Bigger Picture
Saturday Review’s recording (for 11/12/16) …
Interest rates have become very attractive compared to stocks, which rallied sharply last week. Rotation may have begun already, but only on the margins, so stocks may have more upside. But it’s not often too long after Gold tumbles that stocks tend to follow.
Meanwhile, Tuesday night’s plunge left a mark. But it didn’t change the structure that greeted last week’s rally. Saturday Review describes that impact, and also addresses the market’s likely paths, their levels, and characteristics to expect.
The following stock requests were reviewed in this order:
BAC, AAPL, FB, GOOGL, NFLX
11/12/2016 09:31:32 David B: Good Morning
11/12/2016 09:32:08 Mark Glezer: gm
11/12/2016 09:32:11 charlie: hi
11/12/2016 09:51:20 Mark Glezer: historically limit downs retested within a month or so?
11/12/2016 09:54:48 sm: While there is “no particular timeframe” on the retest of last weeks low, is there nevertheless a persistent drag on the market’s ability to rally from here – to new highs and beyond? At what point would the market escape the ‘magnetic pull’ of the need to retest that low?
11/12/2016 09:56:05 Mark Glezer: major indexes showed a bearish relationship lately, is that still the case?
11/12/2016 10:09:07 sm: Since the NQs generally represent speculative interest (relative to the S&Ps and DOW), how does this underperformance square with your earlier comment that the context of the rally right now (which has the needed retest of last week’s low still outstanding) will be characteried by speculative fervor?
11/12/2016 10:10:14 Mark Glezer: fresh high in ES – meaning 86-87 would not suffice to expect a durable reversal?
11/12/2016 10:15:34 Mark Glezer: BAC – off to the races?
11/12/2016 10:15:54 sm: Reaching 87 – 92 WOULD change the structure – would it not?
11/12/2016 10:16:15 sm: Isn’t that a new high?
11/12/2016 10:16:52 sm: I interpreted your meaning of ‘structure’ as lower lows and lower highs
11/12/2016 10:17:57 sm: I guess that’s what I’m saying – that if a new high is seen, it means that we have a new structure of higher highs (and higher lows) underway.
11/12/2016 10:22:25 David B: has 2120 and 2160 cash been a very influence level on a break below. it seems when we godown they seem to bounce back above
11/12/2016 10:22:39 David B: godown=gone down
11/12/2016 10:29:15 Bill G: NFLX still above lower highs
11/12/2016 10:30:19 Mark Glezer: thx much
11/12/2016 10:30:28 charlie: tks
11/12/2016 10:31:06 sm: thx
Saturday Review Link
Certainly among the most interesting weeks I’ve ever experienced. But still only a contender. And most of the others were within the past year or two. In the excitement, prices change so dramatically that normal relationships don’t keep pace. We’ll look at some of those opportunities during this weekend’s Saturday Review.
Be sure to join us by 9:30am ET at the link below. After discussing the bigger picture and gaming out strategies for playing next week’s likelier opening setups, we’ll do instant analysis of any stock charts that you request… See you there!
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 Dec Contract (EC, ETF: (FXE, UUP))
Thursday’s gap down to the 1.09.15 sell signal had failed several intraday attempts to trend lower. Friday’s open blipped-up before reversing down sharply to fresh lows at 1.0845. No immediate recovery is likely before extending lower, especially so long as bounces hold 1.0885.
Gold Dec Contract (GC, ETF: (GLD))
Probing under 1252.50 overnight didn’t suffice for fulfilling its test. Instead, it chipped away at support, which gave way through the morning for new lows testing and retesting 1227.00. The drop undermines the prior rally’s confirmed breakout, and is unlikely to recover suddenly after the weekend.
Silver Dec Contract (SI, ETF: (SLV))
Breaking under 18.25 Friday morning extended down sharply through its 17.80 objective to attack prior lows at 17.10 to within a dime. Closing back above 17.45 is the minimum requirement to begin signaling the drop has ended.
30-year Treasury Dec Contract (US, ETF: (TLT))
Fulfilling the 155-30 target extended lower Friday to 155-03 instead of recovering 156-16 to establish that a bottom is forming. Closing back above 156-16 Monday would still keep the door open to bottoming.
Crude Oil Dec Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
The 44.15-44.30 pullback limit failed to hold overnight and Friday gapped down to the decline’s 43.75 target then extended down to fresh lows. A new downleg is underway, next targeting 38.70.
Natural Gas Dec Contract (NG, ETF: (UNG, UNL))
Friday’s narrow ranging extended Thursday’s inside day, and again did not reject recent lows, suggesting that any rally effort short of 2.80 would be unreliable.
Look ahead: Economic Calendar – for Mon Nov 14, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: No econ reports are scheduled for Monday. One intraday Fed speaker may contribute some headlines that influence price action, just as the afternoon’s bias environment is being signaled.
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET
*Robert Kaplan Speaks
1:20 PM ET
Jeffrey Lacker Speaks
4:30 PM ET
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 Dec Contract (EC, ETF: (FXE, UUP))
Thursday’s open gapped down to 1.0915 and probed under it several times, but continually returned to 1.0915 to avoid a clean break under it that would require extending to fresh lows before the next credible rally effort can begin.
Gold Dec Contract (GC, ETF: (GLD))
A shallower bounce than Tuesday night’s test of 1291.50 was reversed down again into Thursday’s open, and extended lower under 1266.00 down to 1258.00 before returning to 1266.00. The next lower objective at 1252.50 would be in-in play unless 1275.00 were recovered first.
Silver Dec Contract (SI, ETF: (SLV))
Flat-to-higher ranging Thursday within Wednesday’s range seemingly awaited Gold’s resolution to its attraction below. Regardless, closing back above 18.80 would signal at least a retest of Tuesday night’s rally to 19.00.
30-year Treasury Dec Contract (US, ETF: (TLT))
Without already trying to bounce overnight out of Wednesday’s intraday plunge to new lows, lower lows targeting 155-30 are likely to be fulfilled before a credible recovery attempt can begin.
Crude Oil Dec Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Flat or flat-to-lower ranging Thursday does not fulfill the requirement to quickly validate Wednesday’s test of 45.70 resistance. The window remains open for a break above it until it holds another test, and so long as 44.15 holds as support.
Natural Gas Dec Contract (NG, ETF: (UNG, UNL))
Gapping down Thursday held 2.60 support and largely remained within Wednesday’s range throughout an otherwise muted reaction to the morning’s EIA report. The first breakout from this setup in either direction would not be reliable for extending until confirmed the following day.