Posts by Rod David
Morning Bias
| MON morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2419.50 | 2421.00 |
| …would target | 2429.50 | 2431.00 |
| Bias-down: under | 2403.50 | 2405.00 |
| …would target | 2396.75 | 2398.25 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET EXCEEDED | . | |
| NEW: BIAS VIDEOS… INTRO // EXAMPLE | ||
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.
Market Wrap (recording & summary)
A very narrow overnight range had dipped only slightly down to 2467.00 before Friday’s open. And only briefly, quickly bouncing back to earlier overnight highs testing 2492.00. 
The range persisted through the open, until optimistic headlines from a Fed speaker triggered a surge to 2508.00. Surges have been serving only one purpose, to stretch the rubber band so it could snap back down. It eventually snapped down to new lows at 2409.25.
The bearish WedEX’s afternoon influence is likely to repeat on Monday morning. Except for the impending weekend’s illiquidity, a hold-short was compelling. Evaporating liquidity ahead of a 3-1/2 day weekend also makes the setup less compelling, as one gentle upward push could trend higher through Monday’s early close.
Meanwhile, the bigger picture continues to unfold, whatever its scapegoats. Notice the accompanying chart. We began focusing on the bearish topping pattern long before tariffs and government shut-down were whispers, let alone headlines. The decline’s real culprits are the massively extended levels of many high-profile stocks long before they hit their highs. They were widely owned, by funds run by really smart inexperienced managers (i.e. theorists). How did the decline not begin earlier, and how is it not down more?
Be aware that a near-term low can appear at any time. Also be aware that a near-term low can be under Friday’s close by triple digits. And finally, be aware that none of that will happen during the next two days. Take advantage of the pause… chaRTroom will re-open Sunday night at 6:00 pm ET.
Details and other markets coverage are discussed in the post-market Wrap recording here.
THERE IS NO SATURDAY REVIEW THIS WEEKEND.
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))
Thursday’s rally high attracted no new sponsorship, allowing Friday’s gap down to extend lower and fill the gap back to Tuesday’s 1.1450 close.
Gold Feb Contract (GC, ETF: (GLD))
.Gapping down Friday back under Thursday morning’s high extended lower until filling the gap back down to Wednesday’s 1257.00 close. Resuming the rally Monday would be appropriate.
Silver Mar Contract (SI, ETF: (SLV))
Filling the gap Thursday back up to the 14.83 area had not gained traction before dipping again into Friday afternoon. Closing lower on Monday would be credible for reversing the trend down.
30-year Treasury Mar Contract (US, ETF: (TLT))
A shallow overnight pullback nevertheless recovered to open unchanged Friday, but still resolved down under the 144-28 pullback limit. Back above 145-04 would resume the rally, to produce its requires eventual third higher close.
Crude Oil Feb Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Gapping down to fresh low Friday recovered into positive territory, but only to fluctuate narrowly around unchanged. Simply by not extending the rally, closing back above 47.00 can signal a substantial bounce underway.
Natural Gas Jan Contract (NG, ETF: (UNG, UNL))
Recent lows may be forming an Ascending Triangle, after all, as Friday bounced back up to the pattern’s 3.83 resistance and created another higher low in the interim. A break higher would likely be aggressive, but short-lived, reversing down to fresh lows from a test of 4.11.
Mid-day Update… Another shoe?
The market is behaving quite anxiously.
Optimism seems to have been sucked entirely out of the market. The post-open surge had stretched the rubber band, 
only to snap back down. Hard. The morning’s 48-point drop from 2508.00 to 2460.50 was retraced by 38.2% up to 2480.50. Its reaction fell 45 points to the noon hour’s 2435.25 low. A 61.8% bounce attacking 2460.00 has dipped back down to hover at 2442.00.
Exceeding this afternoon’s bias-down target through 1:20 has renewed the bias-down signal, effectively targeting 2432.25. Also, the bearish WedEX influence has begun.
Currently, the 2460.00 bounce’s reaction down to 2442.00 has grown eerily silent. Again. Stability at this stage of this pattern is not to be confused as strength. A fresh afternoon high could rally again, but there’s nothing accumulative about the pattern.
Look ahead: Economic Calendar – for Mon Dec 24, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: It’s Christmas Eve, so markets close early. That significantly impacts volume, which is already suppressed by being a half-day between 3 other closed sessions. Trending is difficult to start, and also difficult to stop if started.
Chicago Fed National Activity Index
8:30 AM ET
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET
2-Yr Note Auction
1:00 PM ET