Posts by Rod David
Market Wrap (recording & summary)
Tuesday’s gap up above Monday afternoon’s 2567.50 high formed a session-long rally setup. Immediately collapsing 34 points to test Monday’s 2550.50 close down to 2547.50 seemed to dash the setup. Interestingly, with the morning’s bias environment being the one exception, all other timing windows probed their prior timing window’s high. So, if that’s considered a successful setup, then Wednesday morning should probe above Tuesday’s highs.
The intraday recovery did recover the open’s 2576.00 gap up. Its attraction would have been left outstanding to inhibit or at least question any interim decline. But now that is neutralized.
Meanwhile, closing above the 2548.00-2555.00 range puts into play 2606.00. Closing back under the range Wednesday would not confirm the higher target, and would also reverse the trend down. Until then, the burden of proof is on sellers.
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))
Monday’s close back above 1.1485 and 1.1500 didn’t follow-through immediately, and instead gapped down Tuesday back under 1.1500 to test 1.1485. Quickly recovering 1.1500 was maintained if not also improved intraday, but can’t tolerate any further delay to rallying aggressively.
Gold Feb Contract (GC, ETF: (GLD))
Dipping further overnight extended Monday’s post-open retracement of its gap up. The 1283.00 sell signal was being tested at the open, and only reacted back up intraday to maintain potential for resuming the rally targeting 1319.50. But remaining in negative territory through the close requires the recovery to become aggressive almost immediately to avoid triggering 1283.00.
Silver Mar Contract (SI, ETF: (SLV))
Fresh pullback lows overnight probed lower intraday Tuesday without either extending down or recovering. Resuming the rally should be obvious by Wednesday afternoon to avoid a deeper pullback.
30-year Treasury Mar Contract (US, ETF: (TLT))
Monday’s gap up to its 147-12/147-167 buy signal had held to reverse the session back down to fresh pullback lows, which extended lower overnight and Tuesday to 146-00. Almost any initial strength Wednesday would be credible for extending higher intraday, even if only to retest 147-12. No immediate strength would be vulnerable to extending the pullback into a steeper deeper decline.
Crude Oil Feb Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Overnight strength had needed to extend higher aggressively Tuesday to compensate for Monday’s failure to confirm Friday’s close above the 47.00 buy signal. Attacking 50.00 Tuesday and trending up throughout the session qualifies as aggressive, but the recovery still cannot tolerate a pullback Wednesday.
Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
Gapping up Tuesday helped to confirm that Monday’s gap down had not gained traction. Closing above 4.15 is still needed to seal a bottom, at least to create a position of strength that offers confidence for absorbing further intraday dips.
Mid-day Update… Last gasp, or gassed-up.
Post-open dip recovers back above prior highs.
Today’s great conundrum has been the open’s clearly defined position of strength failing to defend its session-long rally setup from being invalidated. Gapping up and trending up through the open doesn’t require extending higher immediately, but its reactions down tend to be brief and fully recovered.
This morning’s reaction down was substantial — 34 points from above 2581.00 to under 2548.00 — and not recovered. Not, yet.
This afternoon’s bias-up triggered late, but its target is being probed. The 25-point bounce from this morning’s low is now testing 2572.50. That’s 5 points above yesterday’s 2567.50 high, whose recovery through the open has been the basis for any bullish scenario today.
At least maintaining the recovery from having probed temporarily back into 2548.00-2555.00 would be bullish, but only for not letting sellers gain more traction. The bear market rally would remain intact, next targeting 2606.00. Closing above yesterday’s high would be optimal, but a lot could be said for having absorbed the intraday dip.
Otherwise, another downleg upon exiting this afternoon’s bias environment could be attracted back down to oversold RSIs at this morning’s low. And as late as it would be, another downleg upon exiting this afternoon’s bias environment would be difficult to find sponsorship for a recovery.
Look ahead: Economic Calendar – for Wed Jan 9, 2019
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: The continued government shutdown might not affect any of Wednesday’s econ calendar items. But the afternoon’s FOMC Minutes release should be influential to price action, especially coming in the midst of two Fed speakers. Also Wednesday, the Bank of Canada announces its interest rate policy.
MBA Mortgage Applications
7:00 AM ET
*Raphael Bostic Speaks
8:20 AM ET
*Charles Evans Speaks
9:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
*Rosengren Speaks
11:30 AM ET
10-Yr Note Auction
1:00 PM ET
*FOMC Minutes
2:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2562.50 | 2562.75 |
| …would target | 2569.25 | 2569.50 |
| Bias-down: under | 2550.00 | 2550.50 |
| …would target | 2542.50 | 2543.00 |
| Signal status: LATE BIAS-UP | . | |
| 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.