Posts by Rod David
Market Wrap (recording & summary)
Differences aside, Monday and Tuesday’s similarities include both a large optimistic presence, and an a large slide through the afternoon. Monday’s optimism was the rally that followed its opening plunge, but Tuesday’s optimism was the three shallower rallies that each retraced to unchanged. Declining through the afternoon was much more persistent Monday, extending through the position-squaring window. Tuesday’s afternoon drop ended with the final hour.
Notice how time shifted forward on Tuesday. That has some interesting effects.
Monday’s late low is what enabled the Tuesday’s overnight and intraday optimism. But Tuesday’s late bounce has already used its optimism, recovering 31 points of the 45-point point slide. In fact, already exploiting that optimism is what enabled a 26-point slide through the close.
What typically comes next after timing window behavior shifting forward? Legs accelerating their trends. Tuesday’s low fulfilled its objective of probing under Monday’s low, attacking the outstanding 2530.00 target to within 1 point. That’s close enough not to become “unfinished business,” but only if Wednesday’s open is greeted at Tuesday’s late 2562.50 high and higher. The trend otherwise remains down, and vulnerable to accelerating.
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))
A second consecutive higher close Tuesday, preferably above 1.1470, would confirm the basing pattern was launching a rally. Probing above 1.1470 overnight wasn’t repeated intraday, but the higher close held, so any early strength Wednesday would be credible for trending higher.
Gold Feb Contract (GC, ETF: (GLD))
Holding the intraday test of 1237.00-1240.00 was likely to retest the range’s 1255.00 upper-end, which was done overnight. Tuesday’s intraday range hovered under resistance, now able to launch a downleg under 1240.00 alone.
Silver Mar Contract (SI, ETF: (SLV))
Tuesday’s probe above 14.71 didn’t extend into a rally, while an attraction to the gap outstanding at 14.83 hasn’t been rejected.
30-year Treasury Mar Contract (US, ETF: (TLT))
Hovering at the 143-08 buy signal Monday resolved up aggressively. A surge to 143-22 was retraced entirely back down to 143-08 where a gap had formed, which launched a bigger bounce up to 144-00. A second consecutive higher close Wednesday would confirm a bigger rally leg underway. Meanwhile, Wednesday’s FOMC policy statement is being greeted from a position of strength.
Crude Oil Jan Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
The ongoing basing pattern was already more than one week overdue to launching a rally without having to break lower first. Tuesday’s flash crashes under 50.00 attacking 46.00 more than compensate for the delay — while also making a near-term recovery unlikely. But bounces have room up to 48.55 if the breakout won’t be confirmed.
Natural Gas Jan Contract (NG, ETF: (UNG, UNL))
Tuesday’s bounce up to Friday’s 3.81 close only neutralized the attraction back to its gap, while creating a new one below at Monday’s close, and still allows room down to 3.33 while forming a bottom.
Mid-day Update… Optimism bubbles popping.
Three distinct rally efforts, each retraced.
Last night’s initial bounce up to 2569.00 was retraced to unchanged. 
Another overnight bounce extended through the open to attack 2578.00. It was retraced, too. Now the noon hour’s bounce up to 2576.00 has been retraced — largely, not entirely.
The post-open bounce’s retracement filled the open’s gap, which suggested wide-ranging sideways choppiness would develop. No further down, no new rally, just a wide range. Which the noon hour’s bounce fulfilled.
The last bounce also tested both afternoon bias-up parameters. They were rejected by triggering late no-bias. The setup’s likely test of this afternoon’s 2558.00 bias-down signal is being met now, and probed down to 2554.00.
Extending down further is possible, but more appropriate after the bias environment comes within view of lapsing, when it could more easily start the ball rolling (slowly) toward a late-afternoon decline. The decline could resume today, although it won’t be very easy on the afternoon ahead of tomorrow’s FOMC policy statement.
Look ahead: Economic Calendar – for Wed Dec 19, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: FOMC policy statements long ago replaced monthly payrolls as the catalyst for the most volatile and opportunity-rich windows. That is only exceeded by the quarterly Fed Chair Q&A, which can offer multiple swings, or else sustained trending.
MBA Mortgage Applications
7:00 AM ET
Current Account
8:30 AM ET
Existing Home Sales
10:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
*FOMC Meeting Announcement
2:00 PM ET
FOMC Forecasts
2:00 PM ET
*Fed Chair Press Conference
2:30 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2565.50 | 2569.00 |
| …would target | 2571.00 | 2574.50 |
| Bias-down: under | 2554.50 | 2558.00 |
| …would target | 2548.25 | 2551.75 |
| Signal status: LATE NO-BIAS, TESTED BOTH BIAS-UP PARAMETERS | . | |
| 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.