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))
Still fluctuating around the 1.0690 pullback limit had begun taking too long to rely on it holding, let alone launching a recovery. Hovering at the five-day range’s lower-end Wednesday is vulnerable to breaking lower.
Gold Jun Contract (GC, ETF: (GLD))
Despite Tuesday’s second consecutive higher close confirming Monday’s breakout above 1252.00, Wednesday’s open gapped down back under 1252.00 and probed lower to 1245.50. Closing lower Thursday would signal momentum reversing down, but the rally otherwise remains intact.
Silver May Contract (SI, ETF: (SLV))
Fluctuating around 18.30 Wednesday probed under Tuesday’s low, which had already filled the gap back down to Monday’s close. Rallying has no excuse not to be underway through Thursday morning.
30-year Treasury Jun Contract (US, ETF: (TLT))
Gapping down to the 151-12 sell signal initially extended to attack the previous 150-26 sell signal before bouncing to fill the gap back up to Tuesday’s 151-21 close. There is no unfinished business above to inhibit reversing down.
Crude Oil May Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Gapping up Wednesday extended the 48.50 buy signal to test 51.88, a little too aggressive at this stage to avoid reacting down on the morning’s EIA report. Filling the gap back down to Tuesday’s 51.03 close held, leaving outstanding the gap up to help resume the rally targeting 53.55.
Natural Gas May Contract (NG, ETF: (UNG, UNL))
Tuesday’s surge to fresh highs was so unnecessary that it could only mean higher highs would follow, which they did on Wednesday. It’s not a breakout and confirmation, but still a big enough departure from the distributive template that the pattern’s predictability is unreliable.
Mid-day Update… Tripping up.
FOMC reaction offers a correction.
This morning’s doubly-renewed bias-up target at 2374.25 was touched, pierced by 3 ticks at this morning’s high. Its reaction down wasn’t shallow after all, triggering a pattern that targeted 2365.00. Touching the target has reacted back up, recovering all but 1 tick of this morning’s rally.
That’s a lot of optimism ahead of this afternoon’s FOMC Minutes. It’s also pessimistically short of actually touching the high. And now a pessimistic knee-jerk reaction to the news has attacked 2369.00 as support, which was this morning’s renewed bias-up target.
A little deeper pullback has room down to 2367.75 before starting to signal momentum actually reversing down. Meanwhile, the high requires a retest, probably up to 2377.00. Just closing above 2369.00 would all but ensure the next major objective in-play to probe new highs. Closing under 2369.00 would make the rally fragile, again.
Look ahead: Economic Calendar – for Thu Apr 6, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Jobless Claims is the highest profile of Thursday’s reports. But it is no likelier to influence price action than the session’s other econ reports.
Challenger Job-Cut Report
7:30 AM ET
Jobless Claims
8:30 AM ET
Gallup Good Jobs Rate
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
EIA Natural Gas Report
10:30 AM ET
Treasury STRIPS
3:00 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 | 2375.25 | 2372.00 |
| …would target | 2380.25 | 2377.00 |
| Bias-down: under | 2367.50 | 2364.25 |
| …would target | 2361.50 | 2358.25 |
| Signal status: BIAS-UP | 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… Strong.
Pre-open setup launches post-open surge.
I had noted in the pre-open Market Tour that it might seem self-evident, but the path up is up. Sometimes, the path higher requires first resolving unfinished business below. Not today. 
As much as yesterday prevented invalidating its attraction below, price extended higher. A dip probably wouldn’t have been absorbed.
In fact, rallying into and out of the pre-open ADP report probed above both Tuesday AND Monday’s highs. Greeting the open at 2363.00 was likely to extend higher without delay, if extending higher at all. Quickly rallying through the 2364.00 bias-up target extended relentlessly to the 2369.00 renewed bias-up target.
And then through it to the doubly-renewed 2374.25 target, which was just probed by 3 ticks.
Reacting down from 2374.25 would require a retest of the highs, as both 1-minute and 3-minute RSIs are simultaneously overbought. Exiting the bias environment above 2369.00 would suggest that the pullback from 2400.00 has ended, putting into play new highs.
Hesitation, consolidation, or backing-and-filling ahead of this afternoon’s FOMC Minutes release would be justified. It also wouldn’t be surprising for any pause to be shallower than deep, if at all.