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 Jun Contract (EC, ETF: (FXE, UUP))
The bottoming opportunity followed Gold’s plunge to fail holding its 1.1960 and 1.1890 pullback limits. The gap down was above prior lows so an immediate recovery wouldn’t be problematic, so we’ll continue monitoring for a potential bottom.
Gold Jun Contract (GC, ETF: (GLD))
Already trending down under 1316.00 after Monday’s close, and extending down sharply overnight, Tuesday gapped down under all prior lows and extended much deeper to fulfill the outstanding 1294.00 objective The trend remains down so long as bounces now hold 1298.50 as resistance.
Silver Jul Contract (SI, ETF: (SLV))
Closing Monday in a test of the 16.65 pullback limit had avoided signaling the corrective bounce was done. But it was done nonetheless, extending down much deeper overnight into Tuesday. Not to fresh lows — in fact, stopping optimistically short of filling the two week-old gap back down to the 16.15 low close. The trend remains down so long as bounces now hold 16.55.
30-year Treasury Jun Contract (US, ETF: (TLT))
There was no reason to further delay breaking lower Monday if that were the pattern’s objective. It did, and despite bouncing to 143-19, Tuesday’s open was greeted by gapping down and extending down to fresh lows at 141-01. That is a second consecutive lower close from a multi-session range, confirming its breakout and now requiring an eventual third lower close.
Crude Oil Jul Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
More narrow ranging in both positive and negative territory Tuesday continue delaying the rally’s resumption to its 74.10 objective. But it also entrenches the uptrend and creates a position of strength that the pattern often exploits when trending slows without being rejected.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Probing a fresh recovery high Tuesday pierced the two-week old 2.44 high up to 2.85 whose recovery would start to signal a bigger rally underway. The balance of the session fluctuated narrowly around unchanged, back into negative territory. Meanwhile, the decline remains vulnerable to resuming on a close under 2.78.
Mid-day Update… Hanging out, by a thread.
Open’s drop is getting a little too comfortable.
Already testing 2712.00 before the open — well under this morning’s 2724.00 and 2718.00 bias-down parameters — had expended a lot of energy. But it apparently earned follow-through, and post-open reinforcements pushed lower to 2703.25.
That was the first half-hour. The balance of the session has ranged sideways. The first reaction up exceeded its 2714.00 target by nearly 2 points before reversing back to the open’s low. The next reaction up attacked 2713.00, and blipped-up even higher momentarily as the noon hour was ending. But now the 2703.00 is being attacked again.
The constant support and descending resistance forms a Descending Triangle, except that it doesn’t — I don’t begin my patterns at gaps open. But the pattern isn’t accumulative. And while a recovery today is possible, it won’t be credible from under 2714.00, unless a probe of fresh lows is rejected first.
Look ahead: Economic Calendar – for Wed May 16, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday’s calendar is fairly steady, with so high-profile items, but not reliable for influencing price action. The pre-open report and speaker might set a tone for reactions to the post-open items.
MBA Mortgage Applications
7:00 AM ET
Housing Starts
8:30 AM ET
*Raphael Bostic Speaks
8:30 AM ET
Industrial Production
9:15 AM ET
Atlanta Fed Business Inflation Expectations
10:00 AM ET
EIA Petroleum Status Report
10:30 AM ET.
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2718.25 | 2717.00 |
| …would target | 2726.00 | 2724.75 |
| Bias-down: under | 2705.25 | 2704.25 |
| …would target | 2698.00 | 2697.00 |
| 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… More neutralization below.
Not so much required, as outstanding.
Friday’s reversal from the morning’s fresh highs had probed negative territory very briefly that afternoon.
It just didn’t qualify as correcting the two prior sessions’ substantial combined rally. A deeper correction was likely.
Monday morning’s rally only exacerbated that corrective influence, by expending more buying pressure from a shallow pullback. Expending, and fulfilling. And that afternoon’s probe into negative territory confirmed the market knew its limitations, even leaving unfinished business below to encourage the correction to extend.
Which last night’s dip did, and could have fulfilled. Its pre-open reaction up to unchanged offered an opportunity to reverse up, but its natural resistance only launched a new downleg. The next lower objective other than bias calculations was to test last Thursday afternoon’s 2713.00 low. Obligatory support, at best, and likely to be probed down to 2705.00.
That was just met down to 2703.25. Oversold RSIs have helped to launch a bounce, now testing 2711.00, with potential to probe it up to 2714.00. That’s not required, and not required to hold, and back under 2707.75 would signal the decline is resuming.