Posts by Rod David
Coming into Friday without an
Coming into Friday without an overnight plunge meant the market was changing stages. Left behind is its distributive stage, and the new stage being entered should briefly probes new highs, probably aggressively while it does.
Apparently, there”s a stage between them. Sellers didn”t gain any traction Friday, but buyers barely dipped their toe in the water. It”s as if mommy just returned their toy after they played with it dangerously in the house. They”re going easy until being sure no one”s watching too closely and ready to pounce on their excitement.
So, Thursday”s breakout was not confirmed by a second consecutive higher close. And Friday”s proximity to new highs wasn”t exploited by a new high close. Either of these conditions would have entrenched the uptrend. Sellers didn”t do anything about it, but they do seem to be watching, closely.
We”ll discuss the bigger picture, game out Sunday night and Monday morning strategies, then review your stock chart analysis requests… all in the weekend”s Saturday Review at 9:30am ET. Its link will be posted/emailed in the morning.
Meanwhile, here”s the recording of Friday”s post-close Wrap:
https://roddavid10.mitel-nhwc.com/join/rkrbrmz
Pre-close view… No squeeze.
Hovering at the highs wasn”t exploited.
The bias environment was exited at 2113.00, still within the noon hour”s range, and didn”t improve from there. Another 3 ticks higher would have triggered a short-squeeze into the weekend. Instead, a drop tested 2109.00.
Now the final hour has been entered under the bias environment”s range. Trending even lower through the 3:10-3:20 timing window would point down into the close. But it would be too late to give sellers traction for their effort, which needed to begin at the bias environment”s exit.
Under 2108.50 could extend to attack 2104.00. Back above 2111.25 would be attracted back to session highs, but not necessarily higher soon enough to confirm yesterday”s breakout.
Daily Spot… Gold’s sell signal already fulfilled?
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 Mar Contract (EC, ETF: (FXE, UUP))
Thursday morning”s setup targeting a probe above 1.0900 was fulfilled already overnight. Its reaction down Friday morning was recovered to at least hover around 1.0855.
Gold Jun Contract (GC, ETF: (GLD))
Thursday”s bounce held the 1194.50 sell signal”s 1197.50 bounce limit. Despite not immediately confirming Wednesday”s sell signal, Friday compensated for the delay by dropping more than $20 to the 1170.00-1174.00 target area”s upper-end.
Silver May Contract (SI, ETF: (SLV))
Fresh lows Friday down to 15.55 keep the decline”s momentum intact so long as bounces now hold 15.85-15.90.
30-year Treasury Jun Contract (US, ETF: (TLT))
Thursday”s open and close both tested the 162-00 bounce limit, which extended higher Friday to probe 163-00. Room up to 163-18 remains alive so long as 162-00 now holds as support, and its break would resume the decline.
Crude Oil Jun Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Thursday”s bounce was undermined Friday by dipping back down to 56.68 pullback limit instead of extending higher to probe above 57.70 for a second consecutive session.
Natural Gas May Contract (NG, ETF: (UNG, UNL))
Firming Friday would have helped to confirm that Thursday”s gap down didn”t damage the potential bottoming pattern. But the session ranged flat-to-lower into the weekend. Closing above 2.57 would still signal the drop had ended, and closing above 2.60 would launch an upleg targeting the 2.80 area.
In the absence of selling…
The opposite of down might be a squeeze.
This afternoon”s 2114.75 bias-up signal (also this morning”s) was the noon hour”s high. The noon hour had been entered under the morning”s 2113.00 high, and the reaction down fell back under the morning”s high. This is the basis for a “lunch hour reversal” setup.
The rest of the setup didn”t develop. That would have extended down under the 2111.00 noon print, through the 1:00-1:20 noon hour exit. At 1:20, the morning”s 2113.00 high was being retested. No lunch hour reversal.
Also, not a bias-up. This is a no-bias environment. Trending up during it is unlikely, or would be “no-bias trending” that requires retracement.
But the bias environment will lapse at 2:30. Its constraint will become irrelevant 10-15 minutes prior. And since sellers failed to exploit the noon hour”s weak exit, buyers may yet exploit the bias environment exit”s strength.
Hovering 1-2 points either way around 2113.00 would remain vulnerable to trending higher through the bias environment”s exit. And this being a Friday, sitting at new highs, that could take on short-squeeze characteristics. Be careful not to get caught short if the bias environment isn”t exited under 2110.00-2111.00.
Look ahead: Economic Calendar – for Mon Apr 27 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights:
Monday”s PMI report isn”t very influential, but it”s the most relevant item Monday, and it”s a Monday. The Dallas Fed survey has no track record of influencing price action.
PMI Services Flash
9:45 AM ET
Dallas Fed Mfg Survey
10:30 AM ET
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET
2-Yr Note Auction
1:00 PM ET