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 Sep Contract (EC, ETF: (FXE, UUP))
Wednesday’s wobbly open recovered a gap down to actually probe back above Monday’s close (which Tuesday’s recovery barely did) before reversing down to fresh session lows. Breaking back under Tuesday’s open extended to 1.1725, which must hold to allow a near-term retest of 1.1850 instead of retesting 1.1610 and lower.
Gold Aug Contract (GC, ETF: (GLD))
Tuesday’s close back above 1254.50 after having dipped overnight to 1248.50 had indicated the reaction down didn’t gain traction. But a second consecutive higher close was needed to confirm. And now closing back under 1248.50 is signaling fresh lows in-play, targeting 1237.50.
Silver Sep Contract (SI, ETF: (SLV))
Closing back above 16.07 Tuesday had signaled the overnight test of 15.93 held. But retracing it overnight again has probed back under 15.85. A lower close would trigger a new downleg.
30-year Treasury Sep Contract (US, ETF: (TLT))
Surging overnight off the Mon-Tue test of the 145-02 sell signal attacked the 145-25 buy signal before reversing back down intraday Wednesday.
Crude Oil Aug Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Flat-to-lower ranging Wednesday tested the 72.90 pullback limit and then broke sharply lower to trigger the 71.05 sell signal. Last week’s gap up above all prior highs has foregone its retest, but the rally’s 75.30 target has held.
Natural Gas Aug Contract (NG, ETF: (UNG, UNL))
Slightly lower lows overnight were recovered into Wednesday’s open and firmed to test 2.82 resistance. Regardless, just closing at or under 2.82 maintains the decline’s momentum.
Mid-day Update… The tariff dip’s grip persists.
Morning bounce retraces fully.
Rallying out of the 2778.50 open got to 2784.00 where a reaction down was likely. Reactions down, plural, failed to reverse momentum down. Higher highs attacked 2788.00. Then breaks under 2784.00 probed under the open down to 2775.50.
Probes, plural, under the open. Which all held this afternoon’s 2776.50 bias-down signal to avoid triggering.
Coincidentally… unless Secretary Mnuchin is monitoring… a headline almost immediately followed, triggering a 5-point surge that extended to attack 2783.00. It was non-financial, and has now been retraced back down to 2776.50.
Was the headline responsible for not triggering bias-down? The headline’s reaction could have extended 5 ticks higher to this afternoon’s 2784.00 bias-up signal. Stopping short might reflect the ongoing attraction to retesting overnight lows. Whether to 2768.50 or 2761.00-2762.00, fresh post-open lows remain likely so long as 2784.00-2785.00 isn’t recovered through a relevant window.
Look ahead: Economic Calendar – for Thu Jul 12, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Thursday’s busy calendar includes a Fed speaker and the 30-year auction. And any reaction triggered by the high-profile influential pre-open report is likely to be duplicated by post-open reports.
*Consumer Price Index
8:30 AM ET
Jobless Claims
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
EIA Natural Gas Report
10:30 AM ET
*Patrick Harker Speaks
12:15 PM ET
*30-Yr Bond Auction
1:00 PM ET
Treasury Budget
2:00 PM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET
Afternoon Bias
| WED afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2782.00 | 2784.00 |
| …would target | 2788.25 | 2790.25 |
| Bias-down: under | 2774.50 | 2776.50 |
| …would target | 2766.50 | 2768.50 |
| Signal status: NO-BIAS, TESTED BIAS-DOWN SIGNAL | FAQ | |
| Flowcharts: Bias-UP // Bias-DN 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… Crawling out of the tariff tank.
Pre-open and post-open reactions down are recovering.
Resistance at 2784.00-2785.00 was likely to reverse momentum back down if tested early enough. In fact, attacking it to within 2 ticks before the open was quickly reversed 8 points down to 2775.00. And tests of 2784.00-2785.00 after the open reacted down, too.
But not 8 points.
Still overlapping the 2782.00 bias-down target at 10:15 avoided renewing the bias-down signal, which has been rewarded by an attack on 2788.00. But overlapping 2782.00 is not the same as holding it decisively, and it’s still a bias-down environment, so sellers aren’t marginalized. And now 2782.00 is being retested as support.
Exiting the bias environment above 2784.00-2785.00 would start to suggest what the open failed to establish — that the overnight drop has been absorbed. Otherwise, the pattern remains vulnerable to attacking the overnight low down to 2768.50, if not also probing it down to 2761.00-2762.00.