Posts by Rod David
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’s gap up had tested “higher prior lows” and filled a three-week old gap up to 1.1545, so reversing down without delay was necessary for the bounce to be considered only a correction. Thursday’s immediate weakness was credible for extending down intraday, which it did — a lot — to test the 1.1400 sell signal. Closing lower Friday would confirm at least a retest of recent lows is underway.
Gold Dec Contract (GC, ETF: (GLD))
Wednesday’s gap up to the pattern’s 1236.00 resistance had trended back down intraday to test its 1228.00 sell signal. Probing fresh lows overnight tested 1221.00, and now must close lower Friday to confirm the trend is reversing down.
Silver Dec Contract (SI, ETF: (SLV))
Wednesday’s gap up had held a test of the 14.70 sell signal as resistance, before falling back down to fresh lows at 14.50. Thursday’s gap down to and through 14.50 extended under 14.40 to confirm at least an eventual third lower close is required.
30-year Treasury Dec Contract (US, ETF: (TLT))
Wednesday’s pre-open attack on the 138-04 buy signal was retraced intraday. Overnight backing-and-filling then attacked last Friday’s 137-02 prior intraday low. The next break beyond either is likely to extend in that direction.
Crude Oil Dec Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Tuesday’s breakout had absorbed Wednesday’s pre-open surge that attacked the pattern’s 63.22 bounce limit, which was reversed to fresh lows and a fresh low close. Lower lows Thursday’s attack on 60.40 may have fulfilled the confirmed breakout’s minimum requirement for at least an eventual third lower close, but the downleg’s momentum remains intact so long as bounces now hold 61.75 as resistance.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
Greeting Thursday’s EIA report from a position of strength wasn’t likely to produce fresh highs so much as recover from a knee-jerk reaction down. But there was neither, as the congestion persisted, still forming a position of strength to help recover from a correction.
Mid-day Update… Playing defense.
Still trading exclusively in negative territory.
Today’s gap down to 2804.50 bounced to 2813.25, but still triggered the 2807.75 bias-down signal. Its 2800.75 bias-down target remains outstanding.
Now the noon hour has touched this afternoon’s 2815.25 bias-up signal, which held.
It didn’t trigger, despite reversing down to the 2806.00 bias-down signal in time to invoke the grace period. But it was still being overlapped — by a probe well under it to 2804.00 — to trigger noN-bias. The 2806.00 bias-down signal need not define the window’s lower-end.
The 2:00 FOMC policy statement is a catalyst for volatility. The two likeliest templates for a knee-jerk reaction:
- Down to satisfy the 2800.75 “unfinished business” below and become vulnerable to rallying back up to either 2811.00 or else to the 2818.00 overnight highs.
- Up to recover 2811.00 or 2818.00 and either extend higher through Friday morning, or else collapse into the close.
Meanwhile, there’s no requirement to trend in either direction, beyond the overnight range. But for this afternoon’s news event, it’s almost getting a little late for a reversal down to be credible.
Look ahead: Economic Calendar – for Fri Nov 9, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s reports and speakers should keep volatility active. Pre-open PPI and post-open Consumer Sentiment are both high-profile and reliably influential to price action. Also, post-open reports should duplicate any reaction to the pre-open report. Throw in the quick line-up of Fed speakers, and the market should behave very anxiously through the open.
*PPI-FD
8:30 AM ET
*John Williams Speaks
8:30 AM ET
*Patrick Harker Speaks
8:50 AM ET
*Randal Quarles Speaks
9:00 AM ET
*Consumer Sentiment
10:00 AM ET
Wholesale Trade
10:00 AM ET
Baker-Hughes Rig Count
1:00 PM ET
Afternoon Bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2814.75 | 2815.25 |
| …would target | 2822.25 | 2822.75 |
| Bias-down: under | 2805.50 | 2806.00 |
| …would target | 2799.00 | 2799.50 |
| Signal status: noN-BIAS, STILL TESTING BIAS-DOWN SIGNAL, TESTED BIAS-UP SIGNAL | . | |
| NEW: BIAS VIDEOS… INTRO // EXAMPLE | ||
1. At 1:20, 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 1:20 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 1:20 would invoke a grace period through 1:30 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 1:30 after invoking the grace period would trigger “noN-bias,” with no bias influence.
Post-open Review… Weak strength.
Bias-down is triggered, but not extended.
The 2801.50 pre-open low was recovered to test the 2808.75 bias-down signal as resistance. The open was greeted back down at 2804.00, and consolidated back up to eventually recovered up to 2813.25 through the first half-hour. Hovering there never gained momentum, and price soon collapsed.
The collapse has held 2805.00, and along the way it triggered the 2808.75 bias-down signal. Another bounce up to 2811.00 is also becoming a collapse back down to post-open lows. The 2800.75 bias-down target is in-play.
Exiting the bias environment under yesterday afternoon’s 2793.50 low would be credible for extending down this afternoon. That’s not the only path down, but their numbers dwindle as time goes by without much success by this morning’s sellers.