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))
Gapping up slightly extended only so far as to fill the gap back up to Friday’s 1.1475 opening gap. Neutralizing its attraction above allows almost any initial weakness Wednesday to be credible for extending down, signaled under 1.1400.
Gold Dec Contract (GC, ETF: (GLD))
Tuesday’s slightly lower low started chipping away at 1228.00 support, after the “ineffectual optimism” of having hovered above it Monday.
Silver Dec Contract (SI, ETF: (SLV))
Monday’s consolidation had delayed extending Friday’s break under the 14.70 sell signal, but Tuesday’s break under 14.50 compensated for the delay. A second consecutive lower close Wednesday would confirm.
30-year Treasury Dec Contract (US, ETF: (TLT))
Monday’s narrow flat-to-higher ranging was followed by Tuesday’s narrow flat-to-lower ranging, all contained within Friday’s range to suggest that the first trending attempt will be false. Regardless, Friday’s break isn’t rejected, greeting Wednesday’s 30-year auction not from a position of strength, but still capable of absorbing an initially negative knee-jerk reaction down.
Crude Oil Dec Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Not maintaining 63.22 overnight had no excuse to further delay resuming the decline, and Tuesday morning plunged to 61.31. A second consecutive lower close on Wednesday would confirm that at least an eventual third lower close is required.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
Tuesday’s narrow flat-to-higher ranging up to 3.58 did not even bother trying to reject Monday’s surge, which doesn’t necessarily help it to extend higher immediately, but does help to recover from a pullback to 3.42.
Mid-day Update… Restrained optimism.
Hovering at highs.
The open’s surge stopped immediately upon filling the gap back to Friday’s 2751.25 gap up. Just touching a filled gap isn’t ever likely to launch a reversal. And that undermined its reaction down to 2742.00 from extending. Which it didn’t.
The noon hour’s probe up to 2753.25 satisfies the room for noise above 2751.25, and touching it did react down. But that hasn’t launched a reversal, either. Not for lack of trying — the afternoon’s 2750.50 bias-up signal held its test to trigger late no-bias.
Exiting the bias environment back above 2752.50 would start to signal the rally is extending. This afternoon’s 2757.50 bias-up target would still be a likely attraction, and any higher would be difficult to reverse down today. Otherwise, back under 2748.00 and 2743.00 would signal and confirm a reversal is underway already.
Look ahead: Economic Calendar – for Wed Nov 7, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday’s 30-year auction tends to inhibit volatility until the results are posted. No other report is either high-profile or influential to price action.
MBA Mortgage Applications
7:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
*30-Yr Bond Auction
1:00 PM ET
Consumer Credit
3:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2751.00 | 2750.50 |
| …would target | 2757.75 | 2757.25 |
| Bias-down: under | 2741.50 | 2740.75 |
| …would target | 2736.25 | 2735.50 |
| Signal status: LATE NO-BIAS, 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… Not wasting time.
Already neutralized unfinished business above.
Reacting down overnight consolidated under the 2738.00 earlier overnight low.
After having probed yesterday’s highs, exiting the open any lower would have triggered a bearish Globex-flip setup. And forming but not triggering the setup would be as bullish as it would have been bearish.
Meanwhile, a couple of other bearish setups could be triggered by opening under 2730.00. Which was certainly being tested, and for quite awhile overnight. But not already probing lower before the open had made a post-open probe less likely.
So, we were prepared to take early action on surging through the 2737.00 open through its calculable 2738.75 buy signal. Yesterday’s highs were quickly recovered, on the way to filling the gap back up to Friday’s 2751.25 open.
Retesting 2751.25 has tried reacting down to attack 2745.00. But this is now a bias-up environment, and back above 2749.25 (being tested now) should extend the rally to at least 2753.25 or even higher. Back under the 2743.25 bias-up signal would start to signal momentum reversing down, but it would require a retest unless the bias environment were exited under its 2734.50 bias-down signal.