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))
Tuesday”s gap down filled the gap back down to Monday”s gap down, proving Monday”s session (gapping down then reversed into positive territory) was “ineffectual optimism.” Tuesday”s gap down, which then hovered in negative territory without extending any lower, was “ineffectual pessimism” that neutralized Monday”s impatient buying. Recovering above Monday”s 1.1350-1.1360 highs would target 1.1425 and potentially 1.1540.
Gold Apr Contract (GC, ETF: (GLD))
The decline”s 1231.80 target was retested Tuesday. The decline can resume so long as 1236.70 now holds as resistance. Closing back above 1244.50 would trigger a bigger bounce with potential to 1257.00.
Silver Mar Contract (SI, ETF: (SLV))
Monday”s gap up was an inside day compared to Friday”s decline. So was Tuesday”s gap down that mostly ranged sideways. Back under 16.80 would at least target a retest of Friday”s 16.55 low. But closing first above 17.15 would trigger a bigger bounce to 17.40.
30-year Treasury Mar Contract (US, ETF: (TLT))
Tuesday”s gap down ranged around Friday”s 147-01 low, with room to 146-14 before a lower close would confirm a deeper drop underway targeting 144-16.
Crude Oil Mar Contract (CL, ETF: (USO, UWTI))
Monday”s test of last week”s high up to 54.00 barely held its 52.85 pullback limit, and Tuesday”s probe under 51.75 reversed momentum down intraday to probe under 50.00. Closing back above 52.85 is needed to launch another upleg.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
The bottoming potential tried again to gain traction Tuesday, surging through the 2.70 buy signal, which was still being overlapped. A second consecutive higher close on Wednesday would greet Thursday”s EIA report from a position of strength.
Look ahead: Economic Calendar – for Wed Feb 11 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday”s econ calendar would be irrelevant, if not for the Fed speaker. His hawkish views are well-known, like Tuesday”s pre-open Fed speaker, so any negative knee-jerk reaction should also be only temporary.
MBA Purchase Applications
7:00 AM ET
Richard Fisher Speaks — hawk
8:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
10-Yr Note Auction
1:00 PM ET
Treasury Budget
2:00 PM ET
Back up the up staircase.
Backing-and-filling done. Again.
Exiting tThe bias environment above 2047.00 and 2049.75 already signaled the open”s drop had ended, and momentum is reversing up. The noon hour”s entry was testing 2053.00, and now a surge is probing fresh session highs up to 2056.50.
Like yesterday, backing-and-filling through the morning has opened the door to trending higher through the noon hour. And like yesterday, it is not only optimal, but appropriate. So, like yesterday, not exiting the noon hour at fresh session highs would keep the door open to another afternoon downdraft.
Unlike yesterday, today gapped up. This morning”s buyers have been playing defense. Yesterday”s buyers never reversed the open”s gap down. Now there is more at stake — so, more sponsorship for the rally, and a greater bearish consequence if this attempt fails.
Afternoon bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2061.75 | 2056.50 |
| …would target | 2066.50 | 2061.50 |
| Bias-down: under | 2052.50 | 2047.50 |
| …would target | 2047.25 | 2042.00 |
| Signal status: NO-BIAS, TESTED BIAS-UP SIGNAL | 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
Down the up staircase.
The first several minutes are critical to extending an opening gap. Overnight trending doesn”t yet have intraday sponsorship. So, it can attract counter-trend sponsorship that reverses it.
That was the possibility discussed pre-open about this morning”s reaction to the anti-Grexit leak. Not exiting the open above 2053.00 made the bias-up unlikely to be exceeded. And still overlapping 2050.75 didn”t make the bias-up any likelier to trigger at all.
In fact, bias-up triggered at 10:15, but was invalidated at 10:30. The alternative pattern — backing-and-filling to 2044.00-2046.00 — has been fulfilled.
Exiting the bias environment at 11:30 back above 2047.00 would start to signal the post-open dip had ended. Back above 2049.75 would start signaling momentum is reversing up to resume the rally. But exiting the bias environment under 2041.00 would undermine the recovery near-term.