Posts by Rod David
Morning bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2131.50 | 2128.50 |
| …would target | 2136.50 | 2133.50 |
| Bias-down: under | 2122.25 | 2119.25 |
| …would target | 2117.25 | 2114.25 |
| Signal status: NO-BIAS, TESTED BIAS-DOWN SIGNAL | 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.
The air is certainly thin
The air is certainly thin up here. Yesterday”s new highs tried extending overnight, but this morning”s open trended back down. This afternoon”s highs probed above yesterday”s range, momentarily, before being reversed back under this morning”s low. And this area isn”t arbitrary, but rather a meaningful resistance point or potential target for the rally.
We”ll look at this more closely in tomorrow”s Livestsox, along with Crude and Gold. We”ll also start the process of crowd-sourcing our portfolio picks — your chart analysis requests will be reviewed as usual, but then the group will decide which ones we place orders for.
Pre-close view… Is this unfolding already?
New high”s reaction down is extending.
An offsetting test of this morning”s 2119.25 bias-down signal was put into play by holding the 2127.25 bias-up signal”s test through 10:15. And then by failing the attempt to recover 2127.25 by 10:30. And then by failing the attempt to recover 2127.75 by 11:30.
All the while, price was trending up. Higher highs and higher lows formed an Ascending Triangle that persisted through the noon hour. The pattern projected a false break higher, which reversed down from its 2129.50 target area.
That reversal down has extended to fresh session lows. Both 1-minute and 3-minute RSIs ere oversold at the 2121.25 low, requiring its retest. A 4-point bounce may not have prevented the drop from resuming today.
Regardless of the bounce”s resolution today, the reaction down from overnight highs should be alarming.
– The 2128.00 target was met yesterday,
– the room for noise up to 2133.00 was tested,
– the overnight high is not a new “Globex trending extreme” requiring intraday retest,
– and probing above yesterday”s high intraday (up to 2130.25 this afternoon) was reversed to a fresh session low.
The bigger picture still expects the ultimate high to be shallow and to be reversed abruptly into a durable downleg. Not exceeding today”s highs through tomorrow”s close might be due to already trending down sharply.
Daily Spot… Euro trashed.
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))
Monday”s 1.1370 sell signal extended down sharply overnight. Last Monday”s 1.1135 prior low held its retest, but the break was confirmed so at least an eventual third lower close is now required. Closing under 1.1095 would trigger a bigger pattern”s break targeting 1.0900 and 1.0750.
Gold Jun Contract (GC, ETF: (GLD))
Monday night”s drop probed under the 1224.00 pullback limit and extended down sharply intraday to test 1208.50 down to 1205.00. Still overlapping 1208.50 at the close does offer one opportunity to recover, which would be to close Wednesday back above 1213.00 and not confirm Tuesday”s break. Otherwise, new lows under 1160.00 may be in-play.
Silver Jul Contract (SI, ETF: (SLV))
Monday”s close above prior highs was rejected by gapping down Tuesday under Monday”s range, and extending down to probe under 16.90. The timing of the aggressive move is a little surprising, but it still lacks confirmation of a second consecutive lower close.
30-year Treasury Jun Contract (US, ETF: (TLT))
Monday night”s bounce held the 154-12 bounce limit and extended down Tuesday morning to 151-28. Its reaction up probed the intraday 153-02 bounce limit up to 153-21. That was reversed back down to 152-18, whose break would confirm 150-25 remains in-play.
Crude Oil Jul Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Tuesday”s gap down under 59.20 support all but ends the recent opportunity for the pullback limit”s retest to launch a more durable rally leg. There is only one opportunity to reject it immediately Wednesday. Confirming it would initially target 55.00.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Gapping up Tuesday without any unfinished business above left the rally vulnerable to a post-open reversal from 3.19 into negative territory at 2.94. But the open”s 3.08 gap should be retested as resistance before a durable downleg can begin.
Look ahead: Economic Calendar – for Wed May 20 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights:
With the rolling projections for a Fed rate hike going from June to September and even to December, Wednesday”s FOMC Minutes can cause greater than usual volatility as its wording is dissected in search of guidance. Good luck.
MBA Mortgage Applications
7:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
*FOMC Minutes
2:00 PM ET