Posts by Rod David
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2670.25 | 2671.00 |
| …would target | 2678.50 | 2679.25 |
| Bias-down: under | 2648.50 | 2649.00 |
| …would target | 2637.50 | 2638.00 |
| Signal status: BIAS-UP, BIAS-UP TARGET EXCEEDED | . | |
| 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)
Closing above Tuesday’s opening high had indicated sellers were done. At least, the most recent sponsorship, responsible for the overnight and post-open plunges. 
Although the decline was likely to resume with new sponsorship, that’s usually delayed by a bounce that seeks out those new sellers at higher levels. And that usually persists into the 1-3 following sessions.
But Tuesday’s rally was never extended. The afternoon’s 2754.75 high had reacted down to 2738.50 into the close. Initial overnight ranging never recovered it.
A deeper overnight dip to 2719.75 was recovered back above 2735.50 to repeat Tuesday’s signal that sellers were done. Again. But its bounce to 2742.00 was reversing down through the open. Last chance pullback limits at 2735.50, 2721.00-2723.25, 2715.50 — and even 2701.50 — gradually failed. Always a possibility in every scenario, the invalidation template made a rare appearance.
Wednesday’s drop neutralized “unfinished business” at the oversold RSIs at Tuesday’s 2692.25 low. Tuesday’s bounce neutralized the normal attraction to “higher prior lows” at 2751.00-2752.50 from Monday. Oversold RSIs at Wednesday’s late 2652.25 low are now outstanding.
The next lower objectives that we’ve been discussing at 2671.00 and 2663.75 were met and exceeded. A 20-point bounce after the cash session close held its test of 2671.00 as resistance. The next lower objective in-play is 2637.25. Oversold RSIs at the close made a hold-short compelling.
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))
Gapping down Wednesday extended to test the upper-end of the longstanding 1.1395-1.1430 target, which corrects August’s Island pattern. Extending lower to close under 1.1370 would signal a complete retracement of the Island, whether to form a Double Bottom or to extend the already protracted downleg.
Gold Dec Contract (GC, ETF: (GLD))
Flat-to-lower ranging into Wednesday’s open probed back under 1235.00 through the morning. Not with any velocity that would add credibility to reversing momentum down. But any initial weakness Thursday would get a benefit of the doubt for trending down intraday. By the same token, rejecting Wednesday’s reversal attempt by closing back above 1243.00 would next target 1253.00-1256.00 and 1277.00.
Silver Dec Contract (SI, ETF: (SLV))
The surge back up to 14.80 wasn’t extended Wednesday, keeping alive its potential for resolving up to 15.15, unless Thursday opens weaker. A downleg must still break support at 14.60.
30-year Treasury Dec Contract (US, ETF: (TLT))
Having touched 138-04 overnight, recovering Wednesday to probe back above the 138-18 buy signal is more credible for launching the corrective bounce targeting at least 139-26, if not also 1 point higher.
Crude Oil Dec Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Bouncing ahead of Wednesday’s EIA report had tested the 67.25 bounce limit, and started reacting down. Its knee-jerk reaction was muted, but eventually began firming to fresh highs above the 67.25 buy signal.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
Tuesday’s bounce was likely only noise so Wednesday’s gap up back to Tuesday’s high failed to extend higher. The inside day could produce a blip-up Thursday, perhaps a temporary knee-jerk reaction to EIA, but resolving down remains likely.
Mid-day Update… Template X
Position of strength invalidated.
Closing yesterday above the morning’s 2721.00-2723.25 highs had indicated the overnight and morning’s sponsorship was done. Not that the pattern would allow yet for a durable bottom, but a corrective bounce was likely.
Other factors had made the first reaction likely to be down, and then the rally could resume. Backing-and-filling held its earliest possible target and recovered enough in-time to get a benefit of the doubt. But the decline has only persisted since.
Actually, the lowest potential pullback target at 2701.50 is being tested now. And RSIs are essentially diverging positively. It’s still a bias-down environment, but rally could emerge.
Otherwise, the invalidation template will be winning out. A much more substantial downleg compared to Tuesday would be underway. And the decline from recent highs will have resumed.
Look ahead: Economic Calendar – for Thu Oct 25, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Only one of Thursday’s econ reports is both high-profile AND influential to price action. That’s the pre-open Durable Goods. Any noticeable reaction to it is likely to be duplicated by post-open report. ECB will have announced its policy decision, but Mario Draghi’s press conference will likely still be underway. Afternoon volatility may subside ahead of post-close earnings from AMZN, GOOG/L, and INTC.
*Durable Goods Orders
8:30 AM ET
International Trade in Goods
8:30 AM ET
Jobless Claims
8:30 AM ET
Retail Inventories [Advance]
8:30 AM ET
Wholesale Inventories [Advance]
8:30 AM ET
Pending Home Sales Index
10:00 AM ET
EIA Natural Gas Report
10:30 AM ET
Kansas City Fed Manufacturing Index
11:00 AM ET
7-Yr Note Auction
1:00 PM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET