Posts by Rod David
Optimistic ahead of the news.
Afternoon ranging is trying to end on a high note. Again.
The noon hour”s dip to 2048.50 was recovered back to this morning”s 2055.0 high during the bias environment. It was even probed by 3 ticks.
But it reacted down to 2051.00 before the final hour began. And both the bias environment exit and final hour entry were within the noon hour”s range.
Even the 3:10-3:20 timing window ranged narrowly.
But a later surge has extended up to 2058.00. This is entirely in-line with my expectations for optimism ahead of tomorrow”s report. There is no requirement after the close.
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 strength helped to confirm that the confirm breakout was resuming on schedule, after Wednesday”s corrective dip held the 1.1400 pullback limit through the close. The gap back to Tuesday”s 1.1500 close was still being tested, so extending higher without delay Friday would be helpful, too.
Gold Apr Contract (GC, ETF: (GLD))
Initially dipping Thursday suggested the decline”s resumption remained intact. The dip didn”t extend, and a close under 1257.50 should make the decline”s resumption obvious by extending down sharply.
Silver Mar Contract (SI, ETF: (SLV))
Gapping down Thursday helped to confirm that Wednesday”s fresh reaction high was entirely distributive. Closing under Thursday”s low would help to confirm the decline has resumed.
30-year Treasury Mar Contract (US, ETF: (TLT))
Immediately spiking down Thursday suggested Wednesday”s late bounce was being rejected. That would be interesting, because the late bounce had prevented yet confirming Tuesday”s sell signal. Regardless, Friday”s pre-open Employment Situation report should either resume the decline, or else trigger backing-and-filling up to 150-15.
Crude Oil Mar Contract (CL, ETF: (USO, UWTI))
Wednesday”s deep drop absorbed slightly lower pullback lows overnight to rally sharply Thursday, testing 51.50 resistance. Recovering it would have been suspiciously impatient. But the rally is free to extend at any time.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Wednesday”s dip prevented greeting Thursday”s EIA report from a position of strength. A reaction down to the news did probe the 2.61 prior lows. The drop didn”t extend and was still overlapping prior lows, so another bottoming setup may develop. Closing back above 2.70 would be bullish.
Settling up.
Tomorrow morning”s report is inhibiting volatility.
This morning”s bias environment eventually probed above 2053.25 fresh highs at 2055.00. It was pretty choppy getting there. And pretty temporary — the noon hour dipped to 2048.50.
Anxiousness ahead of tomorrow”s pre-open Employment Situation report is probably paralyzing price action to some degree. I suspect any bias will be optimistic. In fact, now 2055.00 is being attacked to within 3 ticks.
Meanwhile, this is a no-bias environment. But the next hour could test the 2056.50 bias-up signal without becoming bearish “no-bias trending.” And above there would target 2059.00-2060.00, or higher. Back under 2051.00 would start signaling a retest of the opening range around 2044.50.
Look ahead: Economic Calendar – for Fri Feb 6 2015
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: The monthly Employment Situation report is being released without any other reports, which tends to increase its influence on price action.
**Employment Situation
8:30 AM ET
Dennis Lockhart Speaks — dove
12:45 PM ET
Consumer Credit
3:00 PM ET
Afternoon bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2062.50 | 2056.50 |
| …would target | 2067.50 | 2061.50 |
| Bias-down: under | 2050.50 | 2044.50 |
| …would target | 2045.00 | 2039.00 |
| Signal status: NO-BIAS | FAQ | |
| INTRO VIDEOS #1 and #2 | ||
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.