Posts by Rod David
Market Wrap (recording & summary)
Don’t confuse narrow ranging with stability. Not that Monday’s range was narrow. But it developed entirely within Friday afternoon’s range, without touching either end of it.
The mood is anxious, with the market afraid to step on its own shadow(s). That often produces a false break in one direction, before reversing more substantially in the opposite direction.
Breaking lower first would help to form a bottom that launches a probe of new highs. Assuming the low’s retest were to hold, which at this point would still be likely — preferably after neutralizing Monday’s “unfinished business below” at 2415.50.
Gapping up Tuesday above Monday’s open and Friday’s close in the 2428.00 area would be credible for extending higher. Otherwise, bouncing first would not be assured of retesting the highs before reversing back down.
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 Jun Contract (EC, ETF: (FXE, UUP))
Monday’s initial bounce filled the gap back up to Thursday’s close before resolving down. Thursday’s confirmed breakout under 1.1235 still requires an eventual third lower close.
Gold Aug Contract (GC, ETF: (GLD))
Flat-to-lower ranging continued flirting with the 1268.50-1269.50 sell signal that had held as support Friday. Almost any early buying pressure Tuesday would be credible for extending higher intraday, and into the week.
Silver Jul Contract (SI, ETF: (SLV))
Gapping down Monday to 17.09 support then extended lower to test 16.90. Just closing under 17.09 suggest the pullback has developed into a trend reversal. Recovering Tuesday to close back above 17.09 would put back into play a test of 17.90 .
30-year Treasury Sep Contract (US, ETF: (TLT))
Monday’s gap down held the 153-29 pullback limit and eventually surged to attack the 154-24 bounce limit that was tested Thursday night. Its reaction down again held 153-29, but its break would target 152-23. Otherwise, another bounce Tuesday would target 155-04.
Crude Oil Jul Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Breaking higher early Monday morning probed the 46.15 buy signal, which was premature considering Thursday’s 45.29 gap down under all prior lows still requires a retest. In fact, Monday’s gap up faded back to the signal and threatened turning negative.
Natural Gas Jul Contract (NG, ETF: (UNG, UNL))
Gapping down Sunday night had recovered already into positive territory by Monday’s open. But gapping up held the 3.09 buy signal as resistance before reversing down into negative territory. A probe under last week’s 2.97 low is likely if Tuesday morning isn’t rallying sharply.
Mid-day Update… Getting unstuck.
Still fluctuating in negative territory.
This morning’s bias-down bounce extended to 2426.00 before peaking, almost 4 points above the bias-down signal. Reversing down into and through the noon hour retested 2418.00 support, still off the morning’s 2416.75 low and its 2415.50 bias-down target.
the noon hour’s exit bounced 4 points into the afternoon bias environment’s entry. That’s 2422.25 again. But this afternoon’s bias-down signal is 2420.00. And it didn’t trigger. So, the market is stuck between several rocks above and several hard places below.
The most bearish scenario would remain proximate to the 2420.00 bias-down signal, then break lower when the bias environment begins lapsing. At least a retest of Friday’s 2412.50 low would be in-play, potentially down to 2496.00.
The most bullish scenario would ignore this afternoon’s 2420.00 bias-down signal, which should define the bias environment’s lower-end. Probing under it anyway would be “no-bias trending” that requires being recovered. Probing under it deeply enough to fulfill “unfinished business below” at this morning’s 2415.50 bias-down target would neutralize its attraction. The recovery requirement would do the rest.
An alternative bullish scenario would exit the bias environment rallying back above 2425.00 and higher. At least exit the bias environment above 2423.75, preferably above 2427.25. The recovery template loses that scenario if 2418.00 is retested as support.
Look ahead: Economic Calendar – for Tue Jun 13, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Tuesday’s pre-open PPI is high-profile and has a reliable track record for influencing price action. The afternoon’s 30-year auction tends to inhibit volatility until its results, which should duplicate whatever the PPI reaction. The afternoon Fed speaker can keep things active, too.
NFIB Small Business Optimism Index
6:00 AM ET
*PPI-FD
8:30 AM ET
Redbook
8:55 AM ET
4-Week Bill Auction
11:30 AM ET
30-Yr Bond Auction
1:00 PM ET
*Willian Dudley Speaks
1:45 PM ET
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2429.75 | 2427.25 |
| …would target | 2435.50 | 2433.00 |
| Bias-down: under | 2422.50 | 2420.00 |
| …would target | 2417.00 | 2414.50 |
| Signal status: NO-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.