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))
Room for noise above the retested 1.1735-1.1755 objective at 1.1808 was met overnight by follow-through from Wednesday’s FOMC news. Closing negative Thursday would be the proverbial “canary in a coal mine” warning that USD was about to improve against the basket that has been rallying to its detriment. Thursday’s negative close does suggest a top is forming.
Gold Aug Contract (GC, ETF: (GLD))
Surging after Wednesday’s close in reaction to the FOMC news had fulfilled the 1259.70 target. It was probed overnight and Thursday morning to 1265.00. A pullback to 1254.00 held its 1257.00 pullback limit to avoid reversing down.
Silver Sep Contract (SI, ETF: (SLV))
Wednesday’s post-close FOMC news had triggered a surge to fresh highs that extended to fulfill the outstanding 16.70 target up to 16.81. Its reaction down to 16.54 tested the 16.60 pullback limit through the close.
30-year Treasury Sep Contract (US, ETF: (TLT))
Bouncing overnight only touched the 153-16 buy signal. It was reversed in time to gap down Thursday which extended through the morning to probe Wednesday’s 152-08 low and range around it. Closing back above 152-26 would suggest a recovery is underway.
Crude Oil Sep Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Still no reversal at Thursday’s open, which now has room under 48.25 to 47.25 before signaling the trend has reversed down to retest the low’s consolidation. The rally until then is still considered only temporary, although it has held up and extended against a lot of “permanent low” talk.
Natural Gas Aug Contract (NG, ETF: (UNG, UNL))
Having neutralized the gap back down to Monday’s close on Wednesday, Thursday’s EIA report avoided being greeted from a position of weakness. The reaction spiked up through the 2.95 buy signal, but the session only hovered above ita.
Mid-day Update… and Programming Note.
I’LL BE AWAY FOR THE SESSION’S FINAL HOUR. MARKET WRAP WILL BE EARLY AT 2:34 ET.
My signals doubted this morning’s gap up, but I didn’t. Guess who won that duel.
Gapping up above prior highs, maintaining the gap up, and preferably extending it. These are the ingredients to rallying on the morning after buyers fail to gain traction. There are exceptions, but they’re doomed to failure. 
Despite knowing this morning’s gap up wasn’t extending above prior highs — let alone maintaining — I anticipated a shallow or brief pullback to push higher.
The pullback was neither shallow nor brief. The gap up had failed to trigger my signal, and its reaction had failed to exploit my leeway. But the 2478.00 bias-up signal triggered late, suggesting that the original scenario may be developing, anyway.
Firming through the morning to within 1 tick of the 2480.00 opening print suddenly found itself triggering a sell signal under 2477.00. And probing under the bias-down signal another 6 ticks lower. Then piercing the 2469.00 bias-down target in time to renew the bias-down signal.
And then continuing the plunge to probe under 2458.50 by 6 ticks. All of the probes were also overlapping 2458.50 which warned us the drop may be pausing.
In fact, a buy signal has triggered above 2460.75 has come within 6 ticks of its 2466.50 target. Oversold RSIs at the low require an eventual retest, and may prevent the target or any further recovery. Retesting the low may also resume the decline. There’s no guarantee that a meltdown won’t begin immediately. What I can say is that it’s unlikely to begin the same session that printed a new trend extreme.
Look ahead: Economic Calendar – for Fri Jul 28, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s pre-open GDP is high-profile, but not reliable for influencing price action. Still, any noticeable reaction to it would likely repeat on the post-open Consumer Sentiment number, which is itself reliable for influencing price action.
GDP
8:30 AM ET
Employment Cost Index
8:30 AM ET
*Consumer Sentiment
10:00 AM ET
Baker-Hughes Rig Count
1:00 PM ET
*Neel Kashkari Speaks
1:20 PM ET
Afternoon Bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2483.25 | 2480.25 |
| …would target | 2488.00 | 2485.25 |
| Bias-down: under | 2478.25 | 2475.50 |
| …would target | 2472.00 | 2469.00 |
| 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.
Post-open Review… A little late, but arrived.
Post-open dip takes longer than expected to recover.
I described two bullish scenarios during the Market Tour. Of course, one bullish scenario would have maintained a gap up above prior highs, if not also extended it through the open. The second bullish premise would have reacted to gapping up dipping, and then resuming the rally for only the morning.
The open’s gap up to 2480.00 reacted down immediately. But it wasn’t just a dip. Touching 2476.25 reacted up 2 points, only to be resisted by this morning’s 2478.00 bias-up signal. Its test reacted down again to 2475.75.
No-bias. With an offsetting test of the bias-down signal in-play.. Except…
The 2478.00 bias-up signal was touched in time to invoke the grace period. Which triggered the bias-up, late. The bullish scenario developed, albeit late and lower. The 2484.00 bias-up target is in-play, but it’s not required like an optimal setup would have done. Back under 2476.50 would signal the recovery had failed anyway.