Posts by Rod David
Market Wrap (recording & summary)
Tuesday’s wide, sideways choppiness had reflected sharply disparate opinion and no inhibitions to expressing it, i.e. a breakout waiting to explode in one direction or the other. The argument was won decisively Wednesday.
S&Ps down 100 points at the close, 108 afterward, to 2780.00. From Tuesday’s 2886.00-2888.00 close. From last week’s 2942.00-2945.00 highs. Back under January’s high, and testing June’s 2788.00-2798.00 “lower prior highs” as support.
Meanwhile, the next set of lower prior highs begins at 2749.00. The next consolidation’s 61.8% retracement is around 2721.00. And the next confirmation of anything bigger would be to close under 2709.00.
Of the “unfinished business” outstanding above — 2947.50‘s new Globex trend extreme, the high’s 2945.25 opening gap up, no-bias trending retracements at 2900.50 and now also 2838.75 — only Wednesday’s 2838.75 is currently relevant, being less than one day and one leg removed. Both of which can become moot soon.
June’s lower prior highs form the upper-end of the Complex Ascending Triangle we’ve monitored weekly for months. It eventual break to new highs was likely, and likely to be short-lived, and likely to be reversed back down, hard (as the index comparison’s context has been suggesting for weeks). Its hard reversal is also likely eventually to retrace the triangle, usually fully to its 2528.00 low. But not in a single leg. And possibly not without an external artificial rescue attempt offering another detour up.
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))
Tuesday’s 1.1495 gap down under all prior lows requires an eventual retest after its post-open action rallied intraday. That didn’t prevent Wednesday morning from extending higher to fill the gap back up to Monday’s 1.1590 close. And it can’t prevent probing any higher Thursday morning, although that would be likely to reverse back down through the afternoon.
Gold Dec Contract (GC, ETF: (GLD))
Wednesday’s flat-to-higher ranging didn’t extend Monday’s collapse, and it was too shallow to reject it — for a second consecutive session. The break is all but confirmed, although Wednesday’s bounce shouldn’t extend much beyond Thursday’s open before failing.
Silver Dec Contract (SI, ETF: (SLV))
Probing slightly lower lows Wednesday morning down to 14.25 tested uptrending support and the 14.28 level whose break would confirm a new downleg underway. Its test was ongoing through the afternoon, but not rejected.
30-year Treasury Dec Contract (US, ETF: (TLT))
Tuesday’s bounce wasn’t going to extend or at least not gain traction, but gapping down Wednesday and spending the entire session in negative territory may be resuming the decline. Prior intraday lows at 136-26 were tested, with fresh lows lying another half-point lower.
Crude Oil Nov Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Bouncing back up to the 75.30 buy signal Tuesday without triggering it prevented greeting Wednesday’s EIA report from a position of strength. Its reaction trended back down under the 73.90 sell signal that had held two prior tests Friday and Monday, but broke lower Wednesday to 72.90. A second consecutive lower close would undermine any higher targets.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
Tuesday’s failure to extend Monday night’s extension of the intraday surge required extending higher Wednesday without delay to avoid a much deeper corrective dip. Which Wednesday did — rallying overnight to within 1 cent of Monday night’s 3.37 high — but that was only half the battle. The intraday high got to only 3.34 before reversing back under the two prior sessions’ 3.29 highs to 3.25. Thursday’s EIA report is being greeted from a position of weakness. That doesn’t preclude an initially favorable knee-jerk reaction up, but the burden of proof is on buyers to extend the rally, or else to correct it.
Mid-day Update… Trying to bottom. Good luck.
Noon hour ranging still stuck.
This morning’s plunge to 2837.50 bounced to 2850.00 during the noon hour, essentially ranging around 2844.00. The noon hour exit’s attempt to break lower attacked 2834.00 before snapping back up to attack 2850.00. Sort of warning sellers not to try that. The market often talks tougher than it is.
Nevertheless, the snap back up outlasted the 2838.75 bias-down signal to trigger no-bias. Probing under it now would be “no-bias trending” and require being retraced. Which the earlier rejection warned against.
But the pattern of a singular probe to fresh lows does not qualify as a bottom. The low should be retested, if not also probed down to 2830.00 or 2825.00. Delaying the probe until the bias environment lapses would allow the decline to avoid being retraced back up to 2838.75 before extending. Probing it now would be more easily recovered.
Look ahead: Economic Calendar – for Thu Oct 11, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s pre-open CPI is both high-profile and reliably influential to price action. The afternoon’s 30-year auction is at least reliable for inhibiting price action before its usually unsurprising results, which aren’t necessarily assured after the month’s plunge.
*CPI
8:30 AM ET
Jobless Claims
8:30 AM ET
EIA Natural Gas Report
10:30 AM ET
EIA Petroleum Status Report
11:00 AM ET
*30-Yr Bond Auction
1:00 PM ET
Treasury Budget
2:00 PM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET
Afternoon Bias
| WED afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2844.00 | 2849.25 |
| …would target | 2852.50 | 2857.75 |
| Bias-down: under | 2833.25 | 2838.75 |
| …would target | 2825.00 | 2830.50 |
| Signal status: NO-BIAS, TESTED BIAS-DOWN 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.