Posts by Rod David
Morning bias
| MON morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2113.00 | 2111.00 |
| …would target | 2118.00 | 2116.00 |
| Bias-down: under | 2103.50 | 2101.50 |
| …would target | 2097.50 | 2095.50 |
| Signal status: LATE BIAS-UP | 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.
Trading Plan for 3/2
If we”re certain of Monday gapping down… then a hold-short through the weekend makes sense, right? Not necessarily. The potential reward has to outweigh the risk, and not just match it. Monday”s potential to gap down aside, the degree wasn”t much greater than the gap up target.
Pattern points… (Setups and technicals)
Despite spending two consecutive days in negative territory, and despite selling gaining traction for two consecutive afternoon, the topping pattern hasn”t yet triggered.
A downleg would be more credible if begun AFTER first retesting the overbought RSIs at Wednesday”s 2117.75 high. At least, a downleg could be more substantial, and not limited to either 2095.50 or 2088.00.
Starting the new week by rallying back to Wednesday”s high is likely to begin by gapping up. Probing lower first would be vulnerable to melting down, but unlikely.
What”s Next… (Outlook and opportunities)
We”ll review the broader market setups and any stock chart analysis requests at this weekend”s Saturday Review. Click here anytime within 30 minutes of its 9:30am ET start.
Friday factor flush?
This morning”s recovery efforts all failed, peaking gradually higher at 2109.50-2111.00. Dropping since the noon hour has probed this morning”s low down to 2102.25.
RSIs diverged positive on the low”s retest, and the 3:10-3:20 timing window didn”t probe any lower. That makes the pattern vulnerable to a late bounce, triggered back above 2105.25.
Even if momentum does try reversing up, note that sellers did already gain traction for their efforts, no differently than yesterday — the bias environment was exited under the noon hour”s low and the final hour was entered lower.
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))
Friday”s gap up couldn”t avoid dipping under Thursday”s low. But the dip was recovered back into positive territory. That is the basis of a bullish “Pivot Reversal” which would reverse the trend up sharply and quickly, if the close were above the morning”s high. It was essentially unchanged.
Gold Apr Contract (GC, ETF: (GLD))
Bouncing back up to Thursday”s upper-end at 1219.00 without first continuing its retracement wasn”t likely to resume the rally attempt, which was already premature. Rallying immediately Monday is unlikely, but it is probably the only way to avoid dipping to 1204.00. and 1197.50, if not also to 1185.00.
Silver May Contract (SI, ETF: (SLV))
Gapping down slightly Friday didn”t extend. But neither did the quick reversal into positive territory, as the balance of the session fluctuated around the 16.55 prior highs.
30-year Treasury Jun Contract (US, ETF: (TLT))
As a corrective bounce target, March”s 146-14/147-00 equates to June”s 162-20/163-04. As a pullback limit, 146-14 equates to 160-02. Regardless, both pullback limits were tested Friday. Whether or not probing any lower first on Monday, the rally can now resume before the close.
Crude Oil Apr Contract (CL, ETF: (USO, UWTI))
Thursday”s breakout under the 49.00-50.50 consolidation. In fact, it gapped up slightly and eventually probed a little higher intraday. That prevented confirming Thursday”s break, while being too shallow to reverse the trend up..
Natural Gas Apr Contract (NG, ETF: (UNG, UNL))
The negative knee-jerk reaction to Thursday”s EIA report spent Friday consolidating. Delaying a recovery suggests the reaction wasn”t so knee-jerk. But that doesn”t make the pattern bearish, and back above 2.77 would trigger a buy signal targeting fresh highs.
Look ahead: Economic Calendar – for Mon Mar 2 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Despite the reaction Friday to the Chicago PMI miss, Monday”s PMI report doesn”t have a track record for influencing price action. But the post-open ISM report does. The construction report does not, but being released simultaneously with ISM would raise its profile.
Personal Income and Outlays
8:30 AM ET
Gallup US Consumer Spending Measure
8:30 AM ET
PMI Manufacturing Index
9:45 AM ET
ISM Mfg Index
10:00 AM ET
Construction Spending
10:00 AM ET
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET