Posts by Rod David
Market Wrap (recording & summary)
SPECIAL PROGRAMMING NOTE: I WILL BE UNAVAILABLE 10:30-2:30 ET (after the market’s first hour, until the afternoon bias environment begins lapsing). The chaRTroom will remain open throughout.
Largely recovering Tuesday morning’s 18-point plunge has the same two or three meanings the same setup had on Monday. The drop was the product of weak-handed sellers, nothing prevents probing even lower intraday again, and probing lower could attract strong-handed sellers anyway.
The strong-handed / weak-handed struggle can cut either way. It stops being bottoming, and starts rolling over, if there’s rotation between the sponsorship.
For example, Tuesday’s drop to 2333.25 recovered 2343.50 too late to be the product of strong hands. The next threshold of recovery at 2349.00 was met, but not exceeded. And not for lack of opportunity — it was tested before entering the afternoon bias environment and coming out of it, then again into the close.
So, sellers haven’t definitively retaken control. The intraday probe under the 2345.00 area now requires buyers to leverage that hesitation, definitively themselves by greeting Wednesday’s open in rally mode. The setup is similar to what Monday’s close left for Tuesday’s open, but no longer optional — any delay creates large vacuum that would require 2321.00 to plug it.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Please also test the Adobe 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 up above Monday’s 1.0640 high initially extended higher to test 1.0665 but dipping back under Monday’s highs. The “ineffectual pessimism” does require resolving down immediately to confirm fresh lows at 1.0550 remain in-play.
Gold Jun Contract (GC, ETF: (GLD))
Gapping up Tuesday above Monday’s 1259.00 high extended to probe above Monday morning’s 1273.00 high to test 1276.00. The pattern doesn’t require any higher high, but the rally remains intact so long as 1272.00 holds as support.
Silver May Contract (SI, ETF: (SLV))
Rallying through Tuesday morning tested the 18.30 pullback limit that had broken sharply lower Friday afternoon. Pullbacks must now hold 18.06 to maintain the recovery potential.
30-year Treasury Jun Contract (US, ETF: (TLT))
Gapping up slightly Tuesday morning amid more geopolitical anxiousness extended sharply through the morning to test Friday’s 153-04 high. Back under 152-04 would suggest the topping pattern remains intact.
Crude Oil May Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Initially dipping Tuesday morning to 52.70, OPEC headlilnes triggered a spike up during the noon hour to a fresh high attacking the 53.55 buy signal to within 20 cents. The pullback limit is now 52.00.
Natural Gas May Contract (NG, ETF: (UNG, UNL))
Gapping down slightly Tuesday extended to within 1 cent of the 3.13 sell signal. Its break wouldn’t be very reliable without first bouncing, potentially back above 3.19 to 3.27.
Mid-day Update… Potato, potahto.
Much of morning’s drop already recovered. Or corrected.
The timing of this morning’s downlegs resemble yesterday, still coinciding with negative headlines. Today’s aren’t recovering before resolving down, so recovering them would be done by one comprehensive upleg — if done, at all. The minimum objective would be 2349.00.
2349.00 is pretty far removed from the morning’s 2333.25 low. The bias environment exit was just 3 points short of the 2343.50 level whose recovery could have undermined sellers already. Too late for that, now 2349.00 is required.
So, undermining sellers now requires a more substantial move. Considering the time limit, that move will need to be steep. In fact, the noon hour just produced a 7 points surge to 2345.00. And it has added another 6 ticks. The 2349.00 objective is no longer so much further away.
This being the noon hour, this might be only a temporary corrective bounce. Triggering the 2343.00 bias-up signal would help to undermine sellers. But entering or exiting the bias environment above its 2349.50 bias-up target would be optimal.
Look ahead: Economic Calendar – for Wed Apr 12, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: No influential reports are due Wednesday, although the Atlanta Fed expectations is high-profile.
MBA Mortgage Applications
7:00 AM ET
Import and Export Prices
8:30 AM ET
Atlanta Fed Business Inflation Expectations
10:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
10-Yr Note Auction
1:00 PM ET
Treasury Budget
2:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2346.00 | 2343.00 |
| …would target | 2352.25 | 2349.50 |
| Bias-down: under | 2337.75 | 2335.00 |
| …would target | 2331.50 | 2328.50 |
| Signal status: BIAS-UP, BIAS-UP TARGET MET | 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.