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))
Holding the 1.1450 pullback limit at Tuesday’s close was less relevant than not yet rallying that afternoon. An immediate rally Wednesday could have compensated for the delay had the pattern intended to resolve up. But the pullback extended overnight and Wednesday gapped down to a fresh pullback low. Closing back above 1.1450-1.1485 would be credible for resuming the rally.
Gold Feb Contract (GC, ETF: (GLD))
Narrow, flat ranging again on Wednesday doesn’t prevent retesting last week’s highs up to 1333.00, but it would suggest the bounce’s sponsorship was weak-handed and unable to extend higher.
Silver Mar Contract (SI, ETF: (SLV))
Wednesday’s dip back down to the original pullback limit that had held initially Tuesday must hold its retest and recovery quickly to avoid a deeper corrective dip.
30-year Treasury Mar Contract (US, ETF: (TLT))
Tuesday’s reversal back down from 146-00 to the 145-16 buy signal was already being recovered to a fresh high overnight. Having originally stopped pessimistically short of its potential to 146-04, Wednesday’s retest of Tuesday’s high was likely to probe higher, which it did, but still must close above 146-04 to confirm at least a retest of last week’s 147-00 high.
Crude Oil Mar Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Initially dipping overnight and reacting down again Wednesday morning was recovered into the range, in-line with having greeted the morning’s EIA report from a position of strength. There shouldn’t be much delay before converting the stability into a new rally leg.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Wednesday’s narrow ranging didn’t bounce back into “higher prior lows” so that Monday’s gap down could be neutralized from above. So, Thursday’s EIA report is not being greeted from a position of strength.
Mid-day Update… Less noise, barely ranging.
Volatility has gone into hiding.
The post-open slide that triggered bias-down probed the 2724.50 overnight low on the way to touching yesterday’s 2722.25 low. But no lower. Probing fresh lows during the 10:15-10:30 window made a recovery very unlikely.
A recovery, but not necessarily a retracement. In fact, the post-open slide was retraced almost entirely to within 1 point of its 2736.50 high. And “unfinished business” was left outstanding at this morning’s 2720.25 bias-down target.
Dips since the recovery have repeatedly tested 2726.50 as support. But there are no indications of trending, especially as this afternoon’s no-bias signal is triggered without testing either bias signal. Be careful in this environment not to force a trade.
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Look ahead: Economic Calendar – for Thu Feb 7, 2019
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Thursday’s econ calendar has a couple of high-profile items. But only the 30-year auction is reliably influential to price action, and then mostly by inhibiting it until the results become available, unless they’re horribly surprising.
*Bank of England policy statement
7:00 AM ET
Jobless Claims
8:30 AM ET
EIA Natural Gas Report
10:30 AM ET
*30-Yr Bond Auction
1:00 PM ET
Consumer Credit
3:00 PM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET
Afternoon Bias
| WED afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2736.00 | 2734.75 |
| …would target | 2742.75 | 2741.50 |
| Bias-down: under | 2727.00 | 2725.75 |
| …would target | 2721.00 | 2719.75 |
| Signal status: NO-BIAS | . | |
| BIAS VIDEOS… INTRO // EXAMPLE | ||
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… More noisy, less range-y.
Pre-open recovery and post-open surge crumble.
Ranging sideways through midnight between 2730.00-2735.00 had broken sharply lower to 2724.50. All of which was still within yesterday afternoon’s range. And all of which was recovered before the open up to 2733.00 and then post-open up to 2736.50.
All of which has been reversed to probe under the overnight low down to 2722.25. And all of which is within yesterday afternoon’s range.
Meanwhile, the 2727.75 bias-down signal has triggered, putting into play its 2720.75 target. A bounce would be likely to fail and the trend is likely to resolve down. But a bounce does have room to probe the 2727.75 bias-down signal and room for noise up to 2730.75 before suggesting a bigger detour underway to the upside, instead.