Posts by Rod David
Market Wrap (recording & summary)
Tuesday’s unchanged open at the 2928.00-2929.50 range was a helpful early indication that sellers had not gained traction. And sellers had had an excellent opportunity to gain traction, having probed 5 points under Monday’s 2922.50 low. But the drop down to 2917.50 was isolated to the overnight, and a post-open dip to 2924.00 was recovered to fresh highs at 2936.00 at noon.
Then that stopped. Then things changed.
Choppy sideways action through the afternoon tested 2931.00 through the noon hour and recovered 2936.00 at the bias environment high. But the bias environment exit started trending down, and touched the open’s 2924.00 low.
So, just one big sideways range right?
Actually, sellers gained traction by entering the final hour under the bias environment low and then trending down deeper through the 3:10-3:20 proxy window. Their reward is at some point to probe under 2924.00 — either into the close, overnight or Wednesday morning, or some combination — regardless of its durability, degree or resolution.
Which might seem to contradict the position of strength created by mid-day hovering under 2936.00, and managing to close back above 2928.00. And it might ultimately contradict it, by dipping back down to and through Friday afternoon’s 2915.50 lows, where the pattern becomes vulnerable to collapse. Meanwhile, my assumption is that a shallower dip will itself be isolated, and then be retraced to resume the recovery.
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 to fresh lows Tuesday morning positioned the pattern to fulfill the minimum requirement for at least an eventual third lower close, after Monday’s slightly lower low wasn’t decisive enough. Tuesday’s 1.1575 test as support is unreliable support, and its break could target 1.13950-1.1430.
Gold Dec Contract (GC, ETF: (GLD))
Still fluctuating at or around the 1195.00 bounce limit overnight didn’t prevent surging sharply Tuesday morning to test the 1209.50 buy signal. It’s still resistance until recovered, and closing back under 1203.30 would now signal the decline had resumed. Otherwise, closing higher would put into play 1225.50.
Silver Dec Contract (SI, ETF: (SLV))
Monday’s dip back down to uptrending support never reversed momentum down, especially since the test began by a rally stopping pessimistically short of its 14.80 objective, and then gapping down pessimistically. None of which required resuming the rally immediately, or at specific pace, but Tuesday did surge through 14.80 to 14.95 next targeting so long as 14.65 now holds as support.
30-year Treasury Dec Contract (US, ETF: (TLT))
Pre-open firming back up to the 140-10 sell signal extended higher intraday to 140-23, only to be knocked back down to 140-10. A lower close is the minimum requirement to resume the decline.
Crude Oil Nov Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Monday’s surge through the rally’s 73.90-74.25 target area to 75.75 needed to hold 73.90 as support to maintain the rally’s momentum, and now preferably 74.25. The next higher objective in-play is 78.10.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
Gapping up Monday to reject Friday’s dip to the 3.00 pullback held a retest of the original 3.10 target through the close. So, extending higher without delay would be required to avoid forming a top. Already firming pre-open Tuesday extended higher into the afternoon to attack 3.20.
Mid-day Update… Holding up, not held down.
Post-open dip reverses to fresh session highs.
This morning’s no-bias environment tested and retested its 2925.25 bias-down signal, but only after 10:15 when it was too late to trigger. Probing it after 10:30 was “no-bias trending” that required being retraced.
And it was. A surge recovered the open’s 2930.75 high, and ranged around it until the no-bias environment had begun lapsing. Then another surge extended up to 2936.00.
The rally might have extended if not for headlines from a Fed Chair speech that triggered a drop to 2931.00. The knee-jerk reaction has been recovered to attack 2935.00, but this is another no-bias environment. Breaking above its 2937.00 bias-up signal when the window starts lapsing would be entirely credible for extending higher.
Look ahead: Economic Calendar – for Wed Oct 3, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: The econ calendar is busy for a Wednesday, even busier than this week’s Thursday calendar which is usually the week’s busiest. Two pre-open Fed speakers are too early to be reliably influential to price action, unlike the afternoon speakers. Meanwhile, the pre-open ADP report is not only influential, it also gives us insight into the market’s possible reactions to Friday’s payrolls. And post-open reports are likely to duplicate any noticeable reaction to the pre-open ADP.
Charles Evans Speaks
6:30 AM ET
MBA Mortgage Applications
7:00 AM ET
Tom Barkin Speaks
8:05 AM ET
*ADP Employment Report
8:15 AM ET
PMI Services Index
9:45 AM ET
ISM Non-Mfg Index
10:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
*Patrick Harker Speaks
12:00 PM ET
*Loretta Mester Speaks
2:15 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2932.25 | 2937.00 |
| …would target | 2938.25 | 2943.00 |
| Bias-down: under | 2924.75 | 2929.50 |
| …would target | 2919.75 | 2924.50 |
| Signal status: NO-BIAS | . | |
| 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.