Posts by Rod David
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 1954.50 | 1951.75 |
| …would target | 1960.75 | 1958.00 |
| Bias-down: under | 1944.75 | 1942.00 |
| …would target | 1939.75 | 1937.00 |
| Signal status: noN-BIAS, TESTED BIAS-UP 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)
I always take special notice of similar price action that develops during consecutive timing windows. That’s two-thirds of a pattern, so I want to be prepared for it to repeat. Prepared, and positioned.
Sessions are timing windows, too. So it’s interesting that Thursday’s pattern duplicated Wednesday’s recovery in some key ways. Both mornings were under pressure, recovered by surging above prior relative highs, which was rewarded by rallying into the close.
That’s accumulation. Not basing, which would launch a durable upleg. But accumulation that earns the reward of extending higher.
The two setups differed, too. Wednesday’s recovery developed upon exiting the morning’s bias environment, while Thursday’s surge didn’t develop until entering the afternoon’s bias environment. Thursday morning’s dip held above prior lows and fluctuated around unchanged, while Wednesday’s had ventured out onto the precipice.
Another difference is that Thursday afternoon’s rally fulfilled its minimum upside attraction at 1946.00, and extended to within 1-2 points of its potential to 1952.00-1953.00. Wednesday afternoon’s rally was constrained only by available time, and even then extended through the close.
So, extending higher early Friday is likely, that being the likely resolution to the two-day pattern of intraday recoveries. Maintaining early gains is not at all assured, being so near the next higher objective. Reacting down early from testing 1952.00-1953.00 (or even probing above it) could trend down hard into the close. Not reacting down would more likely trend up into the afternoon.
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))
Relatively narrow ranging Thursday avoided printing a lower low, but also avoided a higher high that could have begun invalidating the ongoing downtrend.
Gold Apr Contract (GC, ETF: (GLD))
Extending Wednesday’s reaction down Thursday morning attacked the original 1222.60 inflection point as support, and bounced to test 1942.00 whose recovery would target a retest of the 1264.00 high.
Silver Apr Contract (SI, ETF: (SLV))
Probing under the 15.15 pullback limit eventually held and reacted back up to 15.15, but not decisively recovering it resume rallying to the 15.70 objective.
30-year Treasury Mar Contract (US, ETF: (TLT))
Extending down a little deeper overnight and Thursday morning was nevertheless recovered to attack 168-00, still targeting 170-00.
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
The 32.40 bounce limit touch produced a reaction down to 31.50. It has so far held, keeping alive potential for the corrective bounce to also touch 32.70 before resuming the decline back to recent lows.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Having failed to produce the third stage of a bottoming pattern that became possible after Monday’s close, Thursday’s EIA report wasn’t greeted from a position of strength. Its gap down under all prior lows extended down even further before recovering back to the open. Gapping up Friday back above 1.82 could form a near-term Island Reversal pattern targeting 2.00.
Mid-day Update… Climbing the wall of what’s the hurry.
Finally probing the open’s highs.
The morning’s bias environment exit was probing a couple of prior relative highs, but not yet recovering the open’s surge. That would have been a more bullish setup.
The afternoon’s 1934.25 bias-up signal was attacked to within 1 tick during the 3 minutes either way of the 1:20 timing window. That would have been more bullish, too.
1934.25 was being pierced at 1:30 to essentially invalidate the no-bias environment. A little more decisively would have been a lot more bullish.
None of which has prevented extending anyway back through the overnight high to touch the 1939.75 bias-up target. If not for the market’s ongoing bullish context, we might not be participating in this afternoon’s move.
Look ahead: Economic Calendar – for Fri Feb 26, 2016
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s GDP is high-profile, but hasn’t much track record for actually influencing price action. The afternoon’s rig count is influential, especially when storage is to capacity.
GDP
8:30 AM ET
International Trade in Goods
8:30 AM ET
Personal Income and Outlays
8:30 AM ET
*Consumer Sentiment
10:00 AM ET
*Jerome Powell Speaks
10:15 AM ET
*Baker-Hughes Rig Count
1:00 PM ET
*Lael Brainard Speaks
1:30 PM ET