Posts by Rod David
Pre-close view… Sellers squelched, buyers burnt.
Blip-up blaps-down.
Friday factors make it nearly impossible to reverse trending that hasn”t yet reversed during the noon hour. Extending trending isn”t so assured.
The bias environment did probe this morning”s high by 2 ticks, piercing 2095.00. Its reaction down to 2092.25 was done when the bias environment began lapsing at 2:30.
That was recovered to another fresh high touching 2096.00. But the final hour was entered back under the 2095.00 prior high. Structurally, that”s potentially bearish. Maybe not very bearish, dealing on the small scale of this afternoon”s range, but not bullish.
Rejecting a fresh that prints AFTER the bias environment exit is less bearish than rejecting a fresh high that printed DURING the bias environment. But, again, it”s not bullish. And its reaction down touched 2092.25.
Extending down should still be limited, if at all, due to Friday factors. But extending above 2095.00-2096.00 is now more difficult.
Daily Spot… Euro meets target but won’t let go, while Gold triggers buy signal
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))
The decline extended Thursday night and fulfilled the likely objective at 1.0585. A bounce there Friday morning was retraced entirely back to its lows. There is no unfinished business below, but there is also no upside momentum.
Gold Jun Contract (GC, ETF: (GLD))
Rallying Thursday night from the original 1994.00 buy signal greeted Friday”s open by gapping up to the next buy signal at 1205.00. That extended higher intraday to probe its 1208.50-1213.00 confirmation range.
Silver May Contract (SI, ETF: (SLV))
Thursday night”s rally greeted Friday”s open already back within the 16.45-16.60 range whose support had failed to hold earlier in the week. Probing above the range”s upper-end momentarily was reversed to probe back under its lower-end, missing a chance to signal that momentum was reversing up.
30-year Treasury Jun Contract (US, ETF: (TLT))
Thursday night”s rally recovered that afternoon”s negative reaction to the monthly 30-year auction. That represented a 61.8% retracement of the cumulative drop from Wednesday”s high, and its resistance pushed back, stopping optimistically short of filling the gap back down to Thursday”s close — and optimism is potentially bearish from a contrarian perspective.
Crude Oil May Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
A fresh low Friday before rallying would have been optimal to finishing out a bottom. At least Friday open did blip-down to 50.08 attacked Thursday”s low before reacting back up. Perhaps it was the usual pre-weekend geopolitical risk premium that enabled the balance of the session to firm back up to Thursday”s high. Regardless of why, a second, less fungible requirement seemed to be fulfilled by ranging around 51.45 — not to become too optimistic before the weekend.
Natural Gas May Contract (NG, ETF: (UNG, UNL))
A second consecutive lower close Friday confirms Thursday”s break under prior lows as now requiring at least an eventual third lower close.
How the rally might leverage today’s Friday factors.
Ranging sideways at this morning”s high.
This morning”s noN-bias environment extended higher to within 1 tick of the 2095.00 bias-up target as the bias environment began lapsing. The noon hour”s low wasn”t much lower at 2092.25.The afternoon”s bias environment began with a dip down to 2091.50.
Essentially fulfilling the target, not extending higher in awhile, narrow ranging through an entire timing window, and a sell-off attempt. Sounds dangerous.
Perhaps.
Meanwhile, the dip down to 2091.50 was actually a blip-down which recovered back to within 1 tick of this morning”s high. Consolidating there for 15 minutes instead of at least probing higher does reflect pessimism, which can be bullish from a contrarian perspective. And this being a Friday, whose morning bias environment trended up to fresh relative highs, printing higher highs during the afternoon bias environment can just extend, and extend, and extend…
One caveat is that probing a fresh high during the bias environment can be bearish if the bias environment were exited back under the noon hour”s 2092.25 low. But that was tried already, and presumably failed.
Don”t underestimate the power of two days of impending illiquidity. A Friday afternoon is a tough time to be fighting the trend.
How the rally might leverage today’s Friday factors.
Ranging sideways at this morning”s high.
This morning”s noN-bias environment extended higher to within 1 tick of the 2095.00 bias-up target as the bias environment began lapsing. The noon hour”s 2092.25 low The afternoon”s bias environment began with a dip down to 2091.50.
Essentially fulfilling the target, not extending higher in awhile, narrow ranging through an entire timing window, and a sell-off attempt. Sounds dangerous.
Perhaps.
Meanwhile, the dip down to 2091.50 was actually a blip-down which recovered back to within 1 tick of this morning”s high. Consolidating there for 15 minutes instead of at least probing higher does reflect pessimism, which can be bullish from a contrarian perspective. And this being a Friday, whose morning bias environment trended up to fresh relative highs, printing higher highs during the afternoon bias environment can just extend, and extend, and extend…
One caveat is that probing a fresh high during the bias environment can be bearish if the bias environment were exited back under the noon hour”s 2092.25 low. But that was tried already, and presumably failed.
Don”t underestimate the power of two days of impending illiquidity. A Friday afternoon is a tough time to be fighting the trend.
[BLPG comments below.] A quick
[BLPG comments below.] A quick note about the SURN and CNAB bounce setups I described during yesterday”s Livestox (one initiated by me, and the other in response to a chart analysis request)… Their strength today is appropriate, but their volume is lacking. The problem may be related to this being a Friday, so be aware of that performance stipulation when considering whether to hold-long through the weekend, or whether even to buy.
Also, there was an interesting question about what stocks might do better in case the Schedule 1 question now being considered were resolved favorably to the cannabis industry. My response is here, but there”s a follow-up question on the Activity Feed looking for subscriber input that I hope you”ll check out…
Which stocks stand to benefit most would be based mostly on how much their models depend on the scheduling. For example, is that as much an issue to pharmaceuticals as it is to dispensaries? Also, what would a favorable ruling do to BLPG — how much does its competitive edge depend on essentially having exclusivity to the market, which would melt away if Federally chartered banks were suddenly no longer inhibited from taking cannabis deposits? None of which is a charting or technical analysis consideration. Maybe BLPG long could be considered a hedge against an otherwise unfavorable ruling.