Posts by Rod David
Market Wrap (recording & summary)
Sunday night’s gap down had extended to a 23-26 point probe of negative territory, half of that under Thu-Fri’s lows.
Eventually recovering it all for a pre-open probe of positive territory up to 2645.00 still reacted down in time to greet the open slightly negative. And soon, greatly negative. The morning’s 2583.00 low probed 20 points under October’s 2603.00 prior low.
Oversold RSIs left outstanding at the low didn’t prevent the balance of the session from reversing back up. The 2645.00 pre-open high was probed by 3-4 points before the close, and positive territory held its recovery. The close maintained the afternoon’s trending series of higher highs and higher lows.
Monday’s likeliest template was binary. Either the decline would resume, or another bounce would begin. A probe under October’s low was likely, regardless of its resolution. So, apart from the new unfinished business below needing to retest the low’s oversold RSIs, a bottom may be forming.
But one very important condition has yet to be met — closing back above a prior high. Even recovering a prior high through an entire timing window. Friday’s 2652.00 prior high was only attacked. Meanwhile, exiting Tuesday’s open under Monday afternoon’s 2615.00 low could form a “session-long decline” setup. That would incidentally invalidate Monday’s recovery, and probably also end the week sharply lower.
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 Dec Contract (EC, ETF: (FXE, UUP))
Thursday’s confirmed breakout had extended to only slightly higher fresh highs Sunday night at 1.1450. But Monday’s reversal dipped back down to the 1.1370 buy signal. Immediate strength Tuesday would be credible for resuming the rally at an accelerated pace to compensate for the detour.
Gold Feb Contract (GC, ETF: (GLD))
Friday’s fresh high close wasn’t confirmed by a second consecutive higher close on Monday, which instead fluctuated narrowly in negative territory. The “ineffectual pessimism” would still be credible for extending higher, but much less so if Tuesday morning had not already resolved up.
Silver Mar Contract (SI, ETF: (SLV))
Still testing the 14.65 buy signal Monday requires that Tuesday extend higher with no further delay to avoid at least a deeper pullback, if not also reversing the trend back down.
30-year Treasury Jan Contract (US, ETF: (TLT))
Friday’s payrolls report was greeted from a position of strength, despite Thursday’s fresh high close having fulfilled the confirmed breakout’s minimum objective. Friday’s initial dip was recovered into positive territory, and extended Monday to probe Thursday’s high by nearly a quarter-point attacking 144-00. The rally’s momentum remains intact so long as pullbacks now hold 143-30 as support.
Crude Oil Jan Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
The bottoming pattern had tried again to prematurely resolve by gapping up Friday. Monday’s opening dip corrected the excessive optimism, while also testing the 52.15 buy signal whose recovery through the close maintains the bottoming pattern. The pattern’s timing won’t tolerate much further delay in launching a rally.
Natural Gas Jan Contract (NG, ETF: (UNG, UNL))
Friday’s recovery back above 4.44 extended Monday to test 4.63, which would confirm the consolidation had resolved to launch a new rally leg targeting above 5.00.
Mid-day Update… Hope springs, or quick sand?
Clinging again to Friday’s lows.
This morning’s 2583.00 low qualifies as a retest of Oct’s 2603.00 low. Oversold RSIs at this morning’s low will want to be retested, as they did at the prior low. That took two months, and might take awhile this time, too — if the afternoon bias environment can extend the noon hour bounce.
Otherwise, this morning’s lows can be broken this afternoon, and probed through tomorrow morning.
This morning’s last downleg had aggressively entered and exited a Falling Wedge. And now the wedge has been retraced, attacking the origin of this morning’s last downleg. The bounce can extend higher through the bias environment, and potentially form a bigger bottom. Otherwise, not extending higher through the bias environment would make the noon hour bounce only a temporary correction.
Look ahead: Economic Calendar – for Tue Dec 11, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Tuesday’s PPI is both high-profile and reliable for influencing price action. But there is no post-open report to duplicate the pre-open report’s reaction.
NFIB Small Business Optimism Index
6:00 AM ET
*PPI-FD
8:30 AM ET
Redbook
8:55 AM ET
3-Yr Note Auction
1:00 PM ET
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2619.25 | 2620.75 |
| …would target | 2632.75 | 2634.25 |
| Bias-down: under | 2591.50 | 2593.00 |
| …would target | 2580.50 | 2582.00 |
| Signal status: noN-BIAS, BIAS-UP SIGNAL | . | |
| 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.