Posts by Rod David
Market Wrap (recording & summary)
A blow-off is underway. It’s not just four consecutive higher closes from the previous range. Or that three of those gapped up and all of them probed higher during the afternoon. Those elements reflect optimism, but not necessarily extended optimism or impatience.
The blog-off indication came after Tuesday’s close. It really began at the final hour’s entry, when a pullback from 2335.25 had dipped 4 points, but no deeper. Retracing the entire dip into the cash session close then extended post-close to attack 2338.00. We haven’t yet seen a post-close short-squeeze, until now.
There’s little to no chance that the trend extreme has printed. Or that reversing down into Wednesday’s open would not soon recover. But opening under Tuesday afternoon’s 2331.00 bias environment low would start to reject the rally above it. That would be especially bearish near-term if only fresh highs are probed overnight.
Regardless, a pullback has room down to 2327.00 and 2324.50 while being only temporary backing-and-filling. Extending higher first would next target 2343.00-2344.00.
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 Mar Contract (EC, ETF: (FXE, UUP))
Firming overnight was reversing already into Tuesday’s open, and then dropped to fresh lows amid Yellen’s Senate testimony. The 1.0570 target was met at the low. Extending the drop would next target 1.0470 so long as 1.0605 holds bounces.
Gold Apr Contract (GC, ETF: (GLD))
Gapping up Tuesday filled the gap back to Friday’s 1236.00 close, and then reversed back into negative territory amid Yellen’s Senate testimony. Fluctuating around unchanged and hovering under 1229.00-1230.00 must hold above 1220.00 to maintain near-term potential for filling the gap back to last Wednesday’s 1242.00 opening gap.
Silver Mar Contract (SI, ETF: (SLV))
Gapping up Tuesday within Monday’s range probed higher initially, and then reversed back into negative territory amid Yellen’s Senate testimony. Positive territory was quickly recovered, and not relinquished. The 18.18 target remains in-play so long as 17.50.
30-year Treasury Mar Contract (US, ETF: (TLT))
Attacking Monday’s lows overnight had already threatened to reverse its intraday bounce back up to 151-11. Plunging post-open to fresh lows at 149-29 filled the gap back to Feb 3 where the rogue rally had developed. Bounce should hold 150-26 to maintain the decline’s momentum.
Crude Oil Mar Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Gapping up Tuesday only tested the 53.55 resistance whose recovery would all but ensure extending up to 55.25 next. Reacting back down to 53.00 held, while breaking back under 53.25 is still necessary to signal a new downleg underway.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Fresh lows overnight fulfilled the 2.91 objective, and gapped down there, ranging very narrowly around it and 1-2 cents under it. There is no new signal, and an immediate recovery is unlikely after having gapped down on Tuesday.
Mid-day Update… Things are moving quickly now.
Targets being met faster than they’re put into play.
Two more probes under the 2321.50 bias-down signal during this morning’s no-bias environment both recovered. The bias environment exit was above the pre-10:15 low, 
so an offsetting test of its 2330.75 bias-up signal became “unfinished business above.”
That was as-of 11:30, when this morning’s bias environment started lapsing. Now the afternoon’s bias environment is triggering at 1:20, and this morning’s 2330.75 objective is already being tested. So is the overbought RSIs from yesterday’s 2329.00 high, and its 2331.50 bias-up target left outstanding.
Even faster, as this afternoon’s 2327.00 bias-up signal is triggering, its 2332.25 bias-up target is already met. Too much, too fast? Well, not exceeding the bias-up target at 1:20 has failed to renew the bias-up signal.
It’s still a bias-up environment, so the rally is free to extend. But often it doesn’t, not when the target holds its test through 1:20. Overbought RSIs at the 2332.75 high do require a retest. Extending higher anyway could put into play 2343.00-2347.00.
There’s otherwise room back down to the 2327.00 bias-up signal during the bias-up environment. Breaking under it as the bias environment lapses could start sealing a top.
Look ahead: Economic Calendar – for Wed Feb 15, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Fed Chair Yellen’s second day of Humphrey-Hawkins testimony is at the House Wednesday. There’s often a predictable price reaction when lifting the embargo to her opening remarks, if there was a reaction during her first day’s testimony. Two other Fed speakers appear later.
MBA Mortgage Applications
7:00 AM ET
*Consumer Price Index
8:30 AM ET
Retail Sales
8:30 AM ET
Empire State Mfg Survey
8:30 AM ET
Industrial Production
9:15 AM ET
Atlanta Fed Business Inflation Expectations
10:00 AM ET
Business Inventories
10:00 AM ET
Housing Market Index
10:00 AM ET
*Janet Yellen Speaks
10:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
4-Week Bill Auction
11:30 AM ET
*Eric Rosengren Speaks
12:00 PM ET
*Harker Speaks
12:45 PM ET
Treasury International Capital
4:00 PM ET
WedEX option expiration bias signal
4:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2329.75 | 2327.00 |
| …would target | 2334.75 | 2332.25 |
| Bias-down: under | 2322.50 | 2320.00 |
| …would target | 2317.25 | 2314.50 |
| 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.