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 Jun Contract (EC, ETF: (FXE, UUP))
Tuesday’s surge to new highs was unlikely to reverse anytime soon, as confirmed by extending higher overnight and Wednesday. A top is still unlikely to be evident soon, but potential of backing-and-filling can’t be dismissed.
Gold Jun Contract (GC, ETF: (GLD))
Political instability triggered an overnight surge that filled an outstanding gap above before Wednesday’s open. Extending higher post-open tested “higher prior lows” at 1253.00, with the next higher potential being 1261.50.
Silver Jul Contract (SI, ETF: (SLV))
Breaking higher overnight still had difficulty at 16.75 Wednesday, but maintained potential for testing 17.09, so long as 16.75 isn’t broken as support.
30-year Treasury Jun Contract (US, ETF: (TLT))
Political instability and sliding stocks triggered a second consecutive session to rally Wednesday, of blowout proportions, confirming the bottoming pattern that was first signaled on Friday. Breaking above both 151-22 and 152-00 reversed momentum up and extended substantially to 153-26. Pullbacks must hold 152-27 to avoid reversing down.
Crude Oil Jun Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
The reaction to Wednesday’s EIA report bounced back up to the 48.90-49.30 range’s upper-end, largely ignoring the turmoil in other markets.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Wednesday extended the prior two days of selling by extending under the original 3.21 sell signal, down to 3.16 where the original sell signal’s breaks had run into support. Considering the degree of the interim bounce, there’s no bullish reason to have retraced.
Mid-day Update… Squeezing out the last drop.
Still probing fresh lows.
This afternoon’s 2369.75 bias-down signal didn’t trigger. That hasn’t prevented probing under it anyway, which had become somewhat likely since its ongoing test wasn’t being rejected. This morning’s 2366.25 low has now been probed by 3 ticks.
That’s “no-bias trending,” which is doomed to failure. Breaking the bias-down signal too late must be retraced. Eventually. Often the same day or timing window. Sometimes much later, and from much lower.
Exiting the bias environment at 2:30 back above the bias-down signal would be a good start at a short-squeeze. Exiting above the 2374.75 prior high would be better. Regardless, the prior high’s recovery can’t wait for the final hour, or else the decline would be vulnerable to extending.
P.S. This cycle’s WedEX will trigger this afternoon. It’s signal isn’t obvious, which we’ll discuss later.
Look ahead: Economic Calendar – for Thu May 18, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Thursday morning’s Philly Fed is the only regional survey with a reliable track record for influencing price action. Jobless Claims was influential two weeks ago, but not last week. Any obvious reaction at 8:30 is likely to be duplicated in reaction to the 10:00 LEI.
Jobless Claims
8:30 AM ET
*Philadelphia Fed Business Outlook Survey
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
*Leading Indicators
10:00 AM ET
EIA Natural Gas Report
10:30 AM ET
10-Yr TIPS Auction
1:00 PM ET
*Loretta Mester Speaks
1:15 PM 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 | 2380.00 | 2378.50 |
| …would target | 2385.75 | 2384.25 |
| Bias-down: under | 2371.25 | 2369.75 |
| …would target | 2364.75 | 2363.25 |
| 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.
Post-open Review… A post-open push.
Overnight lows probed into and out of the open.
Overnight bouncing from its 2379.25 low had touched the 2388.75 bias-down target as resistance. That immediately launched a reaction down to fresh lows at 2376.00 just before the open.
Bouncing 8 points through the open attacked 2384.00. Almost any higher would have started reversing momentum up. Holding it would be likely to produce fresh lows. Which is how the first half-hour resolved, attacking 2372.00.
The next lower objective under 2375.00 has been the 2370.00 area, which was tested in the past several minutes. RSIs diverged positively, and the prior low was being overlapped by the same 
an hysterical extreme. Things could get worse, but a near-term pause for the market to catch its breath could allow the rubber band to snap back up from here.
An inflection up above 2374.50 would be credible for extending higher. Reversing up relentlessly is always unlikely, even less so here. But 2369.75 may need to be broken before suggesting this morning’s action will bleed into the afternoon.