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 Sep Contract (EC, ETF: (FXE, UUP))
Monday’s upward biased inside day reflects “ineffectual optimism.” Tuesday’s probe of fresh highs above 1.1800 must close back under Monday’s 1.1750 low to confirm, and back under 1.1720 would still signal the trend reversing down.
Gold Dec Contract (GC, ETF: (GLD))
Still fluctuating between 1201.50-1209.50 Tuesday has failed to break either way which would signal the next leg’s direction.
Silver Dec Contract (SI, ETF: (SLV))
Still hovering under the 14.33 buy signal without extending down is not a position of strength, and the pattern remains vulnerable to extending down.
30-year Treasury Dec Contract (US, ETF: (TLT))
Monday’s gap down to 141-08 under all prior lows wanted to be retested from above, which became possible after having bounced into Friday’s range. That had filled the gap back to Friday’s close, neutralizing its attraction and recovery potential. In fact, Tuesday gapped down to and through 141-08 on the way to fresh lows at 140-23.
Crude Oil Oct Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Gapping up to the 69.50 buy signal instead of only probing it intraday from below was no better at extending through it. Tuesday’s high only filled the gap back to the week-old 70.35 high close by a nickel, one of the last two semblances of upside attractions. The second is the prior night’s 71.40 high, which also doesn’t otherwise require a retest. Now closing under 68.35 would signal momentum reversing down.
Natural Gas Oct Contract (NG, ETF: (UNG, UNL))
Gapping up to the adjusted 2.83 buy signal Friday extended higher through 2.87, filling a 3-week old gap up to 2.92. Closing higher Wednesday would help to confirm that momentum had reversed up.
Mid-day Update… Been here, done that (differently).
PROGRAMMING NOTE: MARKET WRAP IS EARLY TODAY AT 3:21 ET.
This morning’s 2912.25 renewed bias-up target wasn’t triggered at 10:15, which had only held a test of the 2907.50 bias-up target. But 2907.50 was exceeded quickly, and it was still a bias-up environment. And 2912.25 was met as the bias environment started lapsing.
The rally extended into a noon surge that touched 2916.25. Coming within 3 ticks of last Friday’s pre-open “new Globex trend extreme” doesn’t neutralize its unfinished business,being a structural point and not calculable. The premature hesitation does reflect pessimism, or at least restrained optimism, in either case bullish from a contrarian perspective.
Now the afternoon has triggered no-bias, holding a test of its 2915.25 bias-up signal. Exiting the window under 2911.25 would start to signal a deeper pullback underway, perhaps only to test 2907.00. Rallying would likely probe 2920.00. Neither is very reliable with volume thinning ahead of Yom Kippur’s observance.
Look ahead: Economic Calendar – for Wed Sep 19, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Another day without high-profile or influential econ reports. And all reports are pre-open. Even before that is the BOJ monetary policy statement coming overnight. But the close may trigger my Wednesday Expiration (WedEX) setup.
Bank of Japan policy statement
overnight
MBA Mortgage Applications
7:00 AM ET
Housing Starts
8:30 AM ET
Current Account
8:30 AM ET
EIA Petroleum Status Report
10:30 AM ET
WedEX
4:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2909.00 | 2915.25 |
| …would target | 2914.50 | 2920.75 |
| Bias-down: under | 2901.75 | 2908.00 |
| …would target | 2896.75 | 2903.00 |
| Signal status: NO-BIAS, TESTED BIAS-UP 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.
Post-open Review… The buys have it.
At least two bullish setups triggered.
Yesterday’s failure to close above 2897.00 was done by proxy. Exiting the next relevant window recovering the next relevant level — today’s opening 15 minutes of volatility, above yesterday afternoon’s 2903.00 last relative high.
Pre-open action had jeopardized the setup. Already touching 2903.00 overnight, and eventually probing it by 1 point, another trade war headline triggered a drop to 2895.50. 
But that allowed us to identify an immediately actionable buy signal above 2901.25 that triggered on the way up to this morning’s 2907.50 bias-up target. Proxy success.
Its reaction down touched this morning’s 2901.50 bias-up signal as a detached bar. That launched another surge to fresh highs attacking 2909.00. The 2907.50 bias-up target wasn’t exceeded in time to renew the bias-up signal. But this is still a bias-up environment, so the 2901.50 bias-down signal should define its low if retested, and extending higher would next target 2912.25.
Of course, the Isolation setup is forming, so long as this morning avoids probing under yesterday’s low. Its minimum objective is to retrace the origin of the pullback’s isolated low, which is Friday’s highs — including the 2917.25 “new Globex trend extreme.”
Similar to last week’s Rosh Hashanah holiday, tomorrow’s Yom Kippur observance will dampen volume and liquidity. That effect will begin this afternoon as participants leave early today for evening services. So, more important to the rally is not whether it extends, but how the afternoon is greeted, which we’ll review later.