Posts by Rod David
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))
Having filled two gaps above, the corrective bounce was likely to fail. But gapping down Friday was too abrupt to be credible for being able to extend intraday. The consolidation is now free to resume the decline.
Gold Feb Contract (GC, ETF: (GLD))
Gapping down Friday filled the gap back to Wednesday’s close and its tested 1092.00 “lower prior highs”, which could be probed more deeply while “unfinished business above” remains outstanding.
Silver Mar Contract (SI, ETF: (SLV))
Thursday’s bounce back up to 14.35 resistance was late to begin and not a breakout, making it easier for gapping down Friday back under 14.10. There is no requirement to probe any lower while bottoming.
30-year Treasury Mar Contract (US, ETF: (TLT))
Thursday’s overnight high that was the flight-to-safety’s peak can still be retested up to 156-30 and form a durable top to the recent bounce. All the more so, since Friday’s knee-jerk reaction down to 154-14 after Payrolls was recovered up to 156-16.
Crude Oil Feb Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Another test of 33.55 resistance Friday was retraced back down toward Wednesday’s lows, still likely to probe under 32.00 before a recovery would be credible.
Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
Having probed recent highs intraday Thursday without closing higher, a close above recent highs Friday was required to avoid at least a corrective dip down to 2.14. Friday’s fresh highs up to 2.45 qualified as a breakout.
Mid-day Update… Take a deep breath.
Range narrowing in on unchanged. Bad choice.
This morning’s s drop to 1924.50 fulfilled the offsetting test of its 1927.25 bias-down signal. The offsetting test of its 1921.00 bias-down target remains outstanding.
Reacting up through the bias environment’s exit and into the noon hour tested the morning’s 1942.50 bias-up signal. Its resistance held, as did the afternoon’s 1941.00 bias-up signal.
The afternoon’s 1928.00 bias-down signal wasn’t touched. This is a no-bias environment, and it begins lapsing at the bottom of the hour. Not using that time for rallying away from yesterday’s lows would be vulnerable to resuming the decline when the bias environment lapses.
Probing only slightly into positive territory would be even more bearish, as it reflects last-minute optimism. Shallow optimism before two days of illiquidy doesn’t prevent resuming the decline as the bias environment lapses.
Afternoon Bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 1949.00 | 1941.00 |
| …would target | 1954.25 | 1946.50 |
| Bias-down: under | 1935.75 | 1928.00 |
| …would target | 1929.00 | 1921.00 |
| Signal status: NO-BIAS, TESTED BIAS-UP SIGNAL | FAQ | |
| INTRO VIDEOS #1 and #2 | ||
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.
Post-open Review… Treading water.
Payrolls reaction retraced, but not yet reversed.
The reaction up on Payrolls had attacked 1965.00 before reversing back down to 1944.00. The open’s “last gasp” bounce up to 1953.00 was retraced down to 1935.50 until the 10:15 bias timing window.
Rejecting tests of both the 1942.50 and 1948.00 bias-up parameters by 10:15 has put into play offsetting tests of both the 1927.25 and 1921.00 bias-down parameters.
Confidence could be greater. But only because optimism keeps popping-up. Literally.
- Absorbing the open’s gasp up to 1953.00 was only retraced to its 1944.00 pre-open low, not reversed under it.
- Fresh lows were recovered to test the 1942.50 bias-up signal as resistance at 10:30, almost recovering it in time to invalidate its earlier rejection.
- The pre-10:15 1935.50 still isn’t probed. Exiting the bias environment above prior highs can invalidate the bias signal.
The likelier scenario remains down. Continued optimism can only delay the destiny, at the cost of exacerbating its eventual effects. In that delay is potential for bouncing into the noon hour. Otherwise, fresh post-open lows — especially if probed aggressively — could extend down deeply into the afternoon.
Pre-market Tour (recording & summary)
1951.00 is the most relevant of all resistance levels this morning. Recovering it through the open, or not, could be the difference between rallying or resuming the decline.
That’s where the pre-open Employment Situation report was greeted, after recovering from an interim dip to 1938.00. Its knee-jerk reaction probed momentarily above last night’s 1960.00 highs.
That reaction also dipped back under 1951.00, although not back to 1938.00. Not yet.
Details and other markets coverage are discussed in the pre-market Tour recording here.