
*Leading Indicators
10:00 AM ET
EIA Natural Gas Report
10:30 AM ET
Kansas City Fed Manufacturing Index
11:00 AM ET
10-Yr TIPS Auction
1:00 PM ET
Stanley Fischer Speaks — hawkish
1:30 PM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET
Livestox is being delayed until
Livestox is being delayed until tomorrow. We”ll be trying a new screen-sharing software, which supports all devices, so I hope everyone can participate. Plus, we”ll be initiating the crowd-sourced portfolio candidates, so your real-time input would be great.
FOMC Hours.
Impending news release is inhibiting the recovery.
The reaction up from 2119.25 probed 1 point above 2125.25. A pullback from there was likely to recover, since it would have originated from a position of strength.
In fact, a pullback did recover. I had not expected so deep of a pullback, all the way down to 2121.00 which was the deepest a pullback would be allowed. So, I still assume that was only a temporary pullback.
Back under 2121.00 would suggest otherwise. This afternoon”s 2:00 ET release of FOMC Minutes is just a couple of hours away. Greeting the news from under 2121.00 would be vulnerable to reacting very poorly, or else to rejecting an initially favorable knee-jerk reaction up.
An attraction remains outstanding above at 2128.50. Greeting the news from under it, but from above 2125.25, would be likelier to react favorably, if not recover from from initially dipping.