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))
Having rallied to resistance at 1.1645 Thursday, Friday needed to trend back down to avoid extending the rally. And having trended back down Friday, Monday is likely at some point to probe fresh lows. Which at this stage of the pattern can accelerate and extend.
Gold Dec Contract (GC, ETF: (GLD))
Thursday’s outsized gap up and intraday rally wasn’t rejected Friday, but neither was it confirmed as the session backed-and-filled. Having delayed the extension higher, Monday has no bullish excuse to further delay it. Its 1235.00-1241.00 corrective bounce target could be met Monday or Tuesday.
Silver Dec Contract (SI, ETF: (SLV))
Friday’s gap up to attack 14.75 still reacted down to fluctuate around unchanged at 14.60. Thursday’s reversal wasn’t confirmed with a second consecutive higher close. But neither was the reversal rejected, and any early strength coming out of the weekend would be credible for extending to fresh highs intraday.
30-year Treasury Dec Contract (US, ETF: (TLT))
Thursday’s probe above 138-04 to whatever degree — ultimately to 138-29 — was still likely to reverse back down. Gapping down to the 138-04 sell signal Friday didn’t break lower and eventually firmed to fill the gap back up to Thursday’s close.
Crude Oil Nov Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Firming $1 overnight after confirming Wednesday’s 73.90 sell signal down to 70.90 doesn’t relieve or at all alleviate the requirement for at least an eventual third lower close. Which Friday tried to produce, reversing its gap up to probe slightly under Thursday’s low.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
Thursday’s break under the 3.25 sell signal was more productive intraday than at the close, which nevertheless triggered the signal. A second consecutive lower close on Friday confirms momentum reversing down. Helping its credibility is the overnight bounce that nearly filled the gap back up to Wednesday’s 3.29 close. But the gap can still be tested more thoroughly until actually break under 3.15.
Mid-day Update… Another gasp.
As bearish as bullish… but not in a straight line.
Gapping up to yesterday afternoon’s 2777.00 bias environment high would have been bullish, if maintained. 
But it was barely touched before trending back down through the opening 15 minutes of volatility. That’s not a bullish behavior after gapping up to resistance.
As bullish as the setup would have been, it could be as bearish. And it has been pretty bearish.
The morning’s 2752.00 bias-down signal was tested before entering the noon hour. And that window extended down to within 1-2 ticks of yesterday’s 2732.00 cash session close equivalent. Already 10 points under this afternoon’s bias-down target, it reacted up 33 points to 2755.00.
Apparently that was an obligatory bounce. Now the 2742.25 bias-down target is being retested, after triggering late bias-down. It’s too late to renew the signal, but it’s still a bias-down environment, and otherwise free to extend the decline. It’s also under 2749.00, which probably breaks hard today if not recovered through the close.
Look ahead: Economic Calendar – for Mon Oct 15, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Neither of Monday’s two pre-open reports is reliable for influencing price action. But they’re both high-profile, so a surprise would have an impact.
Retail Sales
8:30 AM ET
Empire State Mfg Survey
8:30 AM ET
Business Inventories
10:00 AM ET
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET
Afternoon Bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2765.00 | 2768.00 |
| …would target | 2772.75 | 2775.75 |
| Bias-down: under | 2747.25 | 2750.50 |
| …would target | 2739.00 | 2742.25 |
| Signal status: LATE BIAS-DOWN | . | |
| 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… Snatching defeat from the jaws of victory.
Session-long rally setup fails to fully form.
Rallying overnight to 2785.00 was optimism. But it would be ineffectual if not exploited post-open. Gapping up to and/or through yesterday afternoon’s 2777.00 bias environment high still needed to extend higher.
It didn’t.
2777.00 is actually the resistance that yesterday’s bias environment high was testing. The open tested the actual 2778.50 high by 3 ticks. And then it collapsed. A dip to 2766.00 was recovered to 2778.00, but that has also collapsed to attack 2759.00.
Failing to complete the session-long rally setup can be as bearish as it would have been bullish. The earliest confirmation is to probe under the pre-9:45 open’s low after 10:15. That’s done. Like the session-long rally setup would have done, all but one timing window today should probe its prior timing window’s low.
None of which precludes sizeable intraday bounces. Even fresh highs can maintain the setup’s integrity, if rejected back under prior highs before that timing window lapses. Current example: A bounce from 2759.00 is retesting this morning’s 2773.00 bias-up target. Big bounce, which should hold this resistance because its test held already through 10:15.
A momentary probe of fresh session highs is still possible, but back under 2767.75 would start to signal the reaction down has resumed. Remember, the bigger picture’s goal is to close back under 2749.00, preferably under yesterday’s 2745.50 and 2732.00 closes, if not also under yesterday’s 2712.25 low. None of which is likely if probing a fresh high without rejecting it.