Bigger Picture
Reminder: No Saturday Review this weekend.
If you’re planning to attend this weekend’s Saturday Review, then it may interest you to know that it is cancelled. If you’re showing up anyway, pack a sandwich. And enjoy this re-run of Friday’s post-market Wrap, which was expanded to include a big picture review.
Post-market Wrap (recording & summary)
This weekend’s Saturday Review has been cancelled, so Friday’s post-market Wrap was extended to discuss the bigger picture and stock requests. Its recording is not the usual Saturday format, but the usual weekday format..
The week ended with one piece of “unfinished business above” at 2175.50. That’s 3 points above Thursday’s high. Being in the context of unfinished business above, Friday’s slide is assumed to be a temporary detour. But that’s the assumption anyway, since shallow trending or ranging on Fridays can be the week’s least predictive price action.
That’s not to say nothing relevant was accomplished Friday. Its low filled the gap back down to Wednesday’s close, and held it. Already trending up Sunday night to some degree, and gapping up Monday, is somewhat likelier at this stage — assuming no dramatic weekend developments that would require being absorbed.
Otherwise, any lower intraday Friday would have targeted at least 2149.00. That could still hold if tested Sunday night, but the delay makes any selling likelier to test “lower prior highs” down to 2143.50. And there’s room below it to 2138.00 before suggesting that 2175.50 won’t be tested soon.
The following stock requests were reviewed in this order:
GDXJ, ERII, POT, JJG, AERO, KSHB, CMG
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))
The portion of Thursday’s break back under 1.1265 was retraced immediately Friday, and held through the morning. The afternoon ranged around it, resisted by the gap back to Thursday’s 1.1280 open, neutralizing its attraction without reversing momentum up.
Gold Dec Contract (GC, ETF: (GLD))
Friday’s dip was still overlapping 1341.50 but not necessarily closing under it. It isn’t optimal for rejecting the week’s rally, but it does prevent confirming Thursday’s close above resistance, keeping the door open to another downleg without delay.
Silver Dec Contract (SI, ETF: (SLV))
Closing back at or under 19.85 Friday does prevent the recent multi-day surge from being confirmed. Closing Friday back under 19.75 would have been optimal. Alternatively, almost any initial weakness Monday — if not already sliding Sunday night — would be credible for retracing the week’s rally.
30-year Treasury Dec Contract (US, ETF: (TLT))
Extending higher Friday would have confirmed Thursday’s breakout from the ongoing bottoming pattern that we’ve been monitoring. Not yet confirming it does not equate to invalidating it. But the breakout’s rally should become obvious no later than Tuesday if valid.
Crude Oil Nov Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Friday’s gap down extended to fill the gap back to Tuesday’s ~44.25 close. The test should hold, although it can temporarily probe a little deeper before recovering Monday. Regardless, Wednesday’s confirmed breakout already requires there to be at least an eventual fresh high close.
Natural Gas Oct Contract (NG, ETF: (UNG, UNL))
Thursday’s reaction down on its EIA report extended lower Friday, holding a test of the “lower prior highs” at 2.94. Momentum has not reversed down, but the lower prior highs test must hold through the next close, if not already start recovering to resume the rally.
Look ahead: Economic Calendar – for Mon Sep 26, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Monday’s Fed speaker is more influential to price action for the timing of his remarks, coming when the market is trying to establish post-open action. The two econ reports are otherwise not reliably influential to price action, other than more housing sector data having a chance to deviate from the prior week’s reports .
*Neel Kashkari Speaks
9:30 AM ET
New Home Sales
10:00 AM ET
Dallas Fed Mfg Survey
10:30 AM ET
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET
2-Yr Note Auction
1:00 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))
Gapping up Thursday retested the 1.1265 sell signal that had triggered last week by gapping down. Extending higher intraday to 1.1300 filled the gap back preceding the sell signal’s original break, neutralizing its upside attraction. Closing back under 1.1265 is credible as re-triggering the sell signal.
Gold Dec Contract (GC, ETF: (GLD))
Wednesday’s post-close surge in reaction to the FOMC news was not rejected overnight, and firmed slightly into Thursday’s open to test the original 1341.50 sell signal. Closing above it Thursday, and confirmed by a second consecutive higher close Friday, would take 1296.00-1297.00 off the table for a bigger rally leg. Back under 1329.00 would resume the decline.
Silver Dec Contract (SI, ETF: (SLV))
Gapping up above 19.75-19.85 and closing above it would be confirmed as being the beginning of a new upleg by a second consecutive higher close Friday. Otherwise, back under 19.75 would trigger a new downleg.
30-year Treasury Dec Contract (US, ETF: (TLT))
Gapping up and extending higher Thursday to test 168-00 is further confirmation that a bottom has formed, but it doesn’t prevent backing-and-filling that tests the past week’s “lower prior highs” before extending higher.
Crude Oil Nov Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Thursday’s gap up and higher close confirmed Wednesday’s breakout, and the likelihood for this leg to now target 49.00. Closing back under 45.00 could extend lower to fresh lows, but only in the context of being temporary.
Natural Gas Oct Contract (NG, ETF: (UNG, UNL))
Thursday’s EIA report was greeted from a position of strength for not having rejected Tuesday’s breakout, although Wednesday had not confirmed the breakout. The intraday reaction down held “lower prior highs” and remains likely to recover and resume the rally.