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 Mar Contract (EC, ETF: (FXE, UUP))
Gapping down to a fresh low Wednesday and extended to attack 1.0500 was reversed back above Tuesday’s close to test the 1.0585 bounce limit in positive territory. This once again leaves a gap below all prior lows that wants to be retested from above. The last instance took an immediate and sizable detour, making this instance likelier to resolve down sooner.
Gold Apr Contract (GC, ETF: (GLD))
Tuesday’s recovery from gapping down had neutralized the attraction above at the gap back up to Friday’s close. Without extending higher immediately, Wednesday was vulnerable to retracing the recovery. The sell signal had been adjusted up to 1233.50 and was tested Wednesday.
Silver Mar Contract (SI, ETF: (SLV))
No new sponsorship emerged Wednesday to extend Tuesday’s intraday recovery that had peaked upon filling the gap back up to Friday’s close. The pullback held its test of 18.00, but the rally can’t afford to hesitate extending.
30-year Treasury Mar Contract (US, ETF: (TLT))
Overnight strength filled the gap back to Friday’s 151-28 open which itself had retraced back down to the 151-11 bounce limit. Wednesday morning soon reversed sharply from 152-06 back under 151-11 to 150-24.into negative territory. Its reaction is trying to recover 151-11.
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Tuesday’s breakout had been largely retraced, albeit not entirely. But its overnight reversal gapped down at Wednesday’s open, not confirming Tuesday’s shallow breakout. The newly-adjusted 53.55 sell signal was itself tested.
Natural Gas Apr Contract (NG, ETF: (UNG, UNL))
Fresh lows down to 2.64 overnight formed an inverted Head & Shoulders pattern that greeted Wednesday’s open by rallying back into Tuesday’s range. Extending higher to 2.75 during the morning was reversed back down under Tuesday’s low, leaving only a fresh high Thursday to reverse momentum back up.
Mid-day Update… Attraction above.
Morning’s objective still outstanding.
Holding this morning’s test of its 2356.75 bias-down signal put into play an offsetting test of the 2366.00 bias-up signal. The morning’s 2363.25 high was corrected down to 2358.00, and now the morning’s high is being attacked.
This afternoon’s 2362.00 bias-up signal didn’t hold or trigger. This is a noN-bias environment. The setup doesn’t encourage rallying, but neither does it prohibit it.
Hovering around 2362.00 until the noN-bias environment starts lapsing often behaves as if the bias was just signaled. The bias environment can’t dip too deeply to maintain that potential.
Extending higher would target a probe above yesterday’s highs. It would not require closing any higher. Yesterday’s two reactions down help to explain the hesitation in recovering already. But fresh highs remain likely so long as 2358.50 now holds as support.
Look ahead: Economic Calendar – for Thu Feb 23, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Thursday’s calendar is busy, the week’s busiest. But only one econ report has a reliable track record of influencing price action. Any noticeable reaction to the pre-open reports or the Fed speaker is likely to be duplicated by the post-open reports.
Jobless Claims
8:30 AM ET
Chicago Fed National Activity Index
8:30 AM ET
*Dennis Lockhart Speaks
8:35 AM ET
FHFA House Price Index
9:00 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
*PMI Services Flash
9:45 AM ET
EIA Natural Gas Report
10:30 AM ET
Kansas City Fed Manufacturing Index
11:00 AM ET
EIA Petroleum Status Report
11:00 AM ET
7-Yr Note 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 | 2364.00 | 2362.00 |
| …would target | 2369.25 | 2367.50 |
| Bias-down: under | 2357.75 | 2356.00 |
| …would target | 2352.50 | 2350.50 |
| Signal status: noN-BIAS, TESTED BIAS-UP 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… Warning shot.
Pre-open dip holds support.
Attacking yesterday’s low down to 2355.25 a couple of hours before the open did not extend. Bouncing greeted the open essentially at 2357.50, which is yesterday’s afternoon bias environment low.
A “session-long decline” setup had formed. But would it trigger? Holding the prior low’s test would accomplish the opposite effect. Expending enough selling pressure to produce all off the setup’s bearish elements, but not exploiting it, would be a gift to buyers.
In fact, post-open action did not extend down under 2357.50. Fluctuating between 2356.00-2359.00 ultimately held the 2356.75 bias-down signal’s test, putting into play an offsetting test of the 2366.00 bias-up signal. Already, fresh post-open highs are printing 2361.50.
The session-long decline setup wasn’t optimal. Yesterday’s futures did slide sharply, hiding the gap down. So, the consequence of a session-long rally isn’t reliable. Nevertheless, we’ll monitor for that potential of probing fresh highs through all but one intraday timing window.
Regardless of its degree and duration, a recovery is likely so long as 2357.50 holds as support. The recovery must create some new higher attraction to maintain the rally, or else this morning’s weak open will have been only a warning shot across the bow.