Posts by Rod David
Wednesday”s post-close Market Wrap covered
Wednesday”s post-close Market Wrap covered quite a bit in a short time. Very efficient, very concise, very comprehensive. So, of course, the recording”s turnaround was delayed. So, it all averages out:
https://roddavid10.mitel-nhwc.com/join/mjvkfyt
Morning bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2103.25 | 2099.75 |
| …would target | 2110.50 | 2107.25 |
| Bias-down: under | 2094.00 | 2090.75 |
| …would target | 3089.25 | 2085.75 |
| Signal status: NO-BIAS, TESTED BIAS-DOWN SIGNAL | 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 2/19
If FOMC Minutes can”t produce more than a surge and retest… then Wednesday”s “inside day” can”t be very predictive. But it can be contrary, and it can suggest that initial trending out of Wednesday”s range will only be reversed. Probably not immediately, but nor after very long.
Pattern points… (Setups and technicals)
It took awhile. Forever, from some perspectives. But Wednesday”s opening drop finally recovered to prove it was only temporary.
Overnight selling had been contained to Tuesday”s late pullback low. The extra dip before the open defined the range that persisted until the afternoon”s FOMC Minutes. The initially favorable knee-jerk reaction was retraced entirely, but only back to its origin. And then the initial favorable reaction was recovered.
Price action within so narrow a range as Wednesday morning is very frustrating to try trading it. But the bigger picture expectations — that the late extra dip would not extend — kept the focus on buy signals and upward resolutions.
Now the question is whether the afternoon”s fresh session highs fully rewarded Wednesday morning”s buyers for absorbing the probe into negative territory. They didn”t gain traction for their efforts, according to the bias environment exit and the final hour entry. And they only attacked Tuesday”s prior highs.
What”s Next… (Outlook and opportunities)
Wednesday”s last hour hovered pessimistically short of touching Tuesday”s highs. This is potentially bullish from a contrarian perspective, and it suggests fresh highs will be probed — probably Thursday and probably not by a little. But the hesitation is otherwise similar to Tuesday afternoon”s failed probe of fresh highs, which suggests that the next probe of fresh highs will be living on borrowed time.
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))
Wednesday”s reaction down from having recovered up to 1.1425 was itself recovered back, Not quite back up to 1.1425, but into Tuesday”s range that was testing it. Not extending higher aggressively Wednesday morning would start to be bearish.
Gold Apr Contract (GC, ETF: (GLD))
Lower lows Wednesday tested 1200.00, and the second consecutive lower close confirmed Tuesday”s deep breakout. The 1185.00-1195.00 target remains intact — best singularly represented as 1191.50 — so long as bounces now hold 1216.00 as resistance.
Silver Mar Contract (SI, ETF: (SLV))
Wednesday”s gap up only tested Tuesday afternoon”s highs before reversing back down to Tuesday”s lows. Tuesday”s breakout wasn”t confirmed by a second consecutive lower close, but buyers didn”t gain any traction for their efforts.
30-year Treasury Mar Contract (US, ETF: (TLT))
Wednesday”s reaction to FOMC Minutes extended the morning”s firming from Tuesday”s fresh low at 143-30, and tested the 144-30 bounce limit. Its recovery introduces potential up to 146-14 or 147-00, even if only as a temporary corrective bounce.
Crude Oil Mar Contract (CL, ETF: (USO, UWTI))
Another reaction down Wednesday from testing 54.00 is assumed to be only temporary since there was no bearish reason for Tuesday”s third test of 54.00 resistance.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Tuesday”s dip to the original 2.70 buy signal was recovered Wednesday to test Tuesday”s gap up to 2.85, helping to confirm the uptrend remains intact.
What other shoe? Still waiting for the first to drop.
Ineffectual pessimism is entering its third timing window.
Gapping down to 2092.00 didn”t extend down. Probes under it were recovered. But recoveries didn”t extend, and 2092.00 continues to be probed.
Each timing window has offered an opportunity to leave that pessimism behind. Not already rallying out of the morning”s bias environment made a recovery unlikely before the FOMC Minutes, since the time in between usually consolidates.
So, here we are. Still ranging around the 2092.00 opening print, ranging sideways in negative territory. The “ineffectual pessimism” is potentially bullish from a contrarian perspective. At least, for an initially favorable reaction.
But while rallying out of the FOMC Minutes is possible, it would be difficult to maintain if the news were greeted from within this morning”s range. Ranging sideways in negative territory does seem to be preparing for a more substantial move, but maintaining it or extending it can”t be assured.