Posts by Rod David
Morning Bias
| MON morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2600.50 | 2600.50 |
| …would target | 2607.50 | 2607.50 |
| Bias-down: under | 2583.75 | 2584.25 |
| …would target | 2575.50 | 2576.00 |
| Signal status: LATE BIAS-DOWN SIGNAL, BIAS-DOWN TARGET MET | . | |
| BIAS VIDEOS… INTRO // EXAMPLE | ||
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.
Market Wrap (recording & summary)
Ultimately, Friday’s session offered nothing predictive or insightful to the bigger picture. It was an Inside Day, and almost exclusively developed in negative territory.
The pre-open setup we had anticipated and discussed during the Market Tour did develop, albeit slowly. Waiting so long to break the overnight range proved unable to extend, recovering back into the overnight range.
The morning’s bias-down triggered, but held tests of its 2581.00 target down to 2577.00. The bias-up signal’s resistance broke higher as the bias environment lapsed. But only to briefly fill the gap back Thursday’s 2594.00 futures close by 2 points. Another dip coming out of the noon hour was too late to trigger bias-down. Bouncing from there eventually filled the gap back to Thursday’s 2596.75 cash session close.
Nothing about Friday’s session indicates the uptrend has ended and that 2606.00 can’t be tested soon. By the same token, nothing indicates much momentum to extend through its room for noise up to 2626.00, or to maintain any intraday probe of fresh highs. And being an Inside Day, let alone shallow, gapping down under its afternoon low would be disqualified from forming a reversal setup.
Details and other markets coverage are discussed in the post-market Wrap recording here.
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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 Mar Contract (EC, ETF: (FXE, UUP))
Already having corrected Wednesday’s surge on Thursday, Friday’s open gapped up. But it was soon reversed to fresh pullback lows. While the breakout isn’t confirmed, its reaction down has room to 1.1510 before suggesting Wednesday’s surge won’t be revisited soon.
Gold Feb Contract (GC, ETF: (GLD))
Friday’s Flat-to-higher narrow ranging wasn’t predictive, but also doesn’t confirm any recent selling efforts, which keeps alive near-term potential to resume the rally targeting 1319.50.
Silver Mar Contract (SI, ETF: (SLV))
Fluctuating narrowly around unchanged Friday was still just under recent highs that have yet to be rejected, suggesting at least some probe of fresh highs is coming.
30-year Treasury Mar Contract (US, ETF: (TLT))
Holding the 145-08 pullback limit allowed bouncing to test the 146-04 buy signal, which was tested Friday morning. Tested, and held, as did Monday’s test of its 147-12 buy signal. Recovering 146-04 Monday would target 147-12, whether as only a temporary corrective bounce or to resume the rally. Closing under 145-08 would launch a more substantial decline.
Crude Oil Feb Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Already having retraced 61.8% of the prior consolidation’s range, fresh highs overnight testing 53.30 couldn’t afford to hesitate extending. But the open was met in negative territory and soon tested 51.20, with room to test 51.00 before signaling a deeper reaction down underway.
Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
After absorbing Thursday’s EIA report, Friday flat-to-higher ranging suggests that sellers are reducing their pressure. Another nickel higher to close above 3.15 would start to seal a bottom.
Mid-day Update… Done day?
Early sellers failed, and now also so have buyers.
Fridays are difficult to start trending, and difficult to stop trending once it starts. Trending attempts must start early, and early attempts that fail tend to be the session’s last opportunity to trend in that direction.
Today’s gap down to 2584.00 probed lower to 2577.00, bouncing to 2585.00 and 2588.00 resistance — yesterday’s last relative low and this morning’s bias-down signal, respectively. Both were still being tested as the bias environment lapsed. Still being tested, not already recovered.
Which leaves the door open for another downleg.
Recovering through the noon hour touched 2596.00, within 3 ticks of yesterday’s cash session close. Its recovery could be firming and rallying through the afternoon. Except that its reaction failed to trigger the 2594.50 bias-up signal.
The 2586.50 bias-down signal was tested, but too late to invalidate the afternoon’s no-bias. The pattern will remain vulnerable to extending down, unless the bias environment probes positive territory.
Look ahead: Economic Calendar – for Mon Jan 14, 2019
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Monday’s econ calendar was empty even before the government shutdown. But it’s unusual anyway for a regular trading session.
no reports scheduled