Posts by Rod David
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2167.25 | 2160.75 |
| …would target | 2172.00 | 2165.75 |
| Bias-down: under | 2157.50 | 2151.25 |
| …would target | 2152.25 | 2145.75 |
| Signal status: LATE BIAS-DOWN | FAQ | |
| INTRO VIDEOS #1 and #2 | ||
1. At 10:15, 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 10:15 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 10:15 would invoke a grace period through 10:30 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 10:30 after invoking the grace period would trigger “noN-bias,” with no bias influence.
Post-market Wrap (recording & summary)
Perhaps anxiousness ahead of Friday’s pre-open Employment Situation report is responsible for paralyzing Thursday afternoon’s price action. The 10-point surge into the noon hour came to a sudden stop as the afternoon fluctuated choppily within a narrow 3-point range.
Similarly, that same anxiousness would be as responsible for exacerbating the late-morning reaction to headlines (walking back ECB taper talk) that triggered the 10-point surge from a fresh low. So, price action wasn’t predictive.
Some things were accomplished nonetheless. The attraction below at the gap down to Tuesday’s 2143.50 close was neutralized. It’s less likely to attract price down, but also less likely to offer support if retested. Also somewhat of an accomplishment was yet more restrained optimism at resistance around 2156.50. At last an obligatory probe above it becomes increasingly likely.
But there’s not much more that is new. And there isn’t likely to be, not ahead of Friday’s report. We don’t even do preliminary levels in the blog. But we’ll likely have much to plan at the pre-market Tour.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
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))
Two failed attempts to actually reverse deep gaps down — instead of only retracing them — were followed Thursday by a third gap down Thursday. This time without any retracement, while producing the lowest close in a week, and presumably (again) starting the next downleg.
Gold Dec Contract (GC, ETF: (GLD))
Despite Wednesday having held a test of the next lower target at 1166.00, Thursday probed under the next lower objective at 1254.50. Reversing almost any initial weakness back up into positive territory Friday would be vulnerable to a short-squeeze into the weekend.
Silver Dec Contract (SI, ETF: (SLV))
Extending down Thursday next targeted 17.09, which was tested to within 20 cents at the intraday low. No setup is capable of signaling momentum reversing up Friday, not durably, although probing fresh lows early Friday would be extremely vulnerable to a short-squeeze into the weekend.
30-year Treasury Dec Contract (US, ETF: (TLT))
Lower lows Thursday filled the 3-week old gap down to 165-02 that had been filled previously only overnight. That had been sufficient to launch a rally up to 170-04, but the retest would have been more bullish if Friday’s Employment Situation report were greeted from closing Thursday above 165-30.
Crude Oil Nov Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
The rally extended higher Thursday to test 50.50, likely to extend to 51.50 and potentially also to 54.65 so long as pullbacks now hold 49.00.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
Firming overnight to 3.07 didn’t prevent an initially negative knee-jerk reaction to Thursday morning’s EIA report. But its dip to 2.97 was recovered almost entirely back to the overnight high. Pullbacks must hold 3.04 to maintain the rally’s momentum.
Mid-day Update… Another bite at the apple.
Late-morning surge isn’t backing-off. Or extending.
Not immediately rejecting the overnight slide to 2147.50 had made fresh lows likely post-open. A blip-up to 2151.75 quickly resolved down.
Fresh post-open lows down to 2144.50 had created a new opportunity for rejecting sellers. There wasn’t even a blip-up before eventually extending lower to 2143.50.
Quickly rejecting that last low would still be credible for extending up. In fact, the bias environment ended by surging back up to and through the open’s highs. The noon hour quickly printed 2156.75. And then quickly stopped extending.
An extremely narrow 3-point noon hour range has been choppy, but not trending. Still not trending, after an entire timing window has elapsed since a direction-changing surge. A recovery must be obvious this afternoon to avoid another downdraft. Otherwise, the surge was only a correction that refuels the decline.
Look ahead: Economic Calendar – for Fri, Oct 7, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s monthly Employment Situation report is among the most reliable to influence price action. It isn’t often released in a vacuum with no other econ reports nearby, let alone among multiple Fed speakers .
*Employment Situation
8:30 AM ET
*Stanley Fischer Speaks
10:30 AM ET
*Loretta Mester Speaks
12:45 PM ET
*Baker-Hughes Rig Count
1:00 PM ET
*Esther George Speaks
3:00 PM ET
Consumer Credit
3:00 PM ET
Treasury STRIPS
3:00 PM ET
Lael Brainard Speaks
4:00 PM ET