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))
Wednesday’s surge had retraced to settle at a test of 1.1470, keeping alive the recovery’s momentum. Surging to a fresh high overnight was retraced again Thursday morning, but left outstanding its opening gap above all prior highs wanting to be retested. And it was retested going into the close, still suggesting momentum remains intact.
Gold Feb Contract (GC, ETF: (GLD))
Wednesday’s post-close FOMC reaction had tested the newly adjusted sell signal, but recovered overnight to probe fresh highs Thursday morning up to 1266.00. Its correction recovered fresh highs attacking 1270.00. The trend remains up so long as 1247.80 now holds as support, next targeting 1284.00 and potentially 1319.50. Triggering the sell signal would likely unfold quickly to the downside.
Silver Mar Contract (SI, ETF: (SLV))
Reacting down to Wednesday’s post-close FOMC had retraced the intraday recovery from 14.71. Its overnight recovery retested the previously outstanding gap back up to 14.83 and its prior tests’ 14.90 highs. Closing back under 14.71 would reverse the trend back down.
30-year Treasury Mar Contract (US, ETF: (TLT))
The confirmed breakout extended higher overnight without delay, probing the rally’s highest levels at 146-00 before dipping back to unchanged around 144-30. A pullback has room down to 144-28 before threatening the uptrend’s momentum, under down to 144-12 before reversing the trend down. Meanwhile, at least an eventual third higher close is required before a trend reversal would be credible.
Crude Oil Feb Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Thursday’s gap down under 47.00 probed fresh trend low under 45.70, closing under the 46.45 prior low and resume the decline’s momentum. The nearest buy signal remains above 48.70.
Natural Gas Jan Contract (NG, ETF: (UNG, UNL))
Firming Thursday back up to 4.83 created potential for blip-up to 4.01-4.11 that stretches the rubber band before snapping back down to fresh lows potentially targeting 3.33. But the session resolved back down toward Wednesday’s lows, still vulnerable to extending down.
Mid-day Update… The first step to bottoming: Stop falling.
Proximity to weekend, and to targets, suggest keeping one eye open.
Holding a test of this morning’s 2492.25 bias-down signal had put into play an offsetting test of its bias-up signal. 
The pre-10:15 2512.00 was never exceeded to confirm. And the 2478.25 bias-down signal was recovered coming out of the bias environment. So, the upside objective became moot.
And the morning’s drop extended down to 2463.25. That’s within 10 points of the decline’s next major objective.
It’s too late to fulfill an objective and then to launch a recovery. Perhaps a corrective rally — especially considering the proximity to this weekend’s illiquidity, which is largely in practice a 4-5 day weekend despite Monday’s shortened session. Has everyone thrown in the towel on the mythical, proverbial Santa rally so that it can finally begin?
Before we can plot out a rally’s targets and trajectory, we need to confirm the decline has ended. And we can’t. The recent excessive optimism warns against viewing bounces prematurely as recoveries. Bearish WedEX scheduled for tomorrow afternoon suggests otherwise, too. But we do want to be aware if the decline is waning, and it just neglected to trigger bias-down.
Look ahead: Economic Calendar – for Fri Dec 21, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: The pre-open high-profile Durable Goods report is also reliably influential to price. And any noticeable reaction to a pre-open report is likely to be duplicated in reaction to post-open reports. At least one post-open report is also both high-profile and reliable for a price reaction. Not that this environment needs it — also being Quadruple Witch expiration — but these add catalysts for volatility.
*Durable Goods Orders
8:30 AM ET
GDP
8:30 AM ET
Corporate Profits
8:30 AM ET
Personal Income and Outlays
10:00 AM ET
*Consumer Sentiment
10:00 AM ET
Kansas City Fed Manufacturing Index
11:00 AM ET
Baker-Hughes Rig Count
1:00 PM ET
Afternoon Bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2479.50 | 2481.00 |
| …would target | 2490.50 | 2492.00 |
| Bias-down: under | 2465.00 | 2466.25 |
| …would target | 2452.00 | 2453.25 |
| Signal status: NO-BIAS, TESTED BOTH BIAS SIGNALS | . | |
| NEW: 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.
Post-open Review… Position of weakness.
Held support, but still testing it.
The potential for Isolation and Globex-Flip setups began fading when the overnight surge to 2518.00 proved excessive. The open was greeted back down at 2494.25, and it extended down another 10 points to 2484.25.
Then a bounce, back up to 2512.00. The 2492.25 bias-down signal was recovered to trigger no-bias, putting into play an offsetting test of the 2524.00 bias-up signal.
But not necessarily in a direct path up. A pullback just retested the 2494.25 open. Being a no-bias environment, there’s room to test the 2492.25 bias-down signal as support. Back above 2507.50 would start to signal the upside objective’s test is underway.
Having said all that, having failed to form a couple of other recovery setups, we can’t be surprised if the no-bias signal environment fails. Probing its bias-down SIGNAL is too late to invalidate the upside objective. Rejecting the no-bias signal now requires exiting this window back under its 2578.25 bias-down TARGET.