Posts by Rod David
Morning Bias
| MON morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2061.50 | 2065.25 |
| …would target | 2079.25 | 2073.00 |
| Bias-down: under | 2060.75 | 2054.50 |
| …would target | 2053.50 | 2047.25 |
| Signal status: LATE BIAS-UP | 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)
The week was greeted at 2086.00, and largely fluctuated around 2086.00, until Thursday afternoon’s bias environment began lapsing at 2086.00, and then the bottom dropped out.
Price action trended down only until Friday’s morning’s bias environment began lapsing. The afternoon bias environment’s retest was recovered before lapsing. And the final hour’s entry missed an opportunity to regain control. Strong-handed sponsorship would usually exploit that setup.
So, I’m already suspicious of the decline’s sponsorship being strong-handed. Now add to it that the bias environment’s high was recovered through the close, despite not already recovered into the final hour. The first development tends to prevent the other.
Closing above what had been “lower prior highs” at 2056.00 helps to undermine sellers. As does leaving no “unfinished business below” outstanding. But it was too late for buyers to gain traction, having exited the bias environment and entered the final hour within the noon hour’s range.
Details and other markets coverage are discussed in the post-market Wrap recording here.
The link to this weekend’s Saturday Review will be emailed overnight.
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 Jun Contract (EC, ETF: (FXE, UUP))
Friday immediately exploited Thursday’s close above 1.1355 by gapping up to prior resistance at 1.1415 and trending up from there to probe prior highs up to 1.1475. Back under 1.1415 at any time would trigger a new downleg targeting fresh lows.
Gold Jun Contract (GC, ETF: (GLD))
Trending higher overnight extended Thursday’s rally to sharply higher highs, probing 1286.00 resistance whose recovery through the close would target 1312.00.
Silver Jul Contract (SI, ETF: (SLV))
Gapping up Friday and trending higher intraday reinstates the rally’s momentum that is ultimately targeting 18.80. Having formed an Island, gapping down Monday back under 17.55 would create a detour back down first.
30-year Treasury Jun Contract (US, ETF: (TLT))
Gapping down Friday was recovered into positive territory after Thursday had confirmed Wednesday’s breakout. Although at least an eventual higher close is now required — and an upleg triggered above 163-00 would target 165-00 — a detour can still fill the gap back down to 161-04 if not also briefly probe a fresh low under 161-.
Crude Oil Jun Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Initially firming to test 46.75 was reversed intraday into negative territory, leaving outstanding at least one more eventual higher close before a reversal down would be credible from any higher than 43.10.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
The overnight blip-down was retraced enough to open flat Friday, in a four-day setup that was unlikely to close lower. In fact, the session surged to attack 2.22 within a few cents, whose recovery would trigger a new upleg.
Mid-day Update… Step-by-step.
Bounce is recovering resistance.
The first step to forming a bottom is to stop falling. The second step is to consolidate. Only then can an upleg launch. And without an upleg, the consolidation can still only a continuation pattern.
So, it’s interesting that this morning’s drop to 2046.00 has crept up gradually to test what had been 2056.00 lower prior highs. And it’s interesting that the 2055.25 bias-up signal is now being tested (invoking the grace period).
Triggering bias-up would suggest the pullback had ended and that momentum is reversing up. No upside potential can be highly confident in negative territory. The decline would resume back under 2053.25.
Two landmarks above are 2061.00 and 2063.50, whose recoveries coming out of the bias environment would help to confirm momentum still reversing up. Otherwise, there’s no bullish reason to retest the lows, whose RSIs are not oversold.
Look ahead: Economic Calendar – for Mon May 2, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: The econ calendar is often sleepy on Mondays, but not this week. A pre-open Fed speaker is followed by post-open reports with track records for influencing price action.
Gallup US Consumer Spending Measure
8:30 AM ET
*Dennis Lockhart Speaks
8:50 AM ET
*PMI Manufacturing Index
9:45 AM ET
*ISM Mfg Index
10:00 AM ET
Construction Spending
10:00 AM ET
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET