Posts by Rod David
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))
Holding 1.0590 support Thursday created an anchor that would allow an intraday dip Friday to fill the gap back to Wednesday”s close. Not only was the gap filled, but Wednesday”s low was also probed — and didn”t recover intraday. Potential to 1.0430 remains intact, but any bounce there has room up to 1.0590 before even suggesting a corrective bounce is forming.
Gold Apr Contract (GC, ETF: (GLD))
Bouncing from an overnight test of 1154.00 was retraced back down to fresh lows Friday. Narrow hovering just under 1154.00 prevented another buy signal. Decisively closing under 1154.00 would have been bearish, but still ranging around it does keep alive the 1161.00 buy signal.
Silver May Contract (SI, ETF: (SLV))
Thursday”s gap up was likely to be retraced, but Friday”s narrow ranging didn”t even probe under Thursday”s low — let alone dip even further to fill the gap back to Wednesday”s close. All while not extending higher. The continued “ineffectual optimism” suggests that a fresh low will be probed next.
30-year Treasury Jun Contract (US, ETF: (TLT))
Fresh lows that recovered up to 160-00 still went out Friday testing the 159-12/159-24 pullback limit. There is no further clarity in the pattern, except that extending the rally at this stage shouldn”t be further delayed.
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
The confirmed sell signal under $50 extended much deeper Friday, probing under 45.00. and still targeting at least a probe under 44.00, if not to 37.15.
Natural Gas Apr Contract (NG, ETF: (UNG, UNL))
Thursday”s negative reaction to EIA was not extended Friday, although the 2.77 buy signal was barely attacked, and not triggered.
Look ahead: Economic Calendar – for Mon Mar 16 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights:
Monday”s pre-open Fed Survey is high-profile, yet has no track record of influencing price action. The morning”s two other reports aren”t even high-profile. But any consistent reaction to the first one or two reports should be repeated by the third.
Empire State Mfg Survey
8:30 AM ET
Industrial Production
9:15 AM ET
Housing Market Index
10:00 AM ET
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET
Treasury International Capital
4:00 PM ET
Bias-down, down, down.
Morning”s bias-down signal continually undermined buy signals.
Buy signals during this morning”s bias-down environment never exceeded their 3-minute highs before reversing down deeper than 4-6 ticks. Although the bias environment has lapsed, that pattern may remain intact. A different behavior to buy signals might alert us to the trend changing, too.
In fact, the most recent sell signal at 2036.50 reacted back up before probing deeper than its first 3 minutes. So, is that a new pattern?
One time does not a pattern make, nor does it invalidate the existing pattern.
But, failing to extend a second sell signal — or exceeding a buy signal”s 3-minute high — would start to suggest that sellers are done. Extendnig higher would start to suggest that this morning”s selling was exacerbated by afternoon sellers accelerating their sales into this morning, ahead of the weekend”s illiquidity.
Then, the only other wrinkle would be that this is the noon hour. Bounces can be counter-trend. Not triggering bias-up could resume the decline, in a very big way.
Afternoon bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2050.75 | 2043.50 |
| …would target | 2057.75 | 2050.50 |
| Bias-down: under | 2036.75 | 2029.50 |
| …would target | 2029.50 | 2022.25 |
| Signal status: waiting for trigger | 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
Look out below if stronger-handed sellers just absorbed yesterday”s buyers.
The pre-open test of this morning”s 2051.50 bias-down signal reacted up to attack 2056.00. The post-open dip to 2049.25 also reacted up, piercing 2056.00 to fill the gap back to yesterday”s close. That failed, too. When the 2051.50 bias-down signal triggered at 10:15, its 2046.75 bias-down target was being tested.
The bias-down target wasn”t exceeded in time to put into play a lower target, but it was still a bias-down environment. And the drop has extended back down 2037.00, probing into Wednesday”s range
A lot of bullishness was rejected this morning. Follow-through from yesterday”s session-long rally, the afternoon”s bullish traction, and this morning”s 2049.25 preliminary low.
The weekend”s impending illiquidity might be exacerbating the drop — afternoon sellers have been enticed to accelerate their sales into this morning, and fence-sitters have been enticed to sell instead of sitting tight. All of that selling pressure will likely be absorbed if the noon hour is entered above 2043.50, if not also above 2046.75.
But not exiting the bias environment in rally mode would be vulnerable to extending down sharply this afternoon, and then into Monday”s open.