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))
Tuesday’s gap up didn’t extend, but held 1.1295 to avoid signaling the trend reversing up above 1.1745.
Gold Aug Contract (GC, ETF: (GLD))
Fresh lows under 1239.00 overnight stopped short of fulfilling potential to 1237.50 before reversing up sharply. Tuesday’s open was greeted at 1248.50 and extended to 1258.50. A pullback to 1247.50 could suffice to form a bottom, but under 1244.50 would signal a corrective bounce was reversing down.
Silver Sep Contract (SI, ETF: (SLV))
Tuesday’s 16.00 open was greeted by an overnight rally that extended intraday up to 16.08. A pullback to 15.93 would be optimal for forming a bottom that could launch a significant trend reversal.
30-year Treasury Sep Contract (US, ETF: (TLT))
Still testing downtrending resistance under 144-26 Tuesday reacted up to attack the recent range’s 145-16 upper-end. Back under 144-08 would signal momentum reversing down, but the pattern otherwise remains vulnerable to extending higher.
Crude Oil Aug Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Coming to within 3 cents of the longstanding 75.30 target Tuesday coincided with headlines of Saudi increased oil output. The steep reaction down to 72.75 stopped optimistically short of touching Sunday night’s gap down, suggesting an eventual break lower. Meanwhile, Tuesday’s 75.00 open gapped up above all prior highs, and would like to be retested from below. Upside remains likelier first so long as the 72.95 pullback limit continues holding.
Natural Gas Aug Contract (NG, ETF: (UNG, UNL))
Monday’s temporary probe under the 2.82 sleeper low had failed to extend, so Tuesday’s rally touched 2.90 and closed at 2.88 support. Higher prior lows could be tested up to 2.92 before resuming the decline.
Market Wrap (recording & summary)
Lower-end, meet upper-end. Turnabout is fair play. What’s good for the goose… Sometimes, the subject lines just write themselves.
Only a brief window of opportunity would allow Friday morning’s open to extend beyond the range’s upper-end. Otherwise, the session’s likeliest scenario was to range sideways. The strong second likeliest scenario was to trend away from the range’s extreme. The drop would target 2740.00, but with no assurance of fulfilling it before the close.
Most of a Head & Shoulders pattern had formed pre-open off of 2741.50, and the opening 15 minutes of volatility completed it. Price had all but reversed down, supported by the morning’s 2730.50 bias-up signal. The bias environment began lapsing, and the dip resumed.
The became relentless thanks to China retaliation headlines. Interim support was sliced through on the way down to 2712.00. Its reaction bounced to 2719.50 without violating the 2713.50 bounce limit, which the close was overlapping.
The close was also under 2718.00. A normal environment’s ongoing downtrend would have required closing back under it to offset Monday’s close above it. Closing back under it during the early close session, ahead of a closed session, still gets a benefit of the doubt. And still needs confirmation by extending down Thursday without delay, regardless of a possible bounce during the Globex holiday trading.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
Look ahead: Economic Calendar – for Wed Jul 4, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Happy Independence Day! U.S. markets are closed, liquor stores are open. Globex trades through the noon hour, and then re-opens normally in the evening.
Independence Day
U.S. Markets closed
Globex close
1:00 PM ET
Globex open
6:00 PM ET
Post-open Review… Treading water.
Clinging to the bias-up target.
The overnight rally ultimately touched 2741.50. That’s essentially the 2740.75 renewed bias-up target. But the bias-up signal wasn’t renewed, instead holding at or under the 2735.50 bias-up target through 10:15. The 2730.50 bias-up signal did trigger, so it should define the window’s lower-end if tested…
…on a normal day. Which today is not, being an early close.
So, back above 2736.75 could attack or retest the overnight high, possibly even test the range’s ~2745.00 upper-end. Breaking above it continues to be less likely than simply ranging sideways, as this morning seems intent upon.
Exiting the bias environment under 2730.50 could still extend down. Breaking at any time under 2730.50 could still extend — again, not a normal day. But rallying is less likely.
The First Trade & Pre-open Tour Recording… Lower-end, meet upper-end.
Proper context can start the day with a solid win and make all the difference.
DAILY SCHEDULE
First, watch the pre-open Tour recording HERE <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A
Through the prior close…
Sunday night’s steady decline from 2728.00 to 2698.50 was retraced 38.2% before the open — not a healthier 68.2%. That much pessimism wasn’t going to trend down intraday unless maintained through the open. A quick probe under the overnight low could have formed a bottom, but an attack on it down to 2700.50 sufficed. The morning snapped back up to attack 2719.00, but from a position of weakness that was likely to retrace 2704.00. Which it did. Its retracement was likely to extend down. Which it didn’t. The balance of the session rallied back into positive territory up to 2728.50.
Overnight action’s new info…
Somewhat similar to Sunday, last night also essentially began with a blip-up that was reversed down. Last night’s blip-up was a little further in, initially surging 8 points to attack 2733.00, then snapping back down more than 11 points to attack 2721.00. Last night’s blip-up was also recovered, retraced into Europe’s opens, and extended to attack 2740.00 as Chinese banks actively supported the Yuan.
If, then…
Was anticipation that China would be forced to step in sooner rather than later responsible for Monday afternoon’s rescue? Or, the mid-week holiday’s volume constraints? Maybe a little of both, but more the latter than the former. In other words, China’s near-term effects on Global markets tend to be retraced. Meanwhile, trending beyond the existing range is difficult around holidays, while trending back to the range’s opposite end is easier. And now, markets are at the recent range’s upper-end, freshly retraced from its lower-end. Trending up today, and not down, probably requires trending up early. Today’s early close only makes breaking beyond the range more difficult. Extending Monday afternoon’s rally intraday was always least likely, and no more likely just for having extended it overnight… Closing Friday under 2718.00 kept alive selling pressure through the weekend. Closing above it Monday would usually require rejecting it Tuesday, but normal requirements are less influential on a shortened session — let alone ahead of a holiday. Nevertheless, trending back down to 2704.00 is still the likeliest objective for any reversal. REMINDER: Today’s early close is at 1:15 PM ET early close. Market Wrap will be held early.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2735.50 would be likely to exceed the 2735.50 bias-up target at 10:15 to renew the bias-up signal, next targeting 2740.75 and 2745.00. Exiting the open above 2733.00 would be likely to trigger the 2730.50 bias-up signal.