Posts by Rod David
Morning Bias
| MON morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2763.75 | 2764.25 |
| …would target | 2772.50 | 2773.00 |
| Bias-down: under | 2750.25 | 2750.75 |
| …would target | 2741.25 | 2741.75 |
| Signal status: BIAS-UP, BIAS-UP TARGET EXCEEDED | . | |
| NEW: BIAS VIDEOS… INTRO // EXAMPLE | ||
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.
Market Wrap (recording & summary)
Absorbing multiple dips Friday morning had at least indicated sellers weren’t gaining traction for their efforts. And there had been many. The failed dips also established that Thursday afternoon sellers gained no traction for their efforts. But the minimum reward or consequence was to retest Thursday’s high.
And that was done Friday afternoon. Without being rejected.
Two no-bias environments could hardly wait to probe their bias-up signals. The behavior wasn’t so optimistic as to be bearish from a contrarian perspective. But it does suggest the rally is credible for extending higher.
Closing above Thursday’s high has put into play the next higher objective at 2768.00-2770.00. There’s no timing or other requirement to meeting it, so reacting down Monday can’t be discounted — especially following a weekend of headlines from the G-20 meeting.
Details and other markets coverage are discussed in the post-market Wrap recording here.
NO SATURDAY REVIEW THIS WEEKEND.
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))
Hovering an extra day at 1.1400 resistance had created a position of strength to better enable absorbing a reaction down to 1.1330. Its test Friday as support would be bullish if a reaction closes back above 1.1370.
Gold Feb Contract (GC, ETF: (GLD))
[Rolling coverage forward to Feb which trades at a 6.70 premium to Dec]… Wednesday afternoon’s surge in reaction to the Fed Chair’s comments was never confirmed by a higher close, and now it has been retraced entirely. The 1226.30 sell signal is still being tested Friday afternoon, but momentum should reverse down sharply if confirmed Monday.
Silver Mar Contract (SI, ETF: (SLV))
[Rolling coverage forward to Mar which trades at a 13-cent premium to Dec]… Wednesday afternoon’s surge in reaction to the Fed Chair’s comments was retraced entirely overnight and extended to fresh lows Friday. Gaps are left outstanding above, but the pattern’s distributive features remain intact.
30-year Treasury Dec Contract (US, ETF: (TLT))
Thursday’s fresh high had retraced intraday to fill the gap back to Wednesday’s close, neutralizing its attraction below. Already trending back up overnight held Friday within Thursday’s intraday range, but did not touch Wednesday’s overnight high. This pessimism can be bullish from a contrarian perspective.
Crude Oil Jan Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
More aggressive selling was absorbed at Friday’s gap down to its lowest intraday levels — albeit still just above Wednesday’s overnight low. That bit of optimism aside, all other price action has been consistent to forming a bottom.
Natural Gas Jan Contract (NG, ETF: (UNG, UNL))
Friday’s ranging between 4.44-4.63 remains likely to break the range’s upper-end and resume the rally targeting a probe above 5.00.
Mid-day Update… Sellers marginalized?
Two-three dips have resolved up.
The overnight dip to 2729.00 held the morning’s bias-down target and reacted up to 2741.00 before the open. The post-open dip to 2733.00 avoided triggering bias-down and was reversed up to 2748.50. Its reaction back down to 2736.00 bounced to test 2745.00.
Sellers tried, tried, and tried again. And got nothing for their efforts.
Now the noon hour’s attack on 2737.00 is also reacting up, so far to within 2 ticks of the morning’s 2748.50 high. This isn’t a trending session, but it is a Friday afternoon, when new sponsorship isn’t likely to overcome what current sponsorship has established. And current sponsorship has established that sellers keep trapping themselves.
Not having trended yet today, trending is still possible. This afternoon’s no-bias environment will inhibit trending above its 2745.75 bias-up signal (now being tested) — that would require being retraced, or extending higher could simply be slow-played or delayed until the bias environment begins lapsing. Meanwhile, there’s room to 2739.00 before suggesting that sellers aren’t actually marginalized for the day.
Look ahead: Economic Calendar – for Mon Dec 3, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Monday’s pre-open Fed speaker probably won’t have any surprises since he also spoke before Friday’s open. Another is scheduled for mid-morning. Three post-open reports should be very influential, especially the two that have a track record.
*John Williams Speaks
9:15 AM ET
*PMI Manufacturing Index
9:45 AM ET
*ISM Mfg Index
10:00 AM ET
Construction Spending
10:00 AM ET
*Lael Brainard Speaks
10:30 AM ET