Posts by Rod David
Market Wrap (recording & summary)
Tuesday open was greeted by another dip back down to Thursday’s 2408.50 opening gap. It produced another bounce. And it filled the gap back up to Friday’s 2413.75 prior close. Retracing back to within 1 tick of the pre-open low was still short of the bias-down signal. And short of time to trigger it.
That didn’t necessarily marginalize sellers. Other sponsorship could have arrived at different points during the day to launch another downleg. But those initial sellers were marginalized. And so long as they lacked a catalyst to attract more sponsorship, price could only gravitate back toward the range’s other end — up.
So, it’s interesting that the range’s other end wasn’t tested. Positive territory was barely pierced, only touching the afternoon’s bias-up signal, which held throughout the afternoon. The overnight decline was stopped, but not rejected. Reinforcements didn’t arrive, but neither did counter-trend sponsorship, which must now creep in overnight to be credible. It’s also interesting that 2408.50 support has now been chipped away both overnight and intraday. Its retest would likely break, and a break would likely target 2399.00.
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))
The initial downside objective at 1.1111 was attacked closely enough Monday night to at least push price back up within Friday’s range. And apparently only that hard, as that’s where the balance of the session ranged. Resuming the decline would next target 1.1000.
Gold Aug Contract (GC, ETF: (GLD))
[Rolling coverage forward to Aug, which is trading at a $3.30 premium to Jun] Gapping down Tuesday worked to trap Friday’s gap up that had failed to extend higher. Closing under 1259.00 would begin to signal momentum reversing down, confirmed under 1255.00. Meanwhile, even a to has room to probe a fresh high above 1272.00.
Silver Jul Contract (SI, ETF: (SLV))
Gapping down slightly Tuesday was quickly held and consolidated before a late-morning surge to fresh highs at 17.46. If left intact, the rally’s next higher objective is 17.95. Otherwise, closing under 17.20 would reverse the trend down.
30-year Treasury Jun Contract (US, ETF: (TLT))
Actually probing a fresh relative high Tuesday had no reason not to extend higher, and has no reason not to continue extending higher Wednesday. Last week’s dips at least had trapped shorts, but now actually rallying must prove that sellers are done.
Crude Oil Jul Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Tuesday’s dip barely touched 49.05 support before firming through the balance of the session. But it did not recover 49.85, which would start to trigger a new upleg instead of resuming the decline.
Natural Gas Jul Contract (NG, ETF: (UNG, UNL))
Gapping down sharply Tuesday finally fulfilled the longstanding objective for a new low close under 3.20 that a confirmed breakout had triggered weeks earlier. Compensation for the delay suggests at least 1-2 sessions of lower lows, although not necessarily consecutive.
Look ahead: Economic Calendar – for Wed May 31, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: The holiday-shortened week continues to make the econ calendar a little more dense, but not much more influential. Any noticeable reaction to the pre-open Fed speaker is likely to be duplicated by the post-open PMI. Don’t forget that PMI is released privately to its institutional subscribers several minutes before the public gets it. And reaction to both is usually similar. The afternoon’s Beige Book is influential, too — and often inhibits price action just before its release.
MBA Mortgage Applications
7:00 AM ET
Robert Kaplan Speaks
8:00 AM ET
Redbook
8:55 AM ET
*Chicago PMI
9:45 AM ET
Pending Home Sales Index
10:00 AM ET
*Beige Book
2:00 PM ET
Farm Prices
3:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2415.75 | 2414.50 |
| …would target | 2421.75 | 2420.50 |
| Bias-down: under | 2409.50 | 2408.25 |
| …would target | 2403.00 | 2401.75 |
| 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… Uncertain support.
Chipping away at the lower-end.
The pre-open dip to 2407.75 had repeated Friday’s pre-open test of Thursday’s gap up. That had bounced before Friday’s open, and today’s pre-open dip bounced, too. A post-open dip to 2408.50 repeated the pattern, but it was the first time the dip and bounce had developed intraday.
The post-open bounce’s likely objective at 2413.00 was tested. The gap back up to Friday’s 2413.75 close (also Thursday’s close) was essentially filled. And held. The bounce left behind tenuous support around 2408.50. And it’s being tested again.
No higher objective or attraction is in-play. And there’s plenty of room below before this morning’s 2505.75 bias-down signal might inhibit sellers. But this is a no-bias environment, so no bias attraction is in-play. Back above 2412.00 would suggest a retest of the range’s upper-end. Otherwise, there’s still potential for a deeper break targeting 2399.00.