Posts by Rod David
Saturday Review Link
Be sure to join us by 9:30am ET for this weekend’s Saturday Review. After discussing the bigger picture and gaming out strategies for playing next week’s likelier opening setups, we’ll do instant analysis of any stock charts that you request… See you there!
Morning Bias
| MON morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2728.00 | 2728.50 |
| …would target | 2736.00 | 2736.50 |
| Bias-down: under | 2708.75 | 2709.50 |
| …would target | 2700.25 | 2701.00 |
| Signal status: NO-BIAS, TESTED BIAS-UP SIGNAL | . | |
| NEW: BIAS VIDEOS… INTRO // EXAMPLE | ||
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.
Market Wrap (recording & summary)
Thursday night’s 35-point surge was triggered after midnight by favorable China trade war news. Friday morning’s Employment Situation report couldn’t have been greeted much more optimistically. Especially not after gaining no traction for rallying into AAPL’s earnings, and then reacting only within the afternoon’s range and no lower. Potential to 2766.50 was attacked to within 1 tick.
The report didn’t trigger much of a reaction. But more important, there was no reaction left to trigger. And the favorable overnight China story was starting to fall apart. So did the market, which invalidated the morning’s bias-up signal, and trended down through the noon hour. Its 2700.00 target was probed by 6 ticks.
The balance of the session chopped higher. First to 2715.00 which was reacting down 11 points on the way to new lows. Next was another spike up to 2728.00 on China trade news. It was still negative territory, and a bias-down, so the balance of the session ranged sideways.
Details and other markets coverage are discussed in the post-market Wrap recording here.
JOIN US FOR SATURDAY REVIEW AT 9:30 am ET.
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))
Initially extending the bounce up to 1.1495 stopped short of “higher prior lows” 1.1515 before intraday action formed a bearish key-reversal that reversed into negative territory down to 1.1410. The lows require at least a retest, which closing back under 1.1400 would signal is underway.
Gold Dec Contract (GC, ETF: (GLD))
Friday’s narrow sideways ranging around 1235.00 doesn’t confirm Thursday’s steep rally, and keeps the door open to closing back under 1228.00 to resume the decline.
Silver Dec Contract (SI, ETF: (SLV))
An overnight dip initially attacked the 14.70 sell signal before rallying sharply Friday morning to attack 14.95. But that was only reversed through the afternoon to again attack 14.70.
30-year Treasury Dec Contract (US, ETF: (TLT))
A week of correlating to stocks’ direction seems to have disengaged Friday. This was despite initially probing under 138-04 more shallowly than Thursday test while stocks had gone higher. Nevertheless, crashing stocks were apparently looking elsewhere in their flight-to-safety, as fresh pullback lows fell to 137-12. Resuming the rally relies on not only avoiding a second consecutive lower close Monday, but also on Sunday night or Monday morning price action almost immediately rejecting Friday’s break to make it an anomaly.
Crude Oil Dec Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Already piercing Thursday’s lows Friday morning down to to 62.63, avoiding a new downleg depends on closing back above 63.35, and then not delaying a recovery leg.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
Gapping down from Thursday’s retest of the 3.25 buy signal bounced off of its 3.17 prior low, which had also become a sell signal if pierced. The reaction was steep and substantial, reversing back up through 3.25 to retest Thursday’s 3.29 high.
Mid-day Update… Retesting the low (day).
67-point drop touching the low session’s high.
Invalidating this morning’s bias-up through 10:30 didn’t require offsetting tests of both bias-down parameters.
But they were tested. Their tests didn’t require holding. And they didn’t.
Completely retracing yesterday morning’s lows was likely, and likeliest to visit 2701.00. The low was 2699.50. The target was met coming out of the noon hour, when persistent Friday morning bias signals tend to lapse. Combined with RSIs diverging positively, a reaction began. Reacting up overlapped this afternoon’s 2709.50 bias-down target in time to avoid renewing the bias-down.
Being a Friday afternoon, and the bias-down target has been met and held, not resuming the decline would allow ending the session higher. Exiting the bias environment in rally mode could firm into the close. Probably not as a short-squeeze, per se, but there’s not much difference with such wide ranges for noise alone. It’s helpful that the low actually overlaps the 2707.00 high of Monday’s session, which is relevant for also having printed the trend low — of course, its test has already reacted.
Meanwhile, this is still a bias-down environment, so sellers aren’t marginalized, and the decline may resume. The window should be defined above by any test of its 2717.25 bias-down signal (being tested now). Back under 2704.50 could trigger another downleg targeting 2694.00-2696.00. Any lower could capitulate.