Posts by Rod David
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2052.75 | 2044.50 |
| …would target | 2059.25 | 2051.00 |
| Bias-down: under | 2044.00 | 2035.75 |
| …would target | 2038.75 | 2030.50 |
| Signal status: NO-BIAS, TESTED BIAS-DOWN SIGNAL | 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)
Tuesday afternoon missed two opportunities for rallying out of the range and up to safety. Not that a dip couldn’t have developed, but Tuesday’s range could have served as support to launch a bigger rally.
Now Tuesday’s range can serve the inverse purpose. Rather than offer a safety net below, now bouncing from a break lower would be as difficult to recover. Gapping up above Tuesday afternoon’s 2046.00 high may be the only bullish scenario.
Not that a break lower will try recovering soon. As much time as was spent consolidating Tuesday, the late return to session lows has no reason to delay extending down. The attraction to 2032.50 can restart the decline, next targeting 2021.00-2022.00 and 2009.00.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
Pre-close View… Jumping out of boiling water.
Probing fresh afternoon highs.
We all know the metaphor of a frog being cooked in a pot of water. Without sensing the temperature gradually rising, it’s too late for the frog when the water finally boils.
Today’s trading range has been that pot gradually warming. Its boiling point is reached upon exiting the bias environment at 2:30, and then entering the final hour.
After trending down relentlessly overnight and gapping down sharply, the market frog was quite complacent all day encountering only the occasional bubble. But now it is boiling.
Interestingly, the frog seems to know what may be coming. It’s trying to jump out of the pot, as the bias environment exit was probing above the noon hour’s 2043.25 high — still overlapping it, so not decisively.
Entering the final hour above 2044.50 would suggest the frog has jumped out in time to avoid becoming soup. A surge just touched 2046.00, and just need to hold up into the final hour. Otherwise, reacting down and back into the water would likely sink to the bottom of the pot under 2036.25.
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))
Gapping down was recovered intraday, but not above 1.1435, keeping alive the topping pattern that would be triggered under 1.1345.
Gold Apr Contract (GC, ETF: (GLD))
Gapping up above 1228.00 instead of trending through it reflected impatient optimism while creating a gap back down to Monday’s close and 1224.50. A bigger bounce testing “higher prior lows” near 1250.00 can’t be discounted, but a durable recovery is unlikely on this leg. And back under 1224.50 again would be much less likely to recover.
Silver May Contract (SI, ETF: (SLV))
Attacking the 15.25 bounce limit to within 2-3 cents before Tuesday’s open had plenty of time to extend higher, but did not, leaving in-play the fresh lows targeting 14.70.
30-year Treasury Jun Contract (US, ETF: (TLT))
Monday’s coiling was rewarded by gapping up Tuesday to fresh highs testing 166-16. A dip to “lower prior highs” around 165-00 would help to neutralize their attraction below before extending higher.
Crude Oil May Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Closing even only slightly negative Tuesday is still enough to fulfill Friday’s confirmed breakout that required at least one eventual lower close after Monday. It’s still $1 short of the 34.25 minimum objective, which suggests the decline will extend deeper, potentially also to 31.85.
Natural Gas May Contract (NG, ETF: (UNG, UNL))
Gapping under 1.95 Tuesday would have created a bearish setup from Monday’s pattern. Trending down intraday to test 1.95 instead has filled the gap back to Friday’s close, neutralizing the attraction below. Potential remains alive for resuming the rally so long as 1.92 holds as support.
Look ahead: Economic Calendar – for Wed Apr 6, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday afternoon’s FOMC Minutes comes after Fed Chair Yellen has postured very dovishly, and after that posturing has had a bullish effect on price action.
MBA Mortgage Applications
7:00 AM ET
Gallup U.S. Job Creation Index
8:30 AM ET
*EIA Petroleum Status Report
10:30 AM ET
*FOMC Minutes
2:00 PM ET