Posts by Rod David
Market Wrap (recording & summary)
Retesting 2426.50 was likely to at least visit 2424.25, which previously had been the room for noise above 2415.00. It was fulfilled by a 5-point plunge during the noon hour from 2429.00. And its test reacted up quickly and aggressively. It also reacted up substantially, almost 10 points to touch the open’s 2433.75 high.
Before this week’s pullback had even begun, during the weekend’s Saturday Review, we discussed the potential down to 2421.50. Its test would have made a more reliable bottom. And still could, but it’s not necessary to resume the rally. No more necessary than was last week’s bottom pullback that stopped short of its 2399.00 potential.
Meanwhile, closing above Wednesday morning’s gap up after probing a fresh trend low intraday would have formed a Pivot Reversal. The setup identifies turning points. All of the setup’s other elements had formed, including actually probing a fresh session high up to 2435.00. But the close was back under he morning’s 2434.50 high. The pattern’s resolution can be as bearish as it could have been bullish.
Wednesday’s late reaction down seemed to suggest as much, retracing a couple of “big, consecutive upbars.” The setup would have triggered a short-squeeze if appearing several minutes earlier. It didn’t, so retracing it isn’t necessarily bearish. Rallying overnight to gap up Thursday can’t be discounted. Otherwise, gapping down Thursday under Wednesday afternoon’s ~2428.00 low could get 2421.50 done, after all.
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))
Gapping down Wednesday to test the 1.1235 sell signal was recovered to fill the gap back up to Tuesday’s close, and to retest 1.1285 resistance. Two more swings in the range left it intact, and likely to break soon.
Gold Aug Contract (GC, ETF: (GLD))
Wednesday’s gap down to Tuesday’s 1293.50 low was recovered to 1296.50 resistance, which then reacted back down to the open’s low. An actual correction down to 1284.50 remains possible, and likely if Thursday’s open has further delayed resuming the rally to probe prior highs above 1300.00.
Silver Jul Contract (SI, ETF: (SLV))
Overnight lows filled the gap back down to Friday’s 17.55 close before recovering back into the interim range, all but requiring no further delay in resuming the rally to the 17.90 target.
30-year Treasury Sep Contract (US, ETF: (TLT))
Flat-to-lower ranging overnight eventually dipped back toward Monday’s close without launching a downleg. But further delaying the rally through Thursday would become even likelier to reverse the trend down next.
Crude Oil Jul Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Monday’s shallow dip and shallow recovery from probing under Friday’s low had been exploited by Tuesday’s rally. But that had held “higher prior lows” at the original sell signal. A negative knee-jerk reaction to Wednesday’s EIA report was possible within the bottoming context. But the reaction extended a weak open to more than a $2 drop attacking 45.90, which is $1 under Monday’s low. No bottom has formed.
Natural Gas Jul Contract (NG, ETF: (UNG, UNL))
Gapping up Wednesday to 3.09 resistance reacted back down to Tuesday’s close, still leaving open the gap back down to Monday’s close, which greets Thursday’s EIA report from a position of weakness.
Mid-day Update… Timing a turn.
Minimum downside objective met.
Trending down since this morning’s bias environment began has been very productive.
Not only in avoiding a rally, as not gapping up suggested would be avoided. And not only in trending down. But now in testing the 2424.25 minimum likely objective below.
If that’s not today’s of, then the next lower objective would be 2421.50.
Lower lows can be avoided. The 2426.50 bias-down signal was not triggered. Its grace period was invoked, but a surge to 2429.50 avoided it. The no-bias environment could test 2433.00 before even threatening
“no-bias trending,” or rally through it after the bias environment begins lapsing.
Otherwise, fresh lows could still extend down deeper. Although the b2426.50 minimum could serve as the low, the likely objective would be 2421.50. Exiting the bias environment above a prior high could otherwise be unstopable.
Look ahead: Economic Calendar – for Thu Jun 8, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Thursday’s policy statement by the ECB is just a warm-up act for Mario Draghi’s Q&A that somehow never fails to trigger multiple steep swings and/or trending. The day’s snap elections in Britain can be influential, but possibly not intraday. Claims data might influence price action if it were to contradict last Friday’s payrolls surprises. The rest of the day’s schedule is low-profile.
ECB Policy statement
7:45 AM ET
Jobless Claims
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
Quarterly Services Survey
10:00 AM ET
EIA Natural Gas Report
10:30 AM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET
Afternoon Bias
| WED afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2433.75 | 2433.00 |
| …would target | 2438.75 | 2438.25 |
| Bias-down: under | 2427.00 | 2426.50 |
| …would target | 2422.25 | 2421.50 |
| Signal status: LATE 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.