Posts by Rod David
Pre-close view
The rally gains traction.
Being a no-bias environment still allowed room to the 2070.25 bias-up signal. A buy signal that triggered at 2066.00 got there, and then extended higher into the final hour to 2073.50
That”s the minimum objective for this signal, with potential also to 2074.75.
The rally gained traction by exiting the bias environment at 2:30 above the noon hour”s high, and then entering the final hour above the bias environment”s high. Traction isn”t a timing signal — it doesn”t immunize the balance of the session from dipping. But it does suggest that a reaction down would be recovered.
Simultaneously overbought 1-minute and 3-minute RSIs suggest the same. The rally is entrenched, if a reaction down must recover.
Often, entrenched trending will take advantage of that safety to retrace. This entrenched rally is also vulnerable to a retracement, now being 7-1/2 points above the 2066.00 buy signal, testing its 2073.50 target, and having oversold RSIs.
But that”s not a sell signal, and a fresh high at 2074.75 remains possible. Not reversing down from there could be squeezed sharply higher through the close.
Daily Spot
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))
Gapping up and trending higher through Monday morning retraced 61.8% into the Complex Triangle that defined Thursday”s pattern. The test of 1.0625 then ranged around Thursday”s 1.0590 low. Closing above 1.0560 1.0650 would target 1.0855, but any delay would more likely test Friday”s low down to 1.0430.
Gold Apr Contract (GC, ETF: (GLD))
Having dipped back down to 1154.00 one time too many Friday, the recovery scenario became less likely than a retest of 1148.00. In fact, despite probing above 1161.00 Sunday night, Friday”s lows were probed Monday down to 1149.30. Now 1146.50 and 1141.00 are likely to be tested, too, unless the 1161.00 buy signal is recovered.
Silver May Contract (SI, ETF: (SLV))
Monday”s gap up extended to probe above the prior three days” highs to 15.75. But a reversal soon filled the gap back down to Friday”s 15.50 close. The balance of the session ranged sideways, still having difficulty improving while the lower gap back to last Wednesday”s 15.37 gap remains unfilled.
30-year Treasury Jun Contract (US, ETF: (TLT))
Ending the week while still holding 159-12/159-24 support produced a gap up Monday above 160-00. Closing above it would signal a new upleg underway. The majority of Monday”s session hovered pessimistically short of touching Thursday”s 160-26 high, which is potentially bullish from a contrarian perspective.
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Sunday night”s open plunged to test 43.60, fulfilling the decline”s minimum target of a new low in the $43 handle. Its reaction up to 44.70 was reversed even lower to 42.85, but still recovered to touch 44.00. The $43 handle apparently offers a lot of support. Closing back above 44.30 would signal that at least this downleg had ended. Until then, the decline”s next lower target would be 37.15.
Natural Gas Apr Contract (NG, ETF: (UNG, UNL))
Monday”s gap down held Friday”s gap down in the 2.70. area. Avoiding even an intraday probe of fresh lows does suggest “ineffectual optimism,” which is potentially bearish from a contrarian perspective. Closing above 2.77 and 2.84 can still form a bottom and launch a rally leg.
Look ahead: Economic Calendar – for Tue Mar 17 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights:
Tuesday”s housing sector report doesn”t have much of a track record for influencing price action. But it”s profile is raised by essentially being the only somewhat influential report.
*Housing Starts
8:30 AM ET
Redbook
8:55 AM ET
4-Week Bill Auction
11:30 AM ET
Afternoon bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2077.75 | 2070.25 |
| …would target | 2083.25 | 2075.75 |
| Bias-down: under | 2067.25 | 2059.75 |
| …would target | 2060.50 | 2053.00 |
| Signal status: NO-BIAS | FAQ | |
| INTRO VIDEOS #1 and #2 | ||
1. At 1:20, 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 1:20 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 1:20 would invoke a grace period through 1:30 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 1:30 after invoking the grace period would trigger “noN-bias,” with no bias influence.
Post-open review
Bias-up to the nth degree.
The pre-open pullback held its test of this morning”s 2049.00 bias-up signal. Its 2055.25 bias-up target was probed before the open. The open”s first 5 minutes continued overlapping the target.
Then it exploded higher.
It”s always possible that greeting the new week with extreme sentiment proves to be a sentiment extreme. But sometimes, an exploding cigar is just an exploding cigar. Exploding higher more than halfway through the opening 15 minutes of volatility should be rejected immediately, or else it”s not likely to be rejected at all.
In fact, the balance of the bias timing window trended higher through 10:15, testing the 2066.00 doubly-renewed bias-up target. Meanwhile, 3-minute RSI was overbought and 1-minute RSI was diverging negatively.
A sell signal is being tested back under 2063.50, but has yet to confirm. That”s a sell signal because it is support, and its support may hold without allowing a deeper pullback. Back above 2065.50 would signal the rally had resumed already.
Regardless, this being a bias-up environment — and being that the ultimate objective of this leg is to test the 2070.00 area — any reaction down is likely to be only temporary, probably recovering from either 2058.50 or 2056.00. Entering or exiting the noon hour under 2053.50 would be the nearest signal that the trend may be reversing back down.