Posts by Rod David
Good morning! An interesting week
Good morning!
An interesting week lies ahead. The earnings onslaught enters its second week, the State of the Union is tomorrow night, and Oscars are awarded over the weekend. None of which has anything to do with the broader market, not at this stage. Earnings influence is limited to its first week, and SOTU has nothing to do with the market. Oscars might be the most relevant item.
But two Central Banks (BOJ and ECB) are scheduled to make policy statements, and markets got excited for that. Having fallen to fresh lows last week, markets took a victory lap for having avoided the precipice. This morning”s trading is fading the optimism, as Europe”s exchanges prepare to close.
Updates to know:
CLF — Closing above its 8.80 resistance already signaled momentum reversing up, but a pullback has room to test 8.15 as support.
NFLX — Earnings due after the close.
Crude Oil — Still ranging around the decline”s targets, with time running dangerously short for launching a rally, (Specific triggers for futures traders are available in my Futures Timing service).
CDE — Had begun rallying before Silver”s recovery, and now only retesting its recent higher.
AMZN — Reversed a positive open to probe deeper into negative territory and threaten tumbling to new lows.
FEYE — Never touched 36.50 so never rejected it, would get a second bite at that apple back above 34.
EAPH — Consolidation around .0262 resistance has formed an Ascending Triangle no threatening to break higher.
CANN — Formed a Symmetrical Triangle that would be triggered above 9 and targeting 10.90.
Be careful with the MJ sector. Stocks like TAUG that have yet to validate not-so recent surges, or like TRTC that continue scraping support, are probably among the more vulnerable in case of a selling wave which is coming due.
Post-open review
Optimistic, to the very last drop.
After Sunday night”s 2023.75 high had dipped to Monday morning”s 2003.00 low, Tuesday”s pre-open recovery extended to 2026.50. Dipping back under the 2021.50 and 2018.75 pullback limits started signaling momentum was reversing down.
Reversing down was not assured, because the pullback limits were being probed pre-open. They were taken more seriously when a post-open bounce reacted down from touching this morning”s 2022.75 bias-up target as resistance.
Rejecting tests of both bias-up parameters put into play tests of both bias-down parameters — both the 2016.50 bias-down signal and the 2001.00 bias-down target. The latter was just attacked to within 1 tick.
Bearish WedEX? Not, yet. This has only retraced Friday”s late-afternoon rally. Retracing Friday afternoon”s 1997.00 low still would not fulfill a bearish WedEX. Maybe another 10 points lower.
Anyway, the reaction up from attacking 2001.00 could signal momentum reversing up by exiting the bias environment at 11:30 back above its 2007.50 bias-down signal. Meanwhile, back under 2003.00 would open the door to extending the decline this morning.
As this morning”s Market Tour
As this morning”s Market Tour was discussing which pullback limits could start signaling the overnight rally was reversing, said pullback limits began giving way. Did that remove the froth from this extended weekend rally?
https://roddavid10.mitel-nhwc.com/join/cxwxcvx
The First Trade.
Proper context can start the day with a solid win and make all the difference.
Enter the Chartroom here (pre-open Market Tour begins at 8:55 ET)
Through the prior close…
Friday”s expiration had recovered from probing fresh lows overnight down to 1970.00. Extending the recovery wasn”t embraced initially, but a rally eventually got underway to test 2005.00. Friday”s late-afternoon surge tested 2014.00.
Overnight action”s new info…
Sunday night soon extended that nearly 10 points to attack 2024.00. Crashing China stocks were the catalyst for a pullback to Monday morning”s 2003.00 low. That has now been recovered entirely to test and retest 2024.00 by 3 ticks.
If, then…
WedEX”s bearish influence might have been responsible for how late Friday afternoon”s ranging finally broke higher, but that has since extended. Friday afternoon”s ranging formed a Symmetrical Triangle whose breakout might be false, and preparing to reverse down more substantially — exceeding Sunday night”s highs through this morning”s open would avoid that. Extreme optimism is being tested now, with MS just moments ago joining last week”s earnings misses by BAC, JPM and GS. Of course, the previous misses helped to cushion the MS reaction, and now the biggest investment banks” earnings are all history.
First Trade…
Exiting the open at 9:45 back under 2018.75 would be unlikely to exceed the 2022.75 bias-up target through 10:15, which would avoid renewing the bias-up signal. Back under 2012.25 would be unlikely to trigger the 2016.50 bias-up signal, putting into play tests of both bias-down parameters.
Look ahead: Economic Calendar – for Tue Jan 20 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Several housing sector reports this week begin with Tuesday”s post-open report. Its track record isn”t reliable for influencing price action, but it will help to establish a touchstone for comparing further results. Meanwhile, the quarterly earnings onslaught continues.
Housing Market Index
10:00 AM ET
*Jerome Powell — centrist
10:00 AM ET
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET