Posts by Rod David
Morning Bias
| MON morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2787.50 | 2788.00 |
| …would target | 2795.00 | 2795.50 |
| Bias-down: under | 2774.75 | 2775.00 |
| …would target | 2767.75 | 2768.00 |
| Signal status: BIAS-DOWN, BIAS-DOWN 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)
Friday’s 2793.00 open did what Thursday’s open and close did not. Opening or closing there Thursday could have started reversing the two-week old correction. Delaying its test allowed a position of strength to form at the rally’s highs, to help recover from backing-and-filling.
Which there was. The backing-and-filling could also be considered a pullback, or even downtrending — at least, downtrending within the context of a pullback. Regardless, it would have been done already if the open had held its test of 2793.00. But it didn’t, putting into play 2781.00 and potentially 2764.00.
Both were met (to within 2 ticks). The likely bottom there developed quickly, if not also 2 ticks short of thoroughly fulfilling its downside potential. The bias environment exit reversed up to within 2 points short of the 2793.00 open. Its resistance pushed back down to 2781.00 at the cash session close on the way down to 2776.50.
Two consecutive sessions spent exclusively in negative territory may have ended a corrective dip. Fresh lows immediately Monday could extend down, but the burden of proof would be on sellers. We’ll discuss the possible paths and their likely behaviors this weekend.
Details and other markets coverage are discussed in the post-market Wrap recording here.
JOIN US FOR SATURDAY REVIEW AT 9:30 AM ET.
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))
Wednesday and Thursday’s session-long downtrends had retraced from “higher prior lows” and a gap fill up to 1.1545 to pierce the 1.1400 sell signal. Trending down further Friday confirmed the break, which now requires at least an eventual third lower close. Which would necessarily create a break under the prior Wednesday’s low that Friday’s 1.1350 low was testing.
Gold Dec Contract (GC, ETF: (GLD))
Probing under 1228.00 again Thursday, and to its deepest yet, extended overnight and through Friday morning to attack 1207.00. The next lower attraction in-play is 1201.50, whose break would target 1172.50.
Silver Dec Contract (SI, ETF: (SLV))
Trending down overnight greeted Friday’s open back at the same 14.28 test which had stopped the previous gap down there from extending. But its supportive value was now expended, so the test was likely to extend down intraday, and did, attacking 14.05. Any lower would essentially confirm a much larger downleg underway.
30-year Treasury Dec Contract (US, ETF: (TLT))
Filling the gap intraday back to last Friday’s 137-02 close was recovered intraday to attack the 138-04 buy signal. Also, the inverse correlation with stocks seems to have re-engaged, so triggering the buy signal might require stocks to break lower as a catalyst for a flight-to-safety.
Crude Oil Dec Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Although the 63.22 break’s third lower close requirement was fulfilled already, nothing had signaled the decline ending. Trending down further overnight gapped down and attacked 59.25. The d=session developed exclusively in negative territory, while testing two-month old “lower prior highs” — on the 10th day of lower consecutive prices — making the pattern vulnerable to an up/down-crash setup that either explodes higher or implodes down.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
Thursday night rallied sharply from the week’s multi-session range up to 3.64, despite no interim price correction since the last gap up. Extending to 3.80 now requires a second consecutive higher close to confirm that at least an eventual third higher close is required. That’s difficult between Friday-Monday. A pullback to “lower prior highs” at 3.55 is likelier, if not also down to 3.41.
Mid-day Update… The search continues.
Fresh lows into the afternoon.
Support under this morning’s renewed 2781.00 bias-down target was chipped away to enter the noon hour at 2722.50. 
A slightly lower low and a bounce back up to 2781.00 didn’t ended the decline. Being a Friday, the morning’s bias-down tends to persist through the noon hour anyway.
Now this afternoon has triggered a noN-bias environment. The 2773.50 bias-down signal isn’t required to define the window’s low — in fact, fresh lows are already testing 2770.00. And no requirement to test the 2764.75 bias-down target, although that’s still likely since 2781.00 didn’t hold.
Back above 2778.00 would start to signal a bigger bounce underway, regardless of the outstanding attraction below. And nothing about today’s decline is (yet) suggesting the two-week old correction has ended.
Look ahead: Economic Calendar – for Mon Nov 12, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: No econ reports are scheduled for Veteran’s Day, which falls on Sunday but is observed by banks as a Federal holiday on Monday.
US Holiday: Veterans Day (Observed)