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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 Sep Contract (EC, ETF: (FXE, UUP))
Probing a fresh low and testing “lower prior highs” under the 1.1765 sell signal down to 1.0707 was mostly recovered intraday, but not rejected. Any initial weakness Wednesday would be credible for a more durable break lower.
Gold Dec Contract (GC, ETF: (GLD))
Tuesday’s drop under the 1285.00 pullback limit stopped short of its potential to 2471.00, but its reaction up also stopped short of recovering 1280.00 to reverse momentum up. Regardless, the pattern results in an Island, which is generally reliable for being retested, but from lower levels if not already underway within 1-2 days.
Silver Sep Contract (SI, ETF: (SLV))
Retesting the 17.05 pullback limit overnight didn’t hold and instead broke sharply lower Tuesday morning to 16.60. Its reaction up tested 16.70, whose recovery would suggest the pullback had ended. Closing under 16.60 would signal a deeper pullback underway.
30-year Treasury Sep Contract (US, ETF: (TLT))
Gapping down to the 154-30 pullback limit and sliding to nearly fill last week’s gap back down to 153-22 expended almost all allowable selling pressure without altogether reversing the trend down. Closing back above 154-20 — which a bounce was overlapping mid-afternoon — would almost single-handedly launch the next upleg.
Crude Oil Sep Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Tuesday’s open quickly extended down from Monday’s close under the 48.25 sell signal to test 47.00. The extra confirmation makes the reversal more reliable, targeting a retest of prior lows.
Natural Gas Sep Contract (NG, ETF: (UNG, UNL))
Monday’s reaction down to 2.91-2.92 support had reacted up into the close, but Tuesday didn’t immediately exploit it by extending any higher. .
Mid-day Update… In proximity.
Hovering above the trend change signal.
Last Thursday’s trend change signal triggered by closing under 2459.00. That is the interim low between the rally’s last two highs. Closing above it yesterday threatened to invalidate the signal, which would be done by a second consecutive close above it.
Opportunities to reconfirm the trend change signal have been slipping by. Opening back under 2459.00, and entering or exiting the noon hour back under it, both have failed. But each window did attack 2459.00. Closing back under 2459.00 would still be valid, but would not allow any delay to extending down Wednesday.
Back under 2461.50 would at least target a test of 2459.00, but not necessarily close under it. Meanwhile, back above 2464.50 and 2467.00 would increasingly point higher.
Look ahead: Economic Calendar – for Wed Aug 16, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday morning’s steady stream of econ reports don’t include any high-profile items, or anything having a reliable track record for influencing price action. The afternoon’s FOMC Minutes is sure to get a reaction, with the next Fed decision both imminent and not assured.
MBA Mortgage Applications
7:00 AM ET
Housing Starts
8:30 AM ET
Atlanta Fed Business Inflation Expectations
10:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
*FOMC Minutes
2:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2468.00 | 2466.75 |
| …would target | 2473.00 | 2471.75 |
| Bias-down: under | 2461.00 | 2459.75 |
| …would target | 2454.50 | 2453.25 |
| 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…Double-edged sword.
Overnight rally fulfills target, attracts sellers.
Any influence of overnight price action on intraday must be obvious during the opening 15 minutes of volatility. So, meeting the 2471.00-2473.50 objective overnight
and already retracing it left the open two divergent options.
The first option was to repeat the rally. The 2471.00-2473.50 objective is still resistance, but it can at least be retested intraday. The challenge was a pre-open bounce that already had retraced 61.8% back to the overnight high. That’s significant resistance. And it held.
The second option was to extend the overnight reversal down. More so, not to allow the opening 15 minutes to create any reversal setup, let alone to recover any relevant resistance.
The latter option developed, dipping back into yesterday afternoon’s range. And then deeper to its lower-end at 2462.50. Bounces have resolved down, putting into play an offsetting test of the 2459.00 bias-down signal, which has now been attacked to within 1 point.
By the way, testing 0the 2472.50 bias-up signal overnight doesn’t equate to testing it intraday. So, it wasn’t rejected intraday, and an offsetting test of the 2453.00 bias-down target is not required. But it’s still likely if 2459.00 is broken going into or coming out of the noon hour. Otherwise, we can’t yet rule out a bigger recovery.