Posts by Rod David
Morning Bias
| MON morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2896.25 | 2900.25 |
| …would target | 2903.50 | 2907.50 |
| Bias-down: under | 2884.00 | 2888.00 |
| …would target | 2877.50 | 2881.50 |
| Signal status: NO-BIAS, TESTED BOTH BIAS-DOWN PARAMETERS | . | |
| 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)
Friday’s Employment Situation report had kept overnight action range bound, albeit a wide and choppy range. The flat 2906.00 open tried to resume Thursday afternoon’s recovery, only to reverse down from testing and retesting 2914.00. The first leg was shallow, and the second leg plunged to 2880.50 and then to 2873.25.
The afternoon’s bias-down target was 1 point lower at 2872.25, which is close enough not to become “unfinished business.” That allowed the balance of the afternoon to focus on unfinished business above, at the morning’s 2900.25 bias-down signal, whose break during the no-bias environment requires being retraced. The afternoon’s bounce came within 6 points before stalling.
Closing Friday under 2879.00 would have next targeted 2850.00, retracing the leg prior to the month-old rally. Holding its test through the close only prevents putting the next lower objective into play. Stocks are open as usual on Monday’s Columbus Day, but might not trade normally for the holiday, which is usually subdued. We’ll review paths at the Saturday Review.
Details and other markets coverage are discussed in the post-market Wrap recording here.
JOIN US AT 9:30 ET FOR THIS WEEKEND’S SATURDAY REVIEW.
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))
Friday could almost be construed as an inside day, but its high did pierce Thursday’s range. So did its low, if ignoring the overnight low that was never revisited intraday. Regardless, the delay in exploiting Thursday’s recovery from overnight lows now requires adjusting the buy signal up to 1.1630, still targeting 1.1740. Fresh lows would instead resume the decline.
Gold Dec Contract (GC, ETF: (GLD))
Thursday’s close at or under the 1203.00 sell signal never extended under 1201.50 to confirm before bouncing Friday back up to the 1209.50 yet again. It held, yet again, keeping alive the potential for a break lower that would target 1172.50.
Silver Dec Contract (SI, ETF: (SLV))
Closing under the 14.65 pullback limit Thursday didn’t gain any traction before bouncing back up Friday morning. The pattern remains vulnerable to probing above 14.80 so long as the pullback limit continues to hold.
30-year Treasury Dec Contract (US, ETF: (TLT))
Friday’s fresh low close fulfilled the minimum requirement for at least an eventual third lower close, which had been created by Wednesday’s confirmed sell signal. Further lower lows are possible, and likely until a reversal signal forms. But the pattern of two consecutive slightly lower lows following Wednesday’s plunge tends to reflect pent-up selling pressure that makes the decline likely to persist.
Crude Oil Nov Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Friday’s bounce helps offers further validation to the 73.90 sell signal being influential, following Thursday’s intraday slide that ended upon touching it. But it doesn’t ensure resuming the rally to its 78.10 target without further delays before triggering its 75.45 buy signal.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
Thursday’s retracement of the recent rally eventually extended Friday morning after gapping up to 3.22. Its reaction more fully tested the room for a pullback down to 3.11. Back above 3.20 should resume the rally.
Mid-day Update… This is chronic.
Morning drop extending through the noon hour.
The post-open bounce up to 2915.50 had soon reversed its test of this morning’s 2911.00 bias-up signal. 
Not recovering it triggered no-bias. Its offsetting test of the morning’s 2900.25 bias-down signal was soon fulfilled.
Meanwhile, the morning’s no-bias environment had yet to lapse.
The bias-down signal should define the no-bias environment’s lower-end. That didn’t prevent the drop from probing lower anyway. It extended down to the morning’s 2893.75 bias-down target, whose break at the bias environment’s exit could have invalidated the retracement requirement. But 2893.75 was only tested.
Probing under this morning’s 2900.25 bias-down signal during the no-bias environment requires being retraced eventually. There’s no particular timing, and its “unfinished business” can remain outstanding indefinitely. Which could be awhile, because there’s nothing bullish about today’s pattern
Extending down through the noon hour has now triggered the afternoon’s 2877.75 bias-down signal’s break is triggering “late bias-down.” Its 2872.25 bias-down signal has been attacked already to within 4 ticks, so it won’t become “unfinished business” if left outstanding. Back above 2880.50 would start to signal momentum reversing up, but be careful, because the alternative could be a meltdown into the weekend.
Look ahead: Economic Calendar – for Mon Oct 8, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Monday’s stock markets are open for the Columbus Day holiday, as are futures — even futures traded for government bonds despite the government bond cash market being closed. Banks are closed, too.
US Holiday: Columbus Day
Banks, Gov’t bond cash markets closed
TD Ameritrade IMX
12:30 PM ET