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))
Sunday night’s test of the 1.0750 bounce limit was reversed to gap down under prior lows Monday and test 1.0640. .Despite only filling the gap back up to Friday’s 1.0715 close and neutralizing its attraction above, an overnight rally gapped up and extended to fresh highs attacking 1.0825. Regardless of its catalyst, a second consecutive higher close on Wednesday would confirm a much larger rally underway. So, retesting Monday’s low requires reversing down Wednesday.
Gold Apr Contract (GC, ETF: (GLD))
Recovering 1198.00 (basis Apr, 1195.00 basis Feb) overnight extended higher Tuesday to fill the gap back up to 1212.00 (basis Apr, 1209.00 basis Feb). Closing Wednesday above 1215.50 would target 1233.50 and potentially 1257.00. Back under 1203.00 would instead signal a corrective bounce had ended, and a new downleg is likely underway.
Silver Mar Contract (SI, ETF: (SLV))
Chipping away at resistance Monday was rewarded by Tuesday’s gap up, test of the 17.63 objective, and fulfillment of the outstanding third higher close. Extending any higher would next target 18.71.
30-year Treasury Mar Contract (US, ETF: (TLT))
Renewed weakness and stocks may be as responsible Tuesday as it was Monday for avoiding the decline’s resumption. The reaction was greater, bouncing nearly 1 point up to 151-06. Regardless of its catalyst, the delay should end soon with FOMC due Wednesday.
Crude Oil Mar Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Probing fresh lows overnight down to the ultimate 52.25 sell signal was reversed before the open, which gapped up and extended higher to test 53.55. Closing under the original 53.25 sell signal keeps alive the distributive pattern, but its recovery would likely test at least 54.25.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Tuesday’s open gapped down to 3.12 to immediately fill the last nearby gap outstanding below. Closing back above 3.25 would start to signal the drop had ended.
Mid-day Update… Waiting for bias.
Unfinished business below is neutralized.
Stopping optimistically 3 ticks short from touching yesterday’s 2263.50 low did not satisfy it. It was an actual print, and not just a calculable objective.
Reacting up to 2269.75 was retraced almost entirely, also stopping optimistically short of touching the 2264.00 low. The next bounce resolved down to a fresh low at 2262.25, satisfying the objective.
Reacting up again attacked the 2268.75 bias-up signal during the noon hour held. This is a no-bias environment. Probing a little higher would have been allowable, but instead another dip is attacking 2264.00. There’s room down to the 2260.50 bias-down signal during the no-bias environment.
Trending gets more difficult as tomorrow’s FOMC statement approaches. But another downleg would be allowable after the bias environment begins lapsing. Its break would have potential to test 2248.50. Back above 2268.75 would target a retest of the 2276.75 overnight highs.
Look ahead: Economic Calendar – for Wed Feb 1, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Another busy day Wednesday, and then some. ADP is reliable for triggering a reaction. And being post-open, that would likely be duplicated in reaction to post-open reports that have tract records for influencing price action. Things are likely to slow down ahead of the afternoon’s FOMC decision.
MBA Mortgage Applications
7:00 AM ET
*ADP Employment Report
8:15 AM ET
Gallup U.S. Job Creation Index
8:30 AM ET
*PMI Manufacturing Index
9:45 AM ET
*ISM Mfg Index
10:00 AM ET
Construction Spending
10:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
*FOMC Meeting Announcement
2:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2273.25 | 2268.75 |
| …would target | 2278.25 | 2273.75 |
| Bias-down: under | 2265.00 | 2260.50 |
| …would target | 2259.50 | 2255.00 |
| Signal status: NO-BIAS | 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 search for buyers resumes.
Opening dip attacks yesterday’s low.
Yesterday afternoon had been trying to trigger a sell signal under 2270.00 when a late rally began. Originating late, its sponsorship was weak-handed, dooming it to failure. 
Further undermining the recovery attempt, the late bounce fulfilled the maximum bounce target at 2277.00. And held it. And closed AT the critical 2275.00 instead of above it.
One overnight plunge to 2268.00 was recovered entirely to 2275.00. The open could have isolated the probe under 2275.00 to the overnight. It didn’t. The open was greeted at 2269.00-2272.00.
Yesterday afternoon’s sell signal under 2270.00 would have targeted a retest of the morning’s 2263.50 low, required by its oversold RSIs. That was attacked to within 3 ticks while probing under this morning’s 2271.50 bias-down signal and its 2266.00 bias-down target.
The reaction up triggered a buy signal above 2266.75 that extended up to 2269.75. Having fulfilled the bias-down target, entering the noon hour back above the 2271.50 bias-down signal could launch a rally back to new highs.
But stopping optimistically short of actually touching yesterday’s low isn’t likely to produce a durable recovery. Fresh lows would target 2259.75, which could hold as the low, or else break lower targeting a retest of 2248.50.