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 Dec Contract (EC, ETF: (FXE, UUP))
Still testing the 1.3320 last relative low overnight left little time to delay rallying back up through the 1.1370 buy signal and renew the rally. Its probe through the morning ended the day at 1.1370, still needing to extend higher.
Gold Feb Contract (GC, ETF: (GLD))
Flat-to-lower ranging overnight was recovered intraday, but not reversed, as the pattern continues to hover at its highs without gaining any new traction.
Silver Mar Contract (SI, ETF: (SLV))
Tuesday’s gap up above all prior highs at 14.75 had been retraced intraday to fill the gap back down to Monday’s 14.60 close. Neutralizing its attraction below allowed Wednesday’s open to retest Tuesday’s opening gap, and then trend up intraday. I’m treating this as a breakout, needing a second consecutive higher close to confirm.
30-year Treasury Jan Contract (US, ETF: (TLT))
Momentum remained pointed higher by default, so the overnight retest of the 142-30 pullback limit was likelier to hold than to break lower. It was probed to its room for noise, and can’t tolerate any delay to resuming its rally. Almost any immediate weakness Thursday would be likely to trend down.
Crude Oil Jan Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Wednesday’s reaction to the EIA report was another dip, which further undermines the basing pattern that may yet resolve up, but seems to need fresh buyers from a temporary fresh low to sponsor the recovery.
Natural Gas Jan Contract (NG, ETF: (UNG, UNL))
Tuesday’s reaction down from 4.63 resistance became a test of 4.31 support overnight, which didn’t hold. Thursday’s EIA report is being greeted from a position of weakness.
Mid-day Update… Still uptrending.
PROGRAMMING NOTE: I’M AWAY FROM THE SCREENS BETWEEN 1:30-3:00, AND BACK FOR THE FINAL HOUR…
The minimum likely upside objective is also this afternoon’s 2687.00 bias-up target. And it is being met as the bias timing window is entered. This is still a bias-up environment, but 2687.00 does represent resistance that can force even the most bullish rally to correct.
We’ll see.
This morning’s rally has been a choppy uptrend already, with plenty of overlapping pullbacks forming an ongoing series of higher highs and higher lows. A single corrective dip has room down to 2672.75-2674.00 while still being likely to resolve up.
Resolving up from such a singular dip could be very aggressive, triggering a short-squeeze as a round of hold-outs capitulate to get long. Otherwise, extending a pullback under 2671.00 could fill the open’s gap to either of its proxies, 2658.25 or 2650.50.
Look ahead: Economic Calendar – for Thu Dec 13, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Thursday’s calendar is still pretty thin, albeit the week’s heaviest day. And not for reports, but for the ECB policy statement and Draghi presser, then later for the 30-year auction that is being greeted by a substantial rally.
*ECB policy statement / Draghi Q&A
7:45 AM / 8:30 AM ET
Jobless Claims
8:30 AM ET
Import and Export Prices
8:30 AM ET
EIA Natural Gas Report
10:30 AM ET
4-Week Bill Auction
11:30 AM ET
8-Week Bill Auction
11:30 AM ET
*30-Yr Bond Auction
1:00 PM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET
Afternoon Bias
| WED afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2680.50 | 2681.00 |
| …would target | 2686.50 | 2687.00 |
| Bias-down: under | 2665.25 | 2666.00 |
| …would target | 2657.75 | 2658.50 |
| Signal status: BIAS-UP | . | |
| 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… Deja vu.
Retesting yesterday’s highs.
The overnight rally was punctuated by a pre-open surge up to 2677.00. Just a few ticks under yest4erday’s pre-open high, which we assumed to be pessimism and potentially bullish from a contrarian perspective.
Its post-open reaction down broke under 2666.00 and met its minimum likely target at 2661.50. Then the entire reaction was retraced to touch yesterday’s pre-open high. Touch, and only touch, which is still pessimism and potentially bullish from a contrarian perspective.
Maintaining the upside momentum would keep in-play 2687.00, which is the likely minimum target for having confirmed backing-and-filling to the open. Extending that can be even more rewarding — potentially 2702.50 and 2725.25. Meanwhile, another reaction down is retesting 2666.00, whose break no longer has so much a target as a consequence, that the recovery is failing.