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 probe above last week’s highs didn’t extend higher intraday, as the session fluctuated narrowly around it. Closing higher Tuesday would qualify as a breakout, which might not be confirmed, but still should be avoided if the pattern is topping.
Gold Feb Contract (GC, ETF: (GLD))
Retesting last Tuesday’s 1214.30 gap up after Friday’s close didn’t neutralize its attraction, nor did retesting it Sunday night. Monday probed it and the prior high to attack 1220.00. No other unfinished business remains outstanding above, but that does not qualify as a sell signal.
Silver Mar Contract (SI, ETF: (SLV))
A third eventual higher close remains outstanding from last week, which Sunday night’s rally was trying to resume. There is no bullish reason to back-and-fill again before extending higher.
30-year Treasury Mar Contract (US, ETF: (TLT))
Sunday night’s test of the 151-12 bounce limit was repeated Monday morning, probing it intraday up to 152-15. The top was already sealed, so closing back under 151-22 should suffice to resume the decline. Closing higher Tuesday would undermine the top pattern.
Crude Oil Mar Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Gapping back down Monday didn’t reject Friday’s gap up, not any more so than Friday had rejected the two mid-week sessions consolidating below. Extending intraday would have qualified as rejection. Instead, the range remains intact, with no clarity on its next break either way.
Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
Fresh lows overnight probed under the 3.19 gap that had remained outstanding. Holding its test is the first stop to bottoming, Closing above 3.25 is the second step, and the minimum requirement to begin reversing up.
Mid-day Update… Bottoming already?
One target met, and not extending lower.
Two pieces of unfinished business below greeted today’s session. Thursday’s oversold RSIs at 2253.00 required a retest, as does the prior week’s 2248.50 low.
This morning’s drop probed 2253.00 once down to 2251.75. No deeper, and for no longer. No lower objective was put into play. Not even 2248.50, although it wouldn’t have been unusual to extend down to it.
Not unusual, perhaps, but also not today, probably. The 2256.75 bias-up signal didn’t trigger, not even with the grace period. It also didn’t hold. Rather, it was still being overlapped to trigger noN-bias. A surge is now testing this morning’s 2261.50 bias-down signal as resistance.
Back under 2257.50 would start to suggest this surge is too late to gain traction, let alone to extend higher. The next lower objective under 2248.50 would be likely. Otherwise, there’s still room up to 2266.75 before signaling a bigger rally underway, targeting new highs.
Look ahead: Economic Calendar – for Tue Jan 24, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Tuesday’s calendar is steady, but not very influential to price action. PMI Flash has had an effect only rarely before.
Redbook
8:55 AM ET
*PMI Manufacturing Index Flash
9:45 AM ET
Existing Home Sales
10:00 AM ET
Richmond Fed Manufacturing Index
10:00 AM ET
4-Week Bill Auction
11:30 AM ET
2-Yr Note Auction
1:00 PM ET
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2261.75 | 2256.75 |
| …would target | 2267.00 | 2262.25 |
| Bias-down: under | 2257.75 | 2253.00 |
| …would target | 2252.75 | 2247.75 |
| 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… A downward bias persists.
Gap down’s recovery attempt fails.
Gapping open 4 points under Friday’s 2266.25 cash session close could only touch the 2261.50 bias-down signal. Reacting up filled the gap up to 2267.50. Retracing back down probed the open’s low, and Friday’s 2260.00 low, down to 2258.75.
Triggering the grace period didn’t prevent triggering late bias-down. The 2255.50 bias-down target is met already — too late to renew the bias-down, but neither was it tested and held through 10:15.. So, extending down probably also retests Thursday’s 2253.00 low, if not also the prior week’s 2248.50 low.
The earliest indication of not extending down would be to recover 2265.00, preferably through the bias environment exit. Otherwise, a deeper pullback is underway.