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))
Despite Monday having filled the gap up left outstanding from the prior Friday, Tuesday’s gap down created another gap back up to Monday’s close. Tuesday’s gap down held the 1.1765 sell signal, enabling Wednesday to fill the gap above. And it was done by gapping up, creating a gap back down to Tuesday’s close, which is essentially the 1.1765 sell signal.
Gold Dec Contract (GC, ETF: (GLD))
Only firming overnight wasn’t enough to reject Tuesday’s test of the 1288.00 sell signal, which wasn’t recovered above a relevant level and remains vulnerable to triggering.
Silver Sep Contract (SI, ETF: (SLV))
Only firming overnight wasn’t enough to reject Tuesday’s test of the 16.90 sell signal, which wasn’t recovered above a relevant level like 17.05 and remains vulnerable to triggering.
30-year Treasury Sep Contract (US, ETF: (TLT))
A third consecutive session Wednesday developed within Friday afternoon’s range, without trending down or rejecting any probe of fresh highs. But Wednesday developed at Friday’s highs, just avoiding a fresh high to still qualify as more “ineffectual pessimism,” which is vulnerable to resolving up.
Crude Oil Oct Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Still fluctuating around 47.95 and back up to the 48.45 sell signal — instead of trying to resume Monday’s break — is undermining the potential for another downleg that finally tests the low’s consolidation.
Natural Gas Sep Contract (NG, ETF: (UNG, UNL))
Closing back under 2.95 Tuesday wasn’t sufficient to reverse momentum down, like closing under 2.91. Gapping down to it Wednesday still held it into the afternoon.
Mid-day Update… By default.
Gap down held, but recovery holding back.
The late push to fresh overnight lows at the 2440.75 bias-down target had to prove itself, or else fail. It failed. Back above 2442.25 quickly signaled the drop lacked sponsorship. But trending higher through the morning never proved there was sponsorship for a recovery.
Chipping away at the 2446.00 bias-down signal’s resistance wasn’t actually probed until the bias environment had begun lapsing. But then only to attack 2448.00 into the noon hour. And RSIs returning to their upper-end was repeatedly stopping short of becoming overbought. Strong hands weren’t buyers.
Dipping during the noon hour tested this afternoon’s 2443.00 bias-down signal — both at 1:20 and at 1:30. Bias-down avoided triggering, but it also avoided holding. This is a noN-bias environment, which often clings to the bias signal before breaking it anyway. Regardless of its timing, a break to fresh lows testing 2438.00 is possible, unless the bias environment were exited in rally mode attacking 2446.00.
Look ahead: Economic Calendar – for Thu Aug 24, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Thursday is this week’s busiest on the econ calendar. But it barely has one report with any reliability for influencing price action, the post-open PMI Flash. Meanwhile, still another housing sector report is released.
Jobless Claims
8:30 AM ET
*PMI Composite Flash
9:45 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
Existing Home Sales
10:00 AM ET
EIA Natural Gas Report
10:30 AM ET
Kansas City Fed Manufacturing Index
11:00 AM ET
5-Yr TIPS Auction
1:00 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)2454.25 | SPX | ES |
| Bias-up: above | 2450.00 | 2448.75 |
| …would target | 2455.50 | 2454.25 |
| Bias-down: under | 2446.25 | 2443.00 |
| …would target | 2439.25 | 2438.00 |
| Signal status: noN-BIAS, TESTED BIAS-DOWN SIGNAL | 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.
Post-open Review… Hard sell.
Maximum selling greeted the open.
The overnight tests of this morning’s 2446.00 bias-down signal had given way to also test the 2440.75 bias-down target. The opening bar blipped down to 2438.75. And held.
Sellers were already suspicious. The late extension wasn’t any more reliable. Its likely resolution was to test 2446.00 as resistance. Which it did.
Reacting back down to 2441.00 helped to maintain the bias-down signal at 10:15. Another bounce also reacted down before 10:30 to avoid invalidating the 10:15 signal. This is a bias-down environment. Its target has been met, but its signal should define the window’s upper-end.
None of which is preventing yet another test of 2446.00 as resistance. This strength is almost a half-hour premature for reliably breaking higher. A recovery would be more credible upon coming within 10-15 minutes of the bias environment lapsing.
Of course, premature buying runs the risk of being weak-handed sponsorship. Not exiting the bias environment in rally mode would open the door wider to fresh lows at 2438.00. Otherwise, restrained optimism that hovers at or around 2446.00 could still fill the gap back up to yesterday’s 2451.25 close today.