Posts by Rod David
Pre-close View… New highs.
REMINDER: MARKET WRAP BEGINS AT 3:33pm ET.
The breakout from this morning’s range has persisted through the noon hour, and through the afternoon bias environment. In fact, it exited the bias environment above the noon hour’s high. And not it is also probing fresh highs into the final hour.
That’s traction, and it suggests tomorrow morning will also trend u, so long as the final hour includes a correction that doesn’t reverse momentum down.
The only unfinished business above still outstanding is the new trend high close that became required three Fridays ago. Otherwise, 2278.25 has been tested, and a 2800.00 handle is printing.
RSIs are on the cusp of being overbought, which is too close to consider a divergence. A reaction down today could still recover if done quickly. A new high close is not at all assured.
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))
Flat-to-higher-to-flat-again ranging Tuesday avoided confirming Monday’s fresh high close, which was already dubious as a breakout. Closing lower Wednesday would be likely to extend down, if not also to form a top.
Gold Feb Contract (GC, ETF: (GLD))
Having neutralized all unfinished above Monday, reacting down immediately Tuesday had room down to 1209.00 before suggesting momentum is already reversing down. The pullback limit was at least tested intraday, and probed after the close.
Silver Mar Contract (SI, ETF: (SLV))
Tuesday’s narrow ranging didn’t extend Monday’s bounce, and leaves outstanding again the eventual third higher close that was indicated by last week’s confirmed breakout.
30-year Treasury Mar Contract (US, ETF: (TLT))
Gapping down Tuesday to 151-11 and extending down intraday prevented invalidating the sealed top pattern, and all but confirming that Monday’s rally was only a corrective bounce, if not also a last gasp before resuming the downleg.
Crude Oil Mar Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Tuesday’s rally back into last week’s highs tested 53.25 resistance, but didn’t probe a fresh high intraday, so the pattern’s resolution remains tenuous. .
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Gapping up Tuesday peaked short of the 3.41 level whose recovery would suggest a bigger bounce underway, despite being premature and leaving unfinished business below. Back under 3.23 would likely trigger another downleg underway targeting a retest of prior lows under 3.12.
Mid-day Update… Sneaking up on sleeping sellers.
Noon hour rally rewarding its weak-handed sponsorship.
Not testing 2266.00 bias-up signal by 10:15 meant not rejecting it. And that meant no 
consequence of an offsetting test of the bias-down signal. It also meant not extending above 2266.00 during the no-bias environment. A probe above it was retraced as the bias environment began lapsing, and left no unfinished business below.
Now price has extended to fresh session highs into the noon hour. Into the noon hour, and out of it. Fresh session highs are attacking this afternoon’s 2275.25 bias-up target to within 2 ticks. And the bias signal doesn’t even trigger for another 5 minutes.
The series of higher highs and higher lows is forming a trend, so it’s premature to anticipate its reversal down. RSIs diverging negatively may be preparing for the trending to peak, but that doesn’t equate to a sell signal — which would be indicated by a reversal setup or topping pattern.
Originating after the bias environment lapsed is allowing the trend to persist intraday. Regardless, yesterday’s pattern considers this rally has premature because of the shallow open. Doomed to failure, or not, new highs and a new high close are possible today. But then so would be a relatively abrupt reaction down.
Look ahead: Economic Calendar – for Wed Jan 25, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: The week’s second and third Housing sector data are released Wednesday. Their impact on price action may be informed by Tuesday’s, and then by whether Wednesday’s reports contain surprises.
MBA Mortgage Applications
7:00 AM ET
FHFA House Price Index
9:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
2-Yr FRN Note Auction
1:00 PM ET
5-Yr Note Auction
1:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2274.25 | 2269.75 |
| …would target | 2279.75 | 2275.25 |
| Bias-down: under | 2267.75 | 2263.25 |
| …would target | 2262.00 | 2257.50 |
| 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.