Posts by Rod David
The First Trade & Pre-open Tour Recording… Pre-Payrolls chop?
Proper context can start the day with a solid win and make all the difference.
DAILY SCHEDULE
First, watch the pre-open Tour recording HERE <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A
Through the prior close…
Dropping back down to Tuesday’s lows overnight had all but ensured that Wednesday’s open wouldn’t gap up. And that was the only way to resume rallying immediately since buyers hadn’t gained traction. More so, Tuesday’s lows — and the overnight retests — had narrowly avoided fulfilling their potential down to 2884.50 or 2880.25. But Wednesday’s first hour took care of that, collapsing down to 2877.50. Oversold RSIs at Wednesday’s low require its eventual retest. Meanwhile, a couple of higher lows formed an Ascending Triangle that broke higher while triggering the afternoon’s 2888.75 bias-up signal. Stopping 2 points short of its 2995.00 bias-up target, the balance of the afternoon only ranged flat-to-lower back down to within 1 tick of 2884.50. Unfinished business was left outstanding at 2877.50 below and 2995.00 above.
Overnight action’s new info…
Wednesday afternoon’s ranging has persisted overnight in a wide, sideways choppiness. First bouncing back up to 2891.00 didn’t hold, and Europe was greeted by dipping back under Wednesday’s lows down to 2882.00. That’s where and when the dip stopped, at least for now, bouncing to attack yesterday afternoon’s highs near 2893.00. Now another dip is probing 3-4 points back into negative territory and attacking yesterday afternoon’s low down to 2885.50.
If, then… (notes to accompany the Tour recording)
Closing at or around 2888.00-2889.00 wasn’t decisive enough to assume whether the next “unfinished business” to be resolved is of 2877.50 below or of 2995.00 above. Testing the lower objective first would at least tell us the weakness since last week has probably been defensive posturing ahead of tomorrow’s payrolls. That’s the more bullish scenario for greeting the news — testing the lower objective, probably down to 2875.00, and bouncing from its test. Meanwhile, 2995.00 could be probed by another 10 points before even beginning to suggest the pullback is being recovered, instead of just corrected temporarily.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2891.25 would be unlikely to trigger the 2895.50 bias-up signal at 10:15. Exiting the open above 2884.50 would be unlikely to trigger the 2882.25 bias-down signal at 10:15.
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2895.00 | 2895.50 |
| …would target | 2902.00 | 2902.50 |
| Bias-down: under | 2881.75 | 2882.25 |
| …would target | 2875.50 | 2876.00 |
| Signal status: NO-BIAS, TESTED BIAS-DOWN SIGNAL | . | |
| 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)
Dropping back down to Tuesday’s lows overnight had all but ensured that Wednesday’s open wouldn’t gap up. And that was the only way to resume rallying immediately since buyers hadn’t gained traction. More so, Tuesday’s lows — and the overnight retests — had narrowly avoided fulfilling their potential down to 2884.50 or 2880.25. But Wednesday’s first hour took care of that, collapsing down to 2877.50.
Oversold RSIs were left outstanding at Wednesday’s low, requiring its eventual retest. That didn’t prevent a couple of higher lows from forming an Ascending Triangle. Its breakout triggered the afternoon’s 2888.75 bias-up signal, but stopped 2 points short of its 2995.00 bias-up target. That’s now unfinished business above since Wednesday afternoon only ranged flat-to-lower back down to within 1 tick of 2884.50.
Closing at or around 2888.00-2889.00 isn’t decisive enough to assume whether the next test is of 2877.50 below or of 2995.00 above. But testing the lower objective first — probably down to 2875.00 — would tell us the weakness since last week has probably been defensive posturing ahead of Friday’s payrolls.
There was no Market Wrap today due to travel.
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 Sep Contract (EC, ETF: (FXE, UUP))
Tuesday’s gap down had held the 1.1550 week-old gap it filled, and bounced back to almost unchanged. Lower objectives remain outstanding, but that didn’t prevent the obligatory bounce from probing higher Wednesday. The decline is likely to resume so long as 1.1675 isn’t recovered.
Gold Dec Contract (GC, ETF: (GLD))
Tuesday’s gap down from a multi-session range had triggered a breakout. But Wednesday’s bounce failed to confirm with a second consecutive lower close. There’s still room above to 1206.00-1207.50 while still being likelier to reverse down to lower objectives at 1272.50.
Silver Dec Contract (SI, ETF: (SLV))
Wednesday’s flat-to-higher ranging wasn’t going to launch a recovery from Tuesday’s gap down under all prior lows, which will want to be retested from above, assuming the decline hasn’t already extended.
30-year Treasury Dec Contract (US, ETF: (TLT))
Wednesday’s gap up only touched the 143-18 sell signal that was broken already on Tuesday. The gap up was reversed quickly down to fresh lows at 142-28, but the balance of the session only ranged narrowly at Tuesday’s 143-02 low.
Crude Oil Oct Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Already probing under the 69.50 pullback limit after Tuesday’s close, gapping down Wednesday extended down to 68.75. Thursday’s (delayed) EIA report is not being greeted from a position of strength, and could be weaker only had Wednesday’s break been confirmed already. Retesting Tuesday’s 71.40 pre-open high would likely form a durable top.
Natural Gas Oct Contract (NG, ETF: (UNG, UNL))
Tuesday’s gap down had rejected Friday’s gap up that closed above its 2.87 buy signal. Extending down deeper Wednesday to 2.78 has confirmed a reversal, now requiring at least an eventual third lower close.
Look ahead: Economic Calendar – for Thu Sep 6, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: It’s payrolls week, so private sector jobs data that is released earlier can help us to shape expectations for Friday. Meanwhile, it’s a holiday-shortened week, so three looks at employment are staggered before Thursday’s open. And any obvious reaction to them will likely be duplicated in reaction to any of the several post-open reports, or to the Fed speaker.
Challenger Job-Cut Report
7:30 AM ET
*ADP Employment Report
8:15 AM ET
Jobless Claims
8:30 AM ET
Productivity and Costs
8:30 AM ET
PMI Services Index
9:45 AM ET
*John Williams Speaks
10:00 AM ET
Factory Orders
10:00 AM ET
ISM Non-Mfg Index
10:00 AM ET
EIA Natural Gas Report
10:30 AM ET
EIA Petroleum Status Report
11:00 AM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET