Posts by Rod David
Morning bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2099.50 | 2095.75 |
| …would target | 2104.75 | 2101.00 |
| Bias-down: under | 2091.25 | 2087.50 |
| …would target | 2083.00 | 2079.25 |
| 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 2/17
If not for this being a three-day weekend… then would a hold-long have been considered.? No. Not even a day other than Friday. The upside target was being tested when the cash session close was within 3 minutes. Exceeding it came later. If anything, a hold-short would have been interesting — in fact, the close”s extension up has been retraced already. But this IS the weekend, and Friday”s issues can be forgotten between Mimosas during Sunday brunch.
Pattern points… (Setups and technicals)
Friday Factors were everywhere. The morning”s bias persisted through the noon hour. Counter-trend sponsorship wasn”t durable. Afternoon trending drifted into the close. Those are the ones we discussed in the morning since they could influence intraday action.
Another one now has influence. Trends don”t end with a new extreme close on Fridays. And Friday was a new high close. So, even if the new week begins by immediately trending down — like, reacting to news — and even if the reversal were to persist for multiple sessions, a complete recovery would be expected.
Given that Monday is a holiday, reversing down would be interesting. Monday is the next Eurogroup meeting, and I”m not sure expectations can be downplayed any further. But this is the area of December”s highs, which also pushed back. And oversold RSIs at Friday”s 2082.75 low do require a retest at some point.
The template for a relentless recovery to new highs continues tracking. Friday could have probed sharply higher and been rejected by the close. That didn”t happen, so continually aggressive rallying remains likely — and likely to be rejected aggressively soon thereafter.
What”s Next… (Outlook and opportunities)
With no Saturday Review this weekend due to the holiday, extra time was taken during Friday”s post-close Market Wrap to review the bigger picture. Check the Activity Feed for its link soon. Have a great weekend, Happy Valentine”s Day, and Happy President”s Day!
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))
Thursday”s test of the 1.1425 resistance was probed momentarily, but Friday only ranged narrowly. Not closing higher prevented confirming Thursday”s breakout, which requires extending higher without delay to avoid becoming bearish.
Gold Apr Contract (GC, ETF: (GLD))
Friday”s gap up is suspicious for developing from Thursday”s “ineffectual pessimism.” The close was still overlapping Thursday”s ~1227.00 high, so not extending higher immediately after the weekend would be likely to resolve down.
Silver Mar Contract (SI, ETF: (SLV))
Friday”s gap up extended sharply higher intraday. The 1-1/2 week old gap back to 17.40 was tested and held. This sort of surge is often exacerbated by the weekend”s impending illiquidity. That”s not necessarily bearish, but it does make it difficult to extend higher immediately.
30-year Treasury Mar Contract (US, ETF: (TLT))
The past several sessions” intraday probes of fresh lows had never reacted up to fresh highs, so the decline remained intact into the weekend. New lows down to 145-24 now make 144-18”s test likely.
Crude Oil Mar Contract (CL, ETF: (USO, UWTI))
Friday”s gap up that extended during the morning to test 53.40 was retraced down to 52.00. Positive territory was maintained throughout, and 52.85 was still being overlapped near the close. Since the 54.00 prior highs weren”t touched first, optimism remains restrained, and the recovery”s momentum remains intact.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Friday”s open retested the 2.68 low of Thursday”s negative reaction to the weekly EIA. The test held, and the earlier breakout eventually resumed the breakout by rallying sharply to 2.81. A new relative high close remains in-play.
The weekend drift.
Sideways ranging gets wider, allowing a temporary dip.
At least, I”m assuming the dip is temporary. Buyers were rewarded this morning for gaining traction yesterday. So, other influences — especially bullish influences — are likely to be fulfilled, too.
REMINDER: NO SATURDAY REVIEW, SO WE”LL REVIEW THE BIGGER PICTURE DURING THE POST-CLOSE MARKET WRAP
That doesn”t preclude there being a dip. But like this morning”s opening dip, it makes a recovery likely.
So, the no-bias environment had room to dip to its 2083.25 bias-down signal. It wasn”t required, but a break under 2088.25 eventually extended to test 2083.25. And the break has been recovered entirely.
Oversold RSIs there make its retest likely. But that “unfinished business below” might have to remain outstanding for awhile. Especially if the recovery were to extend.
Fresh highs are still required, with unfinished business above at this morning”s 2082.75 bias-up target. That might remain outstanding, too — but the final hour before a three-day weekend is capable of almost anything.
Livestox, February 13 2015
In order, today”s Livestox covered the following issues:
Crude Oil
HAL
RIG
RITX
NRTI
VPOR
FEYE
ERBB
TAUG
TRTC
ATTBF
HEMP
VDSI
AHS
UWTI
Happy Valentine”s Day, and President”s Day!