Posts by Rod David
Trading Plan for 2/12
If the WedEX setup is applicable to 3-day weekends… then Wednesday”s close isn”t bullish. That”s because the intraday probe above prior highs was rejected, which normally would be passively bearish. But the probe”s brevity lacked substance, so rejecting it isn”t very relevant either.
Pattern points… (Setups and technicals)
Whether or not it was the result of the pins and needles we discussed before Wednesday”s open, Tuesday afternoon”s buyers weren”t very well rewarded for having gained traction. The overnight slide to 2057.75 was retraced back into positive territory, but not above Tuesday”s 2066.00 highs, and not with complex trending.
“Unfinished business above” at 2067.25 was created and left outstanding to attract price back up. Then its attraction was neutralized when tested during Wednesday afternoon”s rally up to 2069.75.
That afternoon rally did probe above Tuesday”s highs. But it was only a single probe, and not complex, which still wouldn”t qualify as rewarding Tuesday afternoon”s buyers.
Meanwhile, the noon hour”s drop to 2053.25 left outstanding oversold RSIs that require the low”s retest. The afternoon”s 2052.25 bias-down target was left outstanding, too.
What”s Next… (Outlook and opportunities)
There is no unfinished business above, only below. A hold-short setup triggered, which barely avoided being invalidated, by delaying the last-minute recovery above 2063.50 until after getting to within 3 minutes of the cash session close. Trending down overnight is likely so long as 2067.00 holds as resistance — preferably with Globex opening down sharply through the late 2061.00 low.
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))
Tuesday”s “ineffectual pessimism” wasn”t rejected immediately Wednesday. That wasn”t required, but it would have been optimal to establishing a low had formed. The delay could be dismissed considering the Eurogroup meeting, so long as the retest of Tuesday”s low holds.
Gold Apr Contract (GC, ETF: (GLD))
Having formed a Descending Triangle off of Monday”s corrective bounce, Wednesday”s break to a fresh low now requires a second consecutive lower close to confirm the next downleg underway, ultimately targeting 1185.00-1195.00. Closing back above 1226.00 would start to signal Wednesday”s breakout is false.
Silver Mar Contract (SI, ETF: (SLV))
Wednesday”s selling originates from a higher level that help to avoid fresh lows. That”s not necessarily bullish, and it does help to confirm that Monday”s bounce was only a temporary correction.
30-year Treasury Mar Contract (US, ETF: (TLT))
Another fresh break Tuesday was not confirmed by a second consecutive lower close Wednesday. In fact, a fresh low was reversed back up into positive territory. This sequence can repeat indefinitely, but tends to end with a steep rally — but beware of Thursday”s 30-year auction results.
Crude Oil Mar Contract (CL, ETF: (USO, UWTI))
Tuesday night”s dip continued the reaction to the last upleg having failed to hold 52.85 and 51.75. The 49.35 pullback limit was tested intraday down to 48.00 before bouncing back to 50.00. Closing back above 49.35 suggests the pullback has ended, and it was being overlapped through the afternoon.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Tuesday”s test of the 2.70 buy signal was still being overlapped at the close instead of breaking decisively. Wednesday”s gap up to test 2.85 suggests the break is valid. I”m giving the pattern a benefit of the doubt that Thursday”s EIA report is being greeted from a position of strength, at least to recover from an initially negative knee-jerk reaction down.
Livestox, February 11 2015
Wednesday”s Livestox covers the following stocks and markets in the following order. But also important is the opening discussion of managing entries, with two or three ways to limit risk.
AAPL
ES / S&Ps / market
Greece
Crude Oil / CL
RIG
CLF
BTU
FEYE
TSLA
TWTR
FB
BABA
GPRO
MDBX
FITX
ATTBF
ACT
CRL
FSLR
DO
Mistaken identity?
No surprise: Spike up in reaction to headline surprise.
A headline-sensitive market in a headline-rich environment continues to twist and turn like a tennis match.
Trending down through the noon hour”s second half fell 11 points from 2064.50 to 2053.25. The 2057.50 bias-down signal triggered along the way. Its 2052.25 bias-down target was attacked to within 4 ticks.
Oversold 1-minute and 3-minute RSIs at the low require its retest. That is regardless of the bias-down target”s calculation, and whether 4 ticks is close enough to neutralize its attraction (1 more tick is normally required).
And its retest was in process, after bouncing back to 2057.50. Then a Ukraine-related headline triggered a 7-point spike up to attack 2062.00. Its being retested now after another dip held 2057.50.
This afternoon”s bias-down signal and unfinished business below undermine the upside. But they don”t prevent it. Unfinished business above remains outstanding. back up through 2064.50 would confirm fresh highs are in-play prior to revisiting today”s low. Back under 2059.25 would target fresh lows. Again.
Look ahead: Economic Calendar – for Thu Feb 12 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Thursday morning”s econ reports include Retail Sales, which has become increasingly influential. But the afternoon”s 30-year auction may have more influence, both inhibiting price action ahead of the results, and then freeing up a reaction afterward.
Jobless Claims
8:30 AM ET
*Retail Sales
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
Business Inventories
10:00 AM ET
EIA Natural Gas Report
10:30 AM ET
*30-Yr Bond Auction
1:00 PM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET