Posts by Rod David
This weekend”s Saturday Review begins
This weekend”s Saturday Review begins at 9:30am ET.
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Friday”s post-close Market Wrap recording
Friday”s post-close Market Wrap recording is here — 63% on RottenTomatoes!
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Morning bias
| MON morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2056.50 | 2050.50 |
| …would target | 2061.25 | 2055.50 |
| Bias-down: under | 2046.50 | 2040.75 |
| …would target | 2039.50 | 2033.50 |
| Signal status: noN-BIAS, STILL TESTING 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 1/26
If Friday had wanted to kill the rally… then it had ample opportunity to get the ball rolling well before the afternoon slide. Unless the decline were extending down into Monday”s noon hour, its recovery remains likely.
Pattern points… (Setups and technicals)
Friday morning”s no-bias signal gets every benefit of the doubt for being valid. Having held a test of the 2049.25 bias-down signal through 10:15, an offsetting test of the 2061.50 bias-up signal has become “unfinished business above.”
That doesn”t preclude a detour, however deep and for however long, but usually the unfinished business is resolved much sooner. Regardless, so long as there is unfinished business above, we assume that any drop is only a temporary detour.
Was Friday afternoon”s 13-point slide the end of the detour? It did fulfill its objective of retesting the morning”s low. It did close at 2044.00 support. And it didn”t break under a prior relevant low. All during an otherwise irrelevant Friday afternoon. Enough immediate strength Monday would be credible for at least probing fresh highs up to 2065.00 or 2075.00.
Also credible would be extending Friday”s pullback to 2038.50 or 2031.00. In fact, that would be likely, if this pattern were greeting any other day but the weekend. Time heals all wounds — we”ll see if this one can be healed after two days.
What”s Next… (Outlook and opportunities)
Join us at 9:30am ET for this weekend”s Saturday Review. We”ll discuss the bigger picture”s longer-term potential. And we”ll also do on-demand instant chart analysis. Click here up to 30 minutes before the start 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))
Trending down overnight and gapping down sharply Friday created three obstacles for a recovery. First is the 1.1200 gap down, under all prior lows, which will need to be retested after bouncing back into the prior range at least above 1.1385. Second, trending through Friday tends to be duplicated Monday morning, which would only add further difficulty to a qualified retest of Friday”s gap down from above. And third, Friday”s low is a second consecutive lower close, confirming Thursday”s breakout from a multi-session range and requiring an eventual third lower close. Meanwhile, gapping up would create another obstacle, needing to fill the gap close left outstanding below.
Gold Feb Contract (GC, ETF: (GLD))
Is 1310.00 going to be avoided? Retesting Wednesday”s 1307.00 prior high Thursday was enough to react down to Thursday”s 1284.50 low Friday. A bounce there may have formed the right shoulder to a Head & Shoulders reversal pattern. Another break under 1284.50 could trigger it. Meanwhile, fresh highs remain in-play.
Silver Mar Contract (SI, ETF: (SLV))
Friday”s narrowly ranging inside day still didn”t probe prior highs, which Thursday pessimistically avoided, which is potentially bullish from a contrarian perspective.
30-year Treasury Mar Contract (US, ETF: (TLT))
Thursday”s lower close was all but rejected by Friday”s gap up. The session only ranged around Thursday”s 149-24 high. Closing above Friday”s 150-11 post-open high would target a retest of the prior high, presumably up to 151-28. Regardless, a close under Thursday”s 147-12 low is required eventually.
Crude Oil Mar Contract (CL, ETF: (USO))
A bilp-up in reaction to Abdullah”s death Thursday night was reversed back under 46.25 support before Friday”s open. The extended ranging at its support without yet rallying was already threatening to launch a new downleg. Friday afternoon did trend down to fresh lows at 45.35. Back above 47.80 would trigger a recovery. Otherwise, a second consecutive lower close would confirm a new downleg is underway.
Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
Gapping up Friday helped to confirm that Thursday”s probe of new lows did not gain traction. But gapping up creates “unfinished business below” at the gap back to Thursday”s 2.84 close, so probably cannot launch a recovery. Friday afternoon”s action was testing the 2.98 buy signal.