Posts by Rod David
Market Wrap (recording & summary)
Tuesday’s “inside day” didn’t seem like it. But only because of the wide intraday range it had to roam. Opening essentially flat with Monday’s close at 2641.00 and quickly surging to 2675.00 doesn’t seem like an inside day, but that was still well under Monday afternoon’s 2683.00 high. Two more swings eventually attacked 2640.00 and bounced again to 2686.00 before the close, just above Monday afternoon’s 2683.00 high — and still well under Monday morning’s 2707.00 high.
Inside day.
Inside days tend to reflect weak-handed sponsorship. So, being biased upward suggests that strong hands are still sellers. That said, inside day or not, “weak-handed” buyers did produce a 41-point rally. Initially extending higher Wednesday would get a benefit of the doubt for extending higher intraday. Meanwhile, trending down overnight could get into position to extend down through Wednesday morning.
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))
The longstanding 1.1394-1.1430 target that was already met last week was retested Tuesday. Friday’s gap down under all prior lows was retested, but its test did not trigger a reaction up. Not already rallying early Wednesday would be likely to extend the breakout another 1-2 sessions.
Gold Dec Contract (GC, ETF: (GLD))
Dipping pre-open to 1221.50 was recovered to only test 1224.50 intraday. But the 1228.00 sell signal held a test as resistance, so any initial weakness Wednesday would be credible for extending down intraday.
Silver Dec Contract (SI, ETF: (SLV))
Extending Monday’s break under the 14.57 sell signal to 14.40 support only hovered there through Tuesday, still vulnerable to resuming the decline.
30-year Treasury Dec Contract (US, ETF: (TLT))
Stocks in positive territory Tuesday mean no flight-to-safety, allowing Monday’s pullback to extend a little deeper and fill the gap back down to Friday’s 138-22 close. The bullish pattern could tolerate only a slight delay in resuming its rally.
Crude Oil Dec Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Having failed to maintain repeated probes of the 67.25 buy signal, a break lower had become likely. Tuesday’s gap down to the range’s 65.75 lower-end quickly fulfilled the objective, and held through the close. Avoiding a second consecutive lower close Wednesday would be bullish. Meanwhile, Tuesday’s post-close API is being greeted from a position of weakness that suggests at least probing lower temporarily.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
Tuesday’s gap up surged to fill the gap back up to Thursday’s 3.25 close. Reacting down filled the gap back to Monday’s close. Extending down under 3.14 would launch a new downleg. Back above 3.25 would be much likelier to break higher on its second attempt.
Mid-day Update… Another door opens?
Afternoon bias-down is on thin ice.
The open’s rally to 2675.00 was retraced to 2646.00. Its reaction into the noon hour nearly retraced the drop up to 2674.00. That was retraced entirely back down to a lower low at 2640.50, retesting the 2641.25 opening print, and yesterday’s 2643.00 close.
Bounces are failing, but positive territory is holding.
This afternoon’s 2656.75 bias-down signal triggered cleanly after already having fulfilled its 2651.25 bias-down target. Regardless of having tested and now also retested the bias-down target, probing back above the bias-down signal during the bias-down window would require being retraced.
And the bias-down signal is being probed as resistance now.
Slow-playing a recovery for now is the best chance to rally when the bias environment lapses. Otherwise, exiting the bias environment under its 2651.25 bias-down target is the best chance to resume the decline targeting yesterday’s low.
Look ahead: Economic Calendar – for Wed Oct 31, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday’s pre-open ADP offers an opportunity to gauge sentiment ahead of Friday’s payrolls report. Meanwhile, the high-profile Chicago PMI is also reliable for influencing price action. And any noticeable reaction to ADP is likely to be duplicated by PMI.
MBA Mortgage Applications
7:00 AM ET
*ADP Employment Report
8:15 AM ET
Employment Cost Index
8:30 AM ET
*Chicago PMI
9:45 AM ET
EIA Petroleum Status Report
10:30 AM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2673.00 | 2673.75 |
| …would target | 2680.00 | 2680.75 |
| Bias-down: under | 2655.75 | 2656.75 |
| …would target | 26500.25 | 2651.25 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET MET | . | |
| 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.