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))
Friday’s gap up remained withing Thursday’s range, and within the orbit of this week’s high, which is likely to be retested before a substantial reversal down can trigger under 1.0860.
Gold Jun Contract (GC, ETF: (GLD))
Friday’s shallow firming still qualifies as the third consecutive session of ranging narrowly sideways, which is not in itself relevant, except for developing at recent lows. At least a blip-down or some other probe of fresh lows is likely to precede a credible rally effort.
Silver Jul Contract (SI, ETF: (SLV))
Friday was the fourth consecutive trending session to probe fresh lows intraday, approaching a relevant support at 17.09. More significant is the ten consecutive sessions of trending down, forming a potential Up/Down-crash setup.
30-year Treasury Jun Contract (US, ETF: (TLT))
The prior two choppy sessions were not accumulative, as proved by Friday’s dip piercing Tuesday’s prior low down to 151-28. That still short of the pullback’s 151-22 objective. Its reaction up filled the gap back up to Thursday’s close, already neutralizing its attraction above. A lower low remains likely so long as 153-10 isn’t recovered first.
Crude Oil Jun Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Thursday’s retest of the original rally’s 48.90 buy signal held at its 49.30 confirmation Friday, still needing to to close above Thursday’s high and 50.00 to signal momentum reversing up.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Gapping back up Friday to test Wednesday’s highs was unable to resume Tuesday’s surge, despite already having blipped-down in reaction to Thursday’s EIA report.
Mid-day Update… Another over-sized shoe yet to drop?
Market feeling heavy as it won’t leave its lows.
This morning’s bias environment trended straight down throughout. The window reversed from attacking recent 2388.75 highs, to probe under the 2383.50 overnight low down to this morning’s 2379.00 bias-down signal.
Did that relentless 9-point drop reflect optimism?
Perhaps. Mostly because this morning’s low stopped 2 ticks short of touching yesterday’s 2378.75 low. Yesterday’s pivotal low was touched. And if that was optimism, then there remains potential for an aggressive drop under yesterday’s lows — the capitulative leg described in the Market Tour.
This afternoon’s bias-down avoided signaling. It wasn’t even touched, despite still hovering at session lows. That’s a degree of optimism. Breaking the bias environment’s range prematurely isn’t unusual on Friday afternoons.
A bullish scenario would firm through the afternoon bias environment, whether or not to extend higher on its exit. Otherwise, approaching the bias environment’s exit around or under 2381.00 would remain vulnerable to accelerating downward into the close.
Look ahead: Economic Calendar – for Mon May 1, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: The calendar is unusually high-profile and influential for a Monday. More so, any specific reaction to the post-open PMI number has greater potential to be duplicated in reaction to the two later reports being released in tandem with each other, one of which has a reliable track record for influening price action.
Personal Income and Outlays
8:30 AM ET
Gallup US Consumer Spending Measure
8:30 AM ET
*PMI Manufacturing Index
9:45 AM ET
*ISM Mfg Index
10:00 AM ET
Construction Spending
10:00 AM ET
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET
Afternoon Bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2388.50 | 2384.75 |
| …would target | 2393.25 | 2389.75 |
| Bias-down: under | 2381.50 | 2378.00 |
| …would target | 2375.75 | 2372.00 |
| Signal status: waiting for trigger | 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… The problem with minimalism.
About to retest yesterday’s shallow dip?
Resistance at 2388.00 held yesterday’s highs, overnight highs and the open’s highs. My warning in the Market Tour is in-play,
that holding its test would be likely to reverse back under yesterday’s low.
But not necessarily abruptly. Barely testing 2388.00 didn’t stretch the rubber band, so its reaction may lack the velocity of snapping back down. And not testing the 2389.75 bias-up signal has prevented putting into play an offsetting test of the bias-down signal.
The two scenarios for this template are based on two responses to the Friday Factors of the weekend’s impending illiquidity. Both scenarios include a capitulative leg, at some point intraday. One of the scenarios is also influenced by the recent optimism — most recently yesterday’s shallow morning dip — and delays the deeper drop until the afternoon.
So, a bounce may be developing now. The first hour has already dropped 8 points to 2380.50, close to the 2379.00 bias-down signal. Being so far from the bias environment lapsing, correcting the post-open slide becomes likely.
Keep in mind that regardless of the bearish template, there no actual attraction below in-play. Trending down isn’t reliable. And where there’s no reliability to trend, there is vulnerability to reverse.