Posts by Rod David
The First Trade & Pre-open Tour Recording… Back to square <-1>.
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…
Friday’s gap down to 2897.50 only attacked Thursday’s 2902.00 close, holding the 2898.25 bias-down signal. Its reaction quickly fulfilled the bias objective, an offsetting test of the 2907.50 bias-up signal. But just opening within the range of Thursday’s lows had made lower lows likely, probably down to unfinished business below at 2892.25. Which trending back down into the noon hour fulfilled. The afternoon ranged sideways at the lows again, keeping alive potential for extending down deeper to 2884.50 or 2880.25. Trade headlines inhibited any trending, until Canada’s trade negotiator held her press conference as the close rallied up to 2906.00. No traction was gained, and no new “unfinished business” was left outstanding.
Overnight action’s new info…
Closed US markets and no news from Asia on Sunday night (having no audience for its news) left Europe’s opens more influential. Until then, price had ranged flat-to-lower to 2903.00. But a surge at Europe’s opens tested 2910.00 and eventually extended up to 2912.50. All of which was retraced to attack 2910.00 into Monday’s Globex close. Monday night’s Globex open has been a round-trip — first, testing Friday’s low down to 2902.00 and bouncing again to test 2912.00, then returning back down to Friday’s lows. Typical 3-day holiday weekend stuff, until getting aggressive, now sliding sharply to 2892.00.
If, then… (notes to accompany the Tour recording)
REMINDER: I’m traveling this week, and will have a staggered intraday schedule after the Market Tour and opening hour… The week was likely to begin with a struggle between an attraction below, and unfinished business above at 2918.00. Two rally attempts Sunday and Monday nights stopped 6 points short of 2918.00, which suggests two things — that potential for a deeper pullback remains alive, and that eventually resuming the rally should probe even higher. So, that deeper pullback is underway if Tuesday’s open doesn’t hold Friday and Monday night’s 2901.75-2902.75 lows. That’s compared to Friday’s 2901.00 cash session closing equivalent. Similarly, almost anything holding above Friday’s 2906.00 futures close should be bullish.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2903.00 would be unlikely to trigger the 2904.50 bias-up signal at 10:15. Exiting the open above 2897.50 would be unlikely to trigger the 2895.50 bias-down signal.
Look ahead: Economic Calendar – for Tue Sep 4, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: At least two reports among Tuesday morning’s triple-whammy of industrial data are reliable for influencing price action. The morning’s Fed speaker just spoke Monday afternoon during closed markets, so his influence on price action should be limited.
*PMI Manufacturing Index
9:45 AM ET
*ISM Mfg Index
10:00 AM ET
Construction Spending
10:00 AM ET
*Charles Evans Speaks
10:30 AM ET
4-Week Bill Auction
11:30 AM ET
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2904.25 | 2904.50 |
| …would target | 2910.75 | 2911.00 |
| Bias-down: under | 2895.00 | 2895.50 |
| …would target | 2887.50 | 2888.00 |
| Signal status: noN-BIAS, STILL TESTING BIAS-DOWN SIGNAL, BIAS-DOWN TARGET MET | . | |
| 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)
REMINDER: I’m traveling next week, and will have a staggered intraday schedule after the Market Tour and opening hour.
Well, that was interesting. And useful, as a reminder of the difference between context and timing. The context was an overnight range at Thursday’s lows, showing no interest in rejecting Thursday afternoon’s plunge. Lower lows were likely, probably down to unfinished business below at 2892.25.
But the open bounced, at least enough to probe above the 2898.25 bias-down signal. And then enough to trigger a buy signal. And then enough to fulfill the bias objective, an offsetting test of the 2907.50 bias-up signal.
And in time to invoke the grace period. Which held the bias-up signal, putting into play an offsetting test of its bias-down signal… back down to 2898.25. Which was probed to fresh lows, including 2892.25, as the contextual clues had suggested.
Such is the volatility vulnerability of thinning volume. It’s a little surprising not have extending deeper to 2884.50 or 2880.25 compensating for the delay. Its test clearly wasn’t necessary to allow Friday’s late rally up to 2906.00 as Canada’s trade negotiator held her press conference. So, the new week will begin with a struggle between an attraction below, and unfinished business above at 2918.00.
Details and other markets coverage are discussed in the post-market Wrap recording here.
NO SATURDAY REVIEW THIS WEEKEND… ENJOY THE LABOR DAY HOLIDAY!
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))
Still overlapping the 1.1675 sell signal into Friday’s open immediately extended to a fresh pullback low testing 1.1600. Closing any lower would confirm the trend has reversed down.
Gold Dec Contract (GC, ETF: (GLD))
Cleanly triggering the 1207.50 sell signal Thursday didn’t extend down any deeper than Thursday afternoon’s 1202.00 low before rallying overnight to attack 1215.00. That reacted back down under 1207.50, which remains intact.
Silver Dec Contract (SI, ETF: (SLV))
Thursday’s 14.82 sell signal was probed that day down to 14.55, but no lower overnight. Friday was almost an inside day, but dipped lower into the afternoon, as the sell signal’s momentum remains intact.
30-year Treasury Dec Contract (US, ETF: (TLT))
[Rolling coverage forward to Dec, which trades at a 18-tick discount from Sep]…. Thursday’s failure to reinstate Tuesday’s break lower to 144-10 was rewarded by extending the bounce into and out of Friday’s open up to 145-16. Closing back under 144-26 would trigger another attempt to resume the decline.
Crude Oil Oct Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Coming to within a nickel of the 70.55 minimum bounce objective Thursday already created a reaction down without yet touching 70.55. It remains in-play, with potential to extend higher through 72.00, so long as 69.50 holds pullbacks.
Natural Gas Oct Contract (NG, ETF: (UNG, UNL))
Testing the 2.87 buy signal for a second consecutive close finally broke higher overnight, gapping up at Friday’s open and extending higher to 2.93. Leaving the gap outstanding below is not optimal to extending higher near-term, but it forms support below that helps to prevent a reversal down from extending.