Posts by Rod David
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2907.00 | 2907.50 |
| …would target | 2913.50 | 2914.00 |
| Bias-down: under | 2897.50 | 2898.25 |
| …would target | 2891.75 | 2892.25 |
| Signal status: NO-BIAS. TESTED BIAS-UP SIGNAL, ALREADY 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)
The recent tradition of morning trending into afternoon ranging was reversed Thursday. Gapping down ranged choppily sideways, and an afternoon retest of the morning’s high reacted down sharply.
Granted, the afternoon’s plunge was a headline reaction. And the morning’s bias window exit was probing fresh session lows. But sellers gained traction for their efforts, exiting the afternoon bias window and entering the final hour under their prior timing window’s lows.
Nevertheless, “unfinished business” was left outstanding above at the afternoon’s 2818.00 bias-up target. Which would be an attraction, especially if Friday’s open is gapping up above Thursday afternoon’s 2913.00 high, which is definitely possible if Friday isn’t extending Thursday’s drop to unfinished business below at 2892.25.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
Mid-day Update… Risks of an illiquid environment.
New tariffs news triggers plunge.
Today’s signals have probably been impacted by volume contracting ahead of the 3-day holiday weekend. This morning barely triggered noN-bias, and used the aimless environment to range choppily sideways.
Now this afternoon’s cleanly triggered 2911.00 bias-up signal has stalled under 2913.00, and then collapsed to 2899.00. The stalling may have been related directly to volume, but the collapse is indirectly related — the low-volume environment has magnified the reaction to a China trade war tariff headline.
It’s too late to exit the bias window under its 2895.50 bias-down target, so the 2918.00 bias-up target becomes “unfinished business” above. Back above 2903.00 (being tested now) could start that recovery. But back under 2900.00 would more likely extend the decline.
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))
Thursday quickly dipped to retest Wednesday’s low, which itself had touched the 1.1675 sell signal. Its break would leave no unfinished business above, and initially target 1.1445.
Gold Dec Contract (GC, ETF: (GLD))
Breaking through the 1207.50 sell signal Thursday only attacked 1202.00, still targeting 1191.50 and probably 1172.50.
Silver Dec Contract (SI, ETF: (SLV))
[Rolling coverage forward to Dec, which trades at a 13-cent premium to Sep]… Thursday’s open was greeted trending down from the 14.82 sell signal that was tested throughout Wednesday.
30-year Treasury Sep Contract (US, ETF: (TLT))
Wednesday’s failure to confirm Tuesday’s break under 144-19 was extended by bouncing further Thursday. Last-minute sentiment ahead of next Friday’s Employment Situation report is likely having an effect, but the news is not being greeted from a position of weakness that would have been reliable to react negatively.
Crude Oil Oct Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
The rally extended to within a nickel of its 70.55 minimum corrective bounce objective. Reversing down wouldn’t be credible until the target is fully tested, and the corrective bounce could meanwhile extend higher. But closing under 69.50 would suggest that a bounce peak is forming.
Natural Gas Oct Contract (NG, ETF: (UNG, UNL))
Wednesday’s bounce from retesting the decline’s 2.82 target failed again to close above 2.87 and reverse momentum up. It was being tested at the close, but the decline remains vulnerable to extending.
Look ahead: Economic Calendar – for Fri Aug 31, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s calendar is thin, but heavy. Both of its econ reports are both high-profile and reliably influential. And both are post-open, potentially interfering with price action –inhibiting ahead and exaggerating behind. PMI is released privately to its institutional subscribers, and any price reaction tends to be duplicated when released publicly several minutes later. Consumer Sentiment’s impact probably won’t be much unless it deviates from the recently steady stream of strong consumer readings.
*Chicago PMI
9:45 AM ET
*Consumer Sentiment
10:00 AM ET
Baker-Hughes Rig Count
1:00 PM ET