Posts by Rod David
Market Wrap (recording & summary)
Thursday’s drop either ended the decline, or took us to the brink of it getting serious.
This week’s overnight and intraday tests of the 2471.00-2473.50 maximum corrective bounce limits essentially reset last week’s drop from its Pivot Reversal session. It was not just one, but two opportunities for the rally’s sponsorship to reassert itself. Neither was exploited, so the correction’s origin below became the next leg’s target.
Reacting down Wednesday was almost required. Extending down Thursday was more than required. Now almost any delay to extending down would be considered sellers refueling. No delay is required, not without gapping up above Thursday afternoon’s 2445.75 high. Any shallower open — gapping or otherwise — would likely resolve down to 2421.11-2425.25 and possibly lower.
There’s even potential for gapping down under 2411.00 and extending lower from there. It was the least likely of the three likeliest scenarios we discussed during the Saturday Review. It’s still the least likely, but likelier than it was at this price last week. That was after Friday Factors, but now they can help.
Also helpful to the decline is the bearish WedEX that had triggered after Wednesday’s close. Whether it plays itself out already Friday morning, or dooms a bounce to failure Friday afternoon, it reqiures fresh lows at some point.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
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 surge back above the 1.1765 sell signal to 1.1800 was in reaction to the FOMC Minutes, and not due to accumulation. The overnight reaction down retraced it all and then some, probing under Wednesday’s lows. The morning’s reaction up held resistance at the 1.1765 sell signal.
Gold Dec Contract (GC, ETF: (GLD))
Surging through 1295.00 after Wednesday’s close in reaction to the FOMC Minutes wasn’t entirely retained into Thursday’s open. The restrained optimism helps to keep alive this leg’s potential to 1305.00. Also necessary is that pullbacks hold 1285.00, which was being attacked as support after Thursday’s gap up.
Silver Sep Contract (SI, ETF: (SLV))
Wednesday’s post-close extension of its intraday rally had extended through the 17.05 pullback limit whose break had enabled the interim dip to test 16.60. Thursday’s gap up dipped to test 17.05 as support. Closing higher Friday would signal the rally leg had resumed.
30-year Treasury Sep Contract (US, ETF: (TLT))
An overnight dip back down to Wednesday’s 154-20 buy signal was recovered Thursday morning back up through 155-10. That is the minimum requirement to resume the rally instead of forming a top. The afternoon extended to test last week’s highs above 155-22, with no bullish excuse to further delay extending sharply higher.
Crude Oil Sep Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Further weakness overnight continued to confirm the 48.25 sell signal, and it 43.50 objective are in-play. The ongoing downtrending of lower lows and lower highs also makes a recovery difficult.
Natural Gas Sep Contract (NG, ETF: (UNG, UNL))
Extending down overnight didn’t greet Thursday’s EIA from any better position of strength. The knee-jerk reaction up tested the 2.91 sell signal, and holding it would keep alive its 2.81-2.82 pullback target. Closing above 2.95 would nevertheless signal further pullback wasn’t necessary before rallying.
Mid-day Update… It’s getting worse.
Now retesting Friday’s range.
The open’s drop to 2449.75 had been recovered to test the 2457.50 maximum corrective bounce limit. It was still being tested as this morning’s 11:30 bias environment exit came within view 10-15 minutes prior. And then it was being tested no longer.
That preliminary window trended down into 11:30, and then trended down more. Strong-handed reinforcements were arriving, helping us to anticipate trending down further still. The noon hour’s entry had probed fresh lows, and the noon hour slid through more of them down to 2440.75.
Now the afternoon’s 2
449.50 bias-down signal has been renewed by not recovering its 2444.25 bias-down target through 1:20. The renewed bias-down targets are 2440.75 and 2437.50. I identified the first before it was met, and price action since then has ranged flat-to-higher.
A corrective bounce could test 2448.00. Exiting the bias environment above the 2449.50 bias-down signal could launch a short-squeeze into the proxy or position-squaring windows. But the gap back to Friday’s 2440.00 close will need to be filled, which would make 2437.50 likely to be tested, too. And there’s still Thursday night’s Globex lows.
Look ahead: Economic Calendar – for Fri Aug 18, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s calendar is sparse, but high-profile and influential. The post-open Consumer Sentiment data may be extra influential depending upon how it confirms or contradicts current thinking for the next Fed decision.
*Consumer Sentiment
10:00 AM ET
*Robert Kaplan Speaks
10:15 AM ET
Baker-Hughes Rig Count
1:00 PM ET
Afternoon Bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2458.50 | 2457.50 |
| …would target | 2464.00 | 2463.00 |
| Bias-down: under | 2450.50 | 2449.50 |
| …would target | 2445.25 | 2444.25 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET EXCEEDED | 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.