Posts by Rod David
Market Wrap (recording & summary)
If there were any single-worded tip to navigating Thursday morning’s wide swings, it is impatience. Multiple signals, up and down, all triggered multi-point moves that were produced within minutes. Even more quickly, the moves were retraced to their triggers and then quickly reversed in the opposite direction. Substantially.
If there were any single-worded tip to navigating Thursday afternoon’s narrow ranging, it is patience. And a lot of it, because the narrow ranging actually began at the morning’s bias-environment exit. At least we knew which way the range was likely to resolve, which would probably be different from Wednesday’s collapse after also ignoring breakout opportunities.
Perhaps the afternoon inhibition / anxiousness was due to AAPL’s post-close earnings (which we discussed intraday would be greeted from a position of weakness). This could have formed backing-and-filling instead of eking higher. The former would have been defensive posturing and potentially bullish from a contrarian perspective. The latter’s optimism was potentially bearish. More so, after fulfilling the minimum requirement to probe Wednesday’s 2737.00 high and preferably touch 2741.00.
Closing above Wednesday’s 2737.00 high would have been bullish, had the breakout been underway prior to ignoring the timely breakout opportunities. Instead, it is potentially bearish from a contrarian perspective. And having stretched the optimistic rubber band intraday, without validation from the post-close earnings, the entire retracement of Thursday morning’s Trump tweet headline reaction is free to be retraced — there may even be an air pocket under Thursday afternoon’s range.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
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 second consecutive confirming close under Tuesday’s breakout requires an eventual third lower close before a durable bottom can form. That unfinished business below didn’t prevent Thursday’s gap up back to the upper-end of the original 1.1430 target. Extending to 1.1463 intraday filled Monday and Friday’s gaps, so any initial weakness Friday would be likely to extend down into and out of the weekend.
Gold Dec Contract (GC, ETF: (GLD))
Wednesday’s second consecutive confirming close under Tuesday’s break under the 1228.00 sell signal didn’t prevent Thursday’s gap up to and through 1228.00. Extending higher intraday tested 1239.00, with room to also test 1241.00 before suggesting more than a temporary detour before eventually fulfilling the minimum required third lower close.
Silver Dec Contract (SI, ETF: (SLV))
Wednesday’s gap down had held 14.28 support whose break would have confirmed lower lows remain in-play. That vulnerability was exploited overnight and Thursday’s gap up to and through 14.40 extending sharply higher intraday to test 14.80. Closing back under 14.70 would now resume the decline.
30-year Treasury Dec Contract (US, ETF: (TLT))
Still no catalyst for a flight-to-safety, Thursday morning wasn’t inhibited from probing under 138-04. But only temporarily as the balance of the session recovered to close back above 138-04 in positive territory– again, despite no catalyst, suggesting that the lower-end of a range is set.
Crude Oil Dec Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Wednesday’s confirmation of Tuesday’s breakout under 66.21 wasted no time fulfilling its minimum requirement for at least a third lower close on Thursday. Fresh lows at 63.11 could extend lower so long as bounces now hold 65.25 as resistance.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
Closing just above the 3.25 buy signal Wednesday extended higher overnight to 3.32. But Thursday ‘s open was greeted unchanged while dipping back down to 3.21. The close recovered to unchanged, still in position to extend the recovery.
Look ahead: Economic Calendar – for Fri Nov 2, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday morning’s Employment Situation report is among the highest profile and reliably influential to price action. Reaction to Wednesday’s ADP was bullish, but now Friday’s report is being greeted substantially higher, perhaps more than fully discounting similar news.
*Employment Situation
8:30 AM ET
International Trade
8:30 AM ET
Factory Orders
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 | 2734.25 | 2734.50 |
| …would target | 2740.75 | 2741.00 |
| Bias-down: under | 2724.75 | 2725.25 |
| …would target | 2717.25 | 2717.75 |
| Signal status: 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… No shortage of opinion.
Astonishingly wide opening swings and THEN news.
The open was greeted at 2720.50 and extended post-open to within 5 ticks of the 2727.25 pre-open high. 
That also tested the 2725.25 bias-up target, and its reaction quickly fell to 2712.00. Then a slightly shallower bounce fell to 2707.50. Both bias-up parameters were well on their way to being rejected.
Then came a Trump tweet, favorable to China trade negotiations.
The reaction was nearly immediate, returning to the 2725.25 bias-up target. That triggered the 2717.75 bias-up signal, bias-up target met. This is still a bias-up environment, and the bias-up signal has held as support. Fresh highs are testing 2732.25.
Back under 2724.50 (being touched now) would start to signal another downdraft. Further downside during the bias-up environment should be limited to testing the 2717.75 bias-up signal as support — and then be vulnerable to retrace the headline reaction back to session lows. Back above 2728.75 (also being tested now) should instead resume the rally with potential to 2741.00.