Posts by Rod David
Morning Bias
| MON morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 1967.25 | 1956.25 |
| …would target | 1973.75 | 1962.75 |
| Bias-down: under | 1952.00 | 1941.00 |
| …would target | 1945.00 | 1934.00 |
| Signal status: BIAS-UP, BIAS-UP TARGET MET | 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… Objects in the mirror.
Friday morning’s bias environment rallied sharply, from 1950.50 to 1967.50. At least, price rose 17 points during that single window. It sure looks like trending, when many session (prior to the past several weeks) barely range as widely.
This being expiration, the potential is high for only ranging sideways. Sellers didn’t gain traction — the bias environment exit and final hour’s entry both were within the noon hour’s range. Since the morning’s rally didn’t extend, but was retraced back to the pre-open low, we have to consider whether that was really only a range.
Meanwhile, the bullish WedEX didn’t perform. Not obviously, maybe in secret, a secret it kept very well. Still, it wasn’t for lack of trying — the bias environment exit and final hour entry each were greeted in rally mode… before being overwhelmed. The morning rallied, so WedEX couldn’t be inverted, only invalidated. What better price action to invalidate than the price action since Wednesday.
WedEX can still be influential Monday morning, when it tends to compensate for Friday’s underperformance. There are much more relevant influences than WedEX that are capable of absorbing it, so the alternative to a short-squeeze might be a melt-down. Details were discussed during the post-market Wrap recorded here:
https://roddavid10.mitel-nhwc.com/join/vsxzwvr
Join us for Saturday Review at 9:30am ET. We’ll look at the bigger picture and game out Sunday night / Monday morning strategy, and review any stock charts you request. Check your email Saturday morning for the login instructions.
Daily Spot… Fallout.
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 Sep Contract (EC, ETF: (FXE, UUP))
Fresh highs overnight were retraced by Friday’s reaction down that retraced 61.8% of Thursday’s range, correcting the rally but not reversing back down.
Gold Dec Contract (GC, ETF: (GLD))
Testing the rally’s 1141.50 target to within 20 cents created a reaction down that failed to hold its 1139.20 pullback limit, suggesting the rally’s momentum has now lapsed.
Silver Dec Contract (SI, ETF: (SLV))
Fresh highs Friday morning tested 15.45 before reversing back down under 15.25, and also under the 15.10 pullback limit. Another buy signal must be generated before resuming the rally.
30-year Treasury Dec Contract (US, ETF: (TLT))
Closing above 152-30 Friday had signaled momentum reversing up, and gapping up sharply Friday extended even higher to retest Monday’s prior highs u to 155-24.
Crude Oil Oct Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Not confirming Wednesday’s break higher to 47.70 Thursday was vulnerable to reversing down without delay, which Friday seems to have begun doing by dropping to 42.25.
Natural Gas Oct Contract (NG, ETF: (UNG, UNL))
Recovering back within the channel Thursday didn’t prevent Friday from retesting Thursday’s 2.60 intraday low. It held, but it wasn’t rejected, and must still recover at least 2.68 to signal momentum reversing up.
Mid-day Update… Ex-WedEX.
Is it trending, or just a very wide range?
This morning’s bias environment trended up throughout. It’s difficult enough to generate trending windows on expiration or on Fridays in general. Much more difficult is to reverse them.
So, returning back down to 1950.50 might seem bearish, after its test this morning had rallied to 1967.50. Maybe it’s just noise within a wide price range, and also within the pessimism from yesterday’s action bleeding into an overnight slide that resumed before the open.
Remember that expiration sessions often range sideways. Also, bullish WedEX afternoons often range flat-to-higher.
There’s also a lot of room just for noise. But I’m equally interested in longs. And rallying into today’s close could be very bullish for Monday. That’s not to dismiss the downside vulnerability. There is significant downside vulnerability, making it worth getting whipsawed out of shorts to be exposed in case the bottom drops out.
Look ahead: Economic Calendar – for Mon Sep 21 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Monday’s housing sector report isn’t usually very influential, but might be influential this week since it’s the first report on Monday. The afternoon’s Fed speaker should keep the market active into the noon hour.
*Existing Home Sales
10:00 AM ET
Atlanta Fed Business Inflation Expectations
10:00 AM ET
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET
*Dennis Lockhart Speaks
1:00 PM ET