Posts by Rod David
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2919.50 | 2924.50 |
| …would target | 2925.75 | 2930.75 |
| Bias-down: under | 2911.25 | 2916.25 |
| …would target | 2904.50 | 2909.50 |
| Signal status: LATE NO-BIAS, BIAS-DOWN SIGNAL TESTED | . | |
| 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)
Wednesday afternoon’s plunge to 2907.50 cannot form a durable bottom without being retested. We knew this at Thursday’s open, despite it gapping to and through what had been “lower prior highs” at 2914.00, and extending above 2919.00. This downside requirement continued despite extending higher through the bias environment, into and out of the noon hour. up to 2932.00.
And the downside requirement under 2907.50 remains likely, despite already dropping 15 points from Thursday’s high to attack 2917.00. That’s a lot of selling pressure to expend in a short time frame, and to still have downside. But Thursday afternoon’s sellers gained traction — exiting the bias environment under the noon hour’s low and entering the final hour even lower. Friday morning is likely to trend lower, if not isolated to the overnight.
Meanwhile, Thursday’s close did recover 2914.00 and (barely) 2919.00. Probing lower on Friday would originate from a position of strength. Whether done overnight or during the morning, a recovery is likely. Probing lower without recovering would instead point sharply lower.
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))
Thursday’s gap down and intraday downtrending is a breakout from the five-day multi-session range that had developed between 1.1815-1.1855. The 1.1735 last relative low was touched, which a second consecutive confirming lower close Friday would also break. Not extending down Friday would undermine the topping pattern, and instead be more likely to back-and-fill back to last week’s highs.
Gold Dec Contract (GC, ETF: (GLD))
Wednesday’s close under the 1201.50 sell signal extended sharply lower Thursday morning to attack 1185.50, confirming the breakout. A 5-6 week old gap outstanding from 1184.50 could offer some obligatory support. But the drop is meanwhile targeting overnight lows to at least 1172.50.
Silver Dec Contract (SI, ETF: (SLV))
Thursday’s open gapped to and through 14.33, back down to the uptrending channel’s lower-end at 14.20. A second consecutive lower close on Friday would confirm a new downleg underway.
30-year Treasury Dec Contract (US, ETF: (TLT))
Wednesday’s FOMC statement was greeted at 140-04 and its reaction probed higher to 141-03. Thursday morning’s reaction to at least two high-profile econ reports erased the gain, and threatens to already end the corrective bounce and resume the decline.
Crude Oil Nov Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Gapping up Thursday back into the range helps to confirm Wednesday’s dip didn’t reverse the trend down, and that the 73.90-74.25 upside objective remains intact.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
[Rolling coverage forward to Nov, which trades at a 2-cent discount from Oct]… Wednesday’s drop from the 3.06 high down to 2.96 didn’t prevent greeting Thursday’s EIA report from a position of strength. Its reaction did surge, probing fresh highs to 1-cent above the 3.10 objective. Pullbacks must hold 3.00 as support to maintain upside momentum.
Mid-day Update… Maxxed out.
Limits of a corrective bounce are met.
The 2907.50 low of yesterday’s drop is likely to be probed at some point before a durable recovery develops. So, interim bouncing is likely to be only a temporary correction. A bigger and bigger bounce would start to suggest otherwise, but not arbitrarily — not without recovering some relevant level through a relevant window.
It helps to begin from a relevant level, too, like from recovering 2914.00 and 2919.00 through this morning’s open. Even that only produces a position of strength, which makes another drop likely to recover… for example, from retesting 2907.50.
Anyway, today’s bounce has extended through its 2927.00 renewed bias-up to attack this afternoon’s 2933.25 bias-up target. The probe above 2927.00 was isolated to the noon hour. And “late no-bias” just triggered for this afternoon’s bias environment.
Nothing requires extending this morning’s rally. Not extending higher would be vulnerable at least to backing-and-filling Extending higher anyway could retest Friday’s 2945.25-2947.00 highs, and still be vulnerable to reversing down.
Look ahead: Economic Calendar – for Fri Sep 28, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s two post-open reports are each reliable for influencing price action. More so, the PMI is released privately to its institutional subscribers, and any price reaction tends to be duplicated by the public release several minutes later.
Personal Income and Outlays
8:30 AM ET
*Chicago PMI
9:45 AM ET
*Consumer Sentiment
10:00 AM ET
Baker-Hughes Rig Count
1:00 PM ET
John Williams Speaks
4:45 PM ET