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))
Gapping up slightly Tuesday didn’t prevent dipping back down to test Friday’s lows, which were testing “lower prior highs” at 1.1730-1.1755. So long as the support area holds, there remains potential for probing fresh highs above 1.1945.
Gold Dec Contract (GC, ETF: (GLD))
Rallying overnight ran into 1271.00 resistance that triggered a reversal to fresh lows attacking 1257.00. Its reaction up tested Monday’s 1264.00 close, but more importantly held above 1261.00 to avoid completing a bottom.
Silver Sep Contract (SI, ETF: (SLV))
Gapping up Tuesday was reversed down from 16.45 resistance. But its reaction down to fresh lows was recovered back into positive territory. It’s not a completed bottom, but the behavior does suggest that a pullback is ending with potential for a bounce up to 16.60 or 16.70.
30-year Treasury Sep Contract (US, ETF: (TLT))
Probing a fresh low had room down to 153-16 before signaling a deeper drop underway. It was only attacked Tuesday morning, keeping alive the likelihood for retesting last week’s highs up to 155-16.
Crude Oil Sep Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Still fluctuating in the range, closing above 50.10 would trigger a new upleg, but under 48.25 would help to confirm that a more substantial retracement back to the lows is underway.
Natural Gas Sep Contract (NG, ETF: (UNG, UNL))
Probing higher overnight was retraced into Tuesday’s open. The initial dip was reversed back into positive territory. A second consecutive positive close does suggest that a bottom has formed, with some potential for probing a fresh low, but now very likely to recover and reverse up.
Mid-day Update… Mission Accomplished.
New highs printed, with dubious timing that tries reverse down.
Holding a test of the 2472.75 bias-down signal had put into play an offsetting test of the 2478.75 bias-up signal. The most bullish scenario I described for this morning was to attack yesterday’s ~2478.00 highs and then break higher this afternoon. The rally was too impatient to wait, and surged to new highs at 2488.50.
The move originated during a no-bias environment whose bias-up signal should have defined the window’s upper-end. Alternatively, the “no-bias” trending could be retraced back down to 2478.75, if not also to the 2475.50 10:15 print.
2478.75 was retraced as this afternoon’s bias environment began. It was probed by 1 point before bouncing. Another dip is threatening to reach 2475.50.
Meanwhile, there is no “unfinished business above.” Only 2484.00 needed to be met. Closing above it would suggest a bigger rally underway targeting 2515.00 (2504.00-2522.00). Otherwise, closing under the 2472.50-2474.00 open would form a Pivot Reversal that points down sharply. For awhile.
Look ahead: Economic Calendar – for Wed Aug 9, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday’s mid-morning EIA data may influence price action indirectly. The noon hour ends with a Fed speaker that could set the afternoon’s tone.
MBA Mortgage Applications
7:00 AM ET
Productivity and Costs
8:30 AM ET
Wholesale Trade
10:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
*Charles Evans Speaks
1:00 PM ET
10-Yr Note Auction
1:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2488.75 | 2486.00 |
| …would target | 2494.50 | 2492.00 |
| Bias-down: under | 2482.50 | 2480.00 |
| …would target | 2477.00 | 2474.25 |
| Signal status: NO-BIAS, TESTED BIAS-UP 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… Sellers try to squeeze in another.
Extra dip is recovered.
Holding 2475.75 through the opening 15 minutes of volatility — preferably piercing only 3 ticks lower — was the optimal setup for rallying this morning. But opening at 2475.00 dipped to 2472.50, touching an inflection point there that would have opened the door to sharply lower levels.
The two paths seem very different. Except that the open’s deeper dip did recover back up to 2475.75 as the bias timing window approached.
The 2478.75 bias-up signal didn’t trigger. But its test has been put into play by holding a test of the 2472.75 bias-down signal. This morning’s most bullish scenario may be to work its way back up to yesterday’s high, positioned to rally higher when the bias environment’s constraint lapses.
Already, the reaction up is attacking 2478.00. Backing-and-filling is still possible while waiting for the bias environment to lapse. Rallying this afternoon could be very productive, targeting at least 2484.00. Otherwise, holding a test of the bias-up signal and reversing back under the opening print could trigger a new downleg.