Posts by Rod David
Market Wrap (recording & summary)
Tuesday’s 2654.00 opening print gapped down 17 points from Friday’s close. The opening 15 minutes of volatility ranged flat-to-lower. Only then did sellers finally do what they’d only threatened since Sunday night’s open — actually touching Friday’s 2649.00 low. The relentless overnight slide didn’t find reinforcements immediately, but they arrived before a bounce could develop, which sufficed.
Meanwhile, opening back under 2656.00 allowed a close under 2656.00 to reject Friday’s close above 2656.00, and the rally’s next higher objective. This doesn’t itself reverse the trend down, so much as it opens the door to a reversal signal. Which is formed by Tuesday’s sudden, steep and substantial reversal from the prior session’s fresh recovery high. It’s not the intraday reversal we’ve been anticipating, but it qualifies.
The reversal still needs to be confirmed by a second consecutive lower close on Wednesday. That could be helped by extending to the next lower target at 2605.00 which was left outstanding by Tuesday’s 2616.50 low. But that’s still 25 points short of a lower low to signal a new downtrend underway. Bouncing first on Wednesday could test 2656.00-2666.00 before suggesting that Tuesday’s drop was only a detour.
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 Mar Contract (EC, ETF: (FXE, UUP))
The ongoing decline extended through the holiday weekend to open Tuesday at 1.1400 prior lows. quick bouncing back to unchanged around 1.1420 didn’t improve any further. A buy signal can be lowered to 1.1455.
Gold Feb Contract (GC, ETF: (GLD))
Dipping to test the 1283.00 sell signal through Friday’s close had probed lower Sunday night but recovered to still test 1283.00 Tuesday. Its recover through the close would trap the interim shorts and help to fuel a steep recovery.
Silver Mar Contract (SI, ETF: (SLV))
Fresh lows coming out of the weekend had probed at least 20 cents under 15.40. Tuesday’s open had recovered to test it, and its recovery through the close would signal a bigger bounce underway.
30-year Treasury Mar Contract (US, ETF: (TLT))
Tuesday’s gap up tested the 145-08 sell signal that had finally broken lower Friday by 1 point. Initially reacting down from 145-08 and recovering to probe it was still overlapping it into the afternoon. Its recovery through the close could invalidate Friday’s break, which otherwise remains intact.
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Friday’s break above a multi-session range around 52.35-53.40 had formed a breakout. Probing even higher to 54.75 overnight was rejected into Tuesday’s open, which extended down intraday to test 52.35. The breakout wasn’t confirmed, but it did leave outstanding the gap back to its close that could inhibit a reversal and attempt another breakout.
Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
Gapping down Sunday night from Friday’s 3.42 close had extended lower to attack Friday’s 3.20 low. Tuesday’s open broke that on the way down to “lower prior highs” attacking 3.05, which is the last opportunity for a bottom to form that could retrace recent highs.
Mid-day Update… Key support test.
Has the drop gotten ahead of itself?
Even the first break from this morning’s opening 15 minutes of volatility was still within Friday’s range. But its 2647.00 lower-end soon broke, and has extended down. This afternoon’s bias environment is being greeted at 2623.25.
That’s a test of “lower prior highs” at 2625.00 from last Wednesday and Thursday. Having expended so much energy to test a relevant level, holding its test through a relevant level can define a near-term low. Already, a bounce is testing 2632.50. The bias-down environment could also test its 2638.50 bias-down signal without yet suggesting a bigger recovery underway.
Oversold RSIs at the low will require an eventual retest. Probing only slightly lower fresh lows would be tolerated by any pattern trying to form a durable low. There’s otherwise risk that the low’s retest will facilitate a new downleg next targeting 2605.00.
Look ahead: Economic Calendar – for Wed Jan 23, 2019
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday’s reports are staggered through the morning, but none is either high-profile or reliably influential to price action.
MBA Mortgage Applications
7:00 AM ET
FHFA House Price Index
9:00 AM ET
Richmond Fed Manufacturing Index
10:00 AM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2648.75 | 2649.00 |
| …would target | 2655.75 | 2656.00 |
| Bias-down: under | 2638.25 | 2638.50 |
| …would target | 2629.00 | 2629.25 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET EXCEEDED | . | |
| 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.