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))
Retesting Thursday”s 1.1575 low down to 1.1525 didn”t contain intraday selling pressures, which extended deeply to 1.1467. But the afternoon recovered both 1.1525 and 1.1575. Extending above 1.1615 would trigger as steep of a recovery attempt targeting 1.1780.
Gold Feb Contract (GC, ETF: (GLD))
Extending higher Friday confirmed Thursday”s breakout that was produced by the SNB capping the Franc. At least one more eventual higher close is required. Meanwhile, 1287.70 is in-play.
Silver Mar Contract (SI, ETF: (SLV))
Friday”s breakout to 17.85 must be confirmed by a second consecutive higher close. But the nearest sell signal is under 17.20.
30-year Treasury Mar Contract (US, ETF: (TLT))
The lower target of 151-08 and 151-28 was met at Friday”s high, which reacted back down to 149-05. The same session containing a new trend high is incapable of triggering a sell signal, but falling under 148-23 would start reversing the trend down.
Crude Oil Feb Contract (CL, ETF: (USO))
Recovering back above 47.45 Friday only attacked 48.65 whose recovery would signal a new upleg underway.
Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
Choppy sideways ranging Friday continued the process of backing-and-filling the recent upleg so another buy signal could form.
Meet the new Central Banker — a cannabilistic Willie Sutton.
“Because that”s where the money is.”
— Willie Sutton, 1930”s bank robber,
when asked why he robs banks.
Perhaps yesterday”s action by the Swiss had much more impact beyond the Franc. It is the surprise they managed, and what that reveals about a new phase of how Central Bankers will start acting.
Uncapping the currency so surprisingly means more than keeping their plans quiet in advance. They outright lied, as the statements they had been making up to the prior day are now proved as entirely misdirecting.
To be sure, I”m not breaking the news that one Central Bank has been caught lying. That evidence pile has been growing taller for years.
The greater impact is whom the SNB lies affected, and to whom they lied — which, apparently, is everyone. Central Banker lies previously could at least be assumed as part of a coordinated strategy. Viewed through that prism, their eventual effects could be deduced, weighed and discounted. Life went on.
Markets could function in that regime because the collective powers-that-be could function in that regime. Emphasis on the word, “collective.” Times change. Surely, SNB isn”t the first among its co-conspirators to have noticed what the common sensical world has long known — their monetary manipulations are not helping. Their moves benefit a tiny fraction of the already well-off, while harming the condition and prospects of the vast majority.
Years of suppressing interest rates and of perverting price discovery has painted Central Banks into a corner. The economic fat they”ve been nibbling at for years by fiat has been reduced to just skin and bones. SNB probably isn”t the first gang member to notice — it is just the first to act. With respect to John Nash, the equilibrium in a non-zero sum game will tilt uncontrollably as the total sum approaches zero.
Where do cannibals turn when all other tribes have been devoured? On each other. And when you”re a member of the Central Banker tribe, well, Willie Sutton knew… that”s where the money is.
To call this a watershed moment is an understatement. But that”s where my analysis of it leaves off, since Central Banks aren”t otherwise my expertise. Analyzing the tools and effects of their meddling isn”t in my bag of tricks. I assume that very few of those who do carry that analytical bag were expecting this surprise would be found among the Central Banks” bag of tricks.
What shall we label this particular Central Bank trick? My suggestion would be to call it, “telling the truth.” Again, they”re not my specialty, so I”m not sure whether this concept can even apply to their kind. How wonderful it would be if all Central Bankers were to always play truthfully with the rest of us.
But, how violent the path from here to there.
Meet the new Central Banker — a cannabilistic Willie Sutton.
“Because that”s where the money is.”
— Willie Sutton, 1930”s bank robber,
when asked why he robs banks.
Perhaps yesterday”s action by the Swiss had much more impact beyond the Franc. It is the surprise they managed, and what that reveals about a new phase of how Central Bankers will start acting.
Uncapping the currency so surprisingly means more than keeping their plans quiet in advance. They outright lied, as the statements they had been making up to the prior day are now proved as entirely misdirecting.
To be sure, I”m not breaking the news that one Central Bank has been caught lying. That evidence pile has been growing taller for years.
The greater impact is whom the SNB lies affected, and to whom they lied — which, apparently, is everyone. Central Banker lies previously could at least be assumed as part of a coordinated strategy. Viewed through that prism, their eventual effects could be deduced, weighed and discounted. Life went on.
Markets could function in that regime because the collective powers-that-be could function in that regime. Emphasis on the word, “collective.” Times change. Surely, SNB isn”t the first among its co-conspirators to have noticed what the common sensical world has long known — their monetary manipulations are not helping. Their moves benefit a tiny fraction of the already well-off, while harming the condition and prospects of the vast majority.
Years of suppressing interest rates and of perverting price discovery has painted Central Banks into a corner. The economic fat they”ve been nibbling at for years by fiat has been reduced to just skin and bones. SNB probably isn”t the first gang member to notice — it is just the first to act. With respect to John Nash, the equilibrium in a non-zero sum game will tilt uncontrollably as the total sum approaches zero.
Where do cannibals turn when all other tribes have been devoured? On each other. And when you”re a member of the Central Banker tribe, well, Willie Sutton knew… that”s where the money is.
To call this a watershed moment is an understatement. But that”s where my analysis of it leaves off, since Central Banks aren”t otherwise my expertise. Analyzing the tools and effects of their meddling isn”t in my bag of tricks. I assume that very few of those who do carry that analytical bag were expecting this surprise would be found among the Central Banks” bag of tricks.
What shall we label this particular Central Bank trick? My suggestion would be to call it, “telling the truth.” Again, they”re not my specialty, so I”m not sure whether this concept can even apply to their kind. How wonderful it would be if all Central Bankers were to always play truthfully with the rest of us.
But, how violent the path from here to there.
Isn’t “bearish” supposed to trend down?
Bearish WedEX hasn”t yet stretched its legs.
Having invalidated the morning”s bias, probing above its signal was NOT “”no-bias trending.” That would otherwise require retracing the subsequent rally to 2000.75.
Meanwhile, just having opened under yesterday”s low and the overnight highs should doom to failure the morning”s bounce. It”s certainly impressive how much the bounce has stretched its rubber band. Two sell signals have triggered and probed deeper than their first 3 minutes, but only to bounce back above a failed buy signal.
And the market was still hovering at session highs with noon fast-approaching. Also fast-approaching was the bearish WedEX influence.
Still testing the morning”s 1995.50 bias-up target as the bias environment lapses is not necessarily bullish. But exiting the bias environment under its 1989.75 bias-up signal would have been bearish.
Beware that the bearish WedEX may be invalidated if the noon hour were to trend any higher. It”s probably too late to invert and be bullish. Regardless, triggering bias-down upon exiting the noon hour would confirm WedEX.
Afternoon bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2006.50 | 1999.75 |
| …would target | 2012.50 | 2005.75 |
| Bias-down: under | 1995.75 | 1989.00 |
| …would target | 1990.25 | 1983.50 |
| Signal status: STILL TESTING BIAS-UP SIGNAL, TESTED BIAS-UP TARGET | 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.