Posts by Rod David
Turnabout is fair-play. Thursday afternoon”s
Turnabout is fair-play. Thursday afternoon”s “no-bias trending” required retracing back down to its bias-up signal. Friday afternoon”s no-bias trending required a retracement, too. And that was after probing 7 points under it. That attraction above facilitated a 12-point rally before the close.
That”s a big gain from the low. But does it marginalize sellers, or refuel them? Closing back above the afternoon”s 2071.75 bias-down signal robs sellers of their traction, but closing back above the bias environment”s 2077.50 high would have given buyers traction. The pattern otherwise remains vulnerable to extending down Monday.
Having said that, firming immediately at Monday”s open would be credible for extending the recovery. And if the bullish WedEX is influential, then the morning should rally aggressively. But the burden of proof is currently on buyers, and delaying a recovery Monday could find a greater attraction below to 2050.
Here”s a little more detail in the post-market Wrap:
https://roddavid10.mitel-nhwc.com/join/pcxxhkv
And a reminder for this weekend”s Saturday Review at 9:30am ET. Its link will be available in the morning.
Pre-close view… Last chance for gasp.
Did afternoon plunge step out of bounds?
This afternoon”s bias environment triggered no-bias. That didn”t prevent probing under its 2071.75 bias-down signal. This is called “no-bias trending” and requires revisiting the bias-down signal.
We anticipated yesterday”s probe above its afternoon bias-up signal to retrace for the same reason. Typically, that delayed strength is the work of weak-handed sponsorship. An exception to the retracement is if the bias environment is exited beyond the bias-down target. This would signal that sponsorship was actually strong-handed.
That exception was attempted by testing this afternoon”s 2066.25 bias-down target, down to 2064.50. But the bias environment began lapsing at 2:30 at 2068.50. So, the 2071.75 bias-down signal requires being retraced.
There”s still no assurance of that being today. And it could be a couple of days otherwise.
A bounce testing 2069.00 tried to reverse momentum up. Its reaction down to 2066.75 tried to reverse momentum back down. If either were to gain traction, exacerbated by expiration, the balance of the session should trend relentlessly and considerably.
Daily Spot… Euro bounce target met and held.
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))
Extending the rally overnight fulfilled all of the 1.0845-1.0855 target. No higher target is in-play, but a reversal down must first break under 1.0750.
Gold Jun Contract (GC, ETF: (GLD))
Overnight strength retested 1205.00-1208.50 resistance, at least suggesting 1194.50 support would hold its test. But resistance must be recovered through the close to signal the trend reversing back up.
Silver May Contract (SI, ETF: (SLV))
Resistance at 16.45-16.60 was tested overnight, and held, preventing the trend from yet reversing up. But its recovery remains possible so long as 16.02-16.10 continues holding as support.
30-year Treasury Jun Contract (US, ETF: (TLT))
Thursday”s gap up to 164-22 was reversed down to 163-10, but recovered it to fresh highs above 165-00 — perhaps in a flight-to-safety from the stock market extending its decline. Closing above 164-04 undermines the bearish pattern.
Crude Oil May Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Despite probing above the 56.00 target Thursday, the 55.20 pullback limit remained the same.
Natural Gas May Contract (NG, ETF: (UNG, UNL))
Wednesday”s confirmed breakout didn”t extend higher Friday, and instead rested on its laurels of Thursday”s confirmation having entrenched the recovery leg”s momentum. A higher close remains likely, and I would consider it confirmation of a bigger rally underway.
Fallen and can’t get up. But, fall further?
Greeting the afternoon without trending.
This morning”s drop met its 2072.50 target by 10:15. The only lower low followed a bounce, its RSIs diverged positively with the prior low, and it recovered at least 61.8% of the prior swing.
The morning”s bias environment did not trend. And the noon hour”s sideways range was only narrower. This afternoon”s bias timing window triggered no-bias.
Stability?
Recall my criticism of yesterday”s first hour — not that it”s opening range avoided extending down, but that so much time had elapsed without yet recovering.
Starting from standing still is already difficult. Breaking out from an extended range isn”t easy, either. Stretching the rubber band a little further first may be necessary.
Recovering from a fresh low before weekend illiquidity could generate widespread buying and short-covering. The risk is that probing a fresh low might attract sponsorship to extend down much deeper. Forming this setup before the bias environment lapses would be bullish, but meanwhile the decline is vulnerable to extending.
Look ahead: Economic Calendar – for Mon Apr 20 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights:
Only one Fed survey has a reliable track record of influencing price action, and it”s not Monday”s report from Chicago.
Chicago Fed National Activity Index
8:30 AM ET
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET