Posts by Rod David
Market Wrap (recording & summary)
Wednesday’s bias environment exit was positioned well for rallying to new highs into the close. The noon hour’s exit printed a fresh post-open high above the bias environment’s high. All of which was pessimistically short of the morning’s 2397.00 bias objective, despite it already having been met to within 3 ticks.
Reacting down under 2393.50 would have rejected the opportunity to trend up to new highs through the close. But the bias environment exit dipped to touch 2393.50. And despite recovering completely, the last half-hour also dipped to touch 2393.50. But neither dip probed any lower, and each was recovered back to session highs — touching 2397.00 at the close.
The morning’s rally was this week’s first, but it was relatively shallow. Hovering there through the afternoon didn’t exploit opportunities to reverse down. This combination of restrained optimism and ineffectual pessimism can still launch an upleg to new highs. Trending higher overnight remains more likely than probing fresh lows for the week, other than an overnight dip that is isolated before the open.
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))
Ranging narrowly Wednesday around Tuesday’s lows hovered at the lower-end of the recent two-week range, and still above the pullback’s potential to 1.0865. Closing back above 1.0920 would target filling the gap back to last Friday’s 1.1010 close if not also retesting the rally’s 1.0525 target.
Gold Jun Contract (GC, ETF: (GLD))
Bouncing overnight touched the ~1226.00 lower-end of the recent consolidation, and reacted down Wednesday toward Tuesday’s lows. The 1206.00-1211.00 target area remains in-play.
Silver Jul Contract (SI, ETF: (SLV))
Rallying overnight back into the recent range prevented confirming Tuesday’s breakout from its recent range. The range’s resistance did hold, so the decline’s 15.95 target area remains in-play.
30-year Treasury Jun Contract (US, ETF: (TLT))
Gapping up slightly Wednesday had just begun testing “higher prior lows” at 151-10 before its reaction filled the gap back down to Tuesday’s 150-24 close. Closing above Wednesday’s high would launch a rally having potential to 152-18.
Crude Oil Jun Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Wednesday’s gap up spiked higher in reaction to reporting the biggest inventory draw since last year. the 47.65 target was met, and could be extended to 48.45 so long as 47.20 holds as support.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Tuesday’s rally extended by gapping up into Wednesday’s open to test 3.27 resistance, then spiked up to fresh highs at 3.35. Unfinished business below, or not, The next higher target is 3.42-3.45 so long as 3.27 isn’t broken through Thursday’s close. And this does suggest that Thursday’s EIA report is being greeted from a position of strength.
Mid-day Update… Better spirits.
Does this morning’s rally reflect a new sentiment?
Monday and Tuesday morning each trended down. Yesterday morning’s decline was despite having rallied overnight. This morning rallied, despite having remained under pressure overnight, and greeting the open in negative territory.
This afternoon’s 2398.00 bias-up signal wasn’t even attacked, but its nearby. Consolidating flat-to-higher for the next hour might convince market participants that these new highs aren’t being rejected. Exiting the bias environment probing fresh session highs would be credible for extending to new highs through the close.
Otherwise, a pullback has room down to this morning’s “lower prior highs” around 2392.50. Even this afternoon’s 2391.25 bias-down signal could be tested without reversing momentum down. But breaking under 2391.00 when the bias environment starts lapsing could trend down into the close.
Look ahead: Economic Calendar – for Thu May 11, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Thursday’s BOE policy statement has become much more relevant to the Pound than to other markets. The pre-open Fed speaker is too early to be reliable for influencing intraday price action. Jobless Claims had become irrelevant, but last week’s price reaction may suggest that’s changing again. Price action may be paralyzed ahead of the 30-year auction until its done.
William Dudley Speaks
6:25 AM ET
Bank of England policy statement
7:30 AM ET
*Jobless Claims
8:30 AM ET
*PPI-FD
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
EIA Natural Gas Report
10:30 AM ET
*30-Yr Bond Auction
1:00 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 | 2401.50 | 2398.00 |
| …would target | 2407.00 | 2403.50 |
| Bias-down: under | 2394.75 | 2391.25 |
| …would target | 2389.50 | 2386.00 |
| Signal status: NO-BIAS | 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.