Posts by Rod David
Market Wrap (recording & summary)
Sellers needed to control Thursday’s open if they were going to control the morning. They tried — dipping to the morning’s 2858.50 bias-down signal before the open — but that was rejected by the first hour’s surge to test the 2868.50 bias-up signal to its 2869.50 room for noise.
The next hour collapsed to fresh lows testing 2855.00. Was it an anomaly, or a detour, or refueling for the rally? It’s difficult applying any of those labels, when the entire session only ranged choppily at the lows.
A third consecutive session has left no unfinished business above. Thursday even tested and held what was unofficially in-play, an offsetting test of the morning’s bias-up signal. So, once again, trending up Friday morning beyond Thursday’s range would all but require gapping up. A lot. Meanwhile, avoiding a bounce of any sort Friday should begin by trending down into and/or out of the open.
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 Sep Contract (EC, ETF: (FXE, UUP))
Wednesday’s “ineffectual optimism” that briefly probed above the rally’s 1.1625 target was reversed into Thursday afternoon down to 1.1550. Its likely minimum objective is to fill the gap outstanding from the 3-week old open under all prior lows at 1.1475, and potentially correct into the consolidation of the lows down to 1.1405.
Gold Dec Contract (GC, ETF: (GLD))
Reversing down from Wednesday’s opening gap up to 1207.50 resistance retested the 1195.00 buy signal and extended lower, attacking 1191.50 whose break would target 1172.50 and possibly also an intraday retest of the 1167.00 overnight low.
Silver Sep Contract (SI, ETF: (SLV))
Having failed to close above Wednesday’s test of 14.80, overnight weakness greeted Thursday’s open at or under the 14.63 sell signal and extended to within a nickel of filling the week-old gap back down to 14.45. Filling it may not hold initially, but it would be optimal before launching a recovery.
30-year Treasury Sep Contract (US, ETF: (TLT))
Only momentarily piercing the 145-23 high of Wednesday’s “ineffectual optimism” overnight did not qualify as breaking through it, nor did Thursday morning’s brief piercing of it. But neither suggested that Wednesday’s fresh highs were being rejected, which can be bullish when confronted with ineffectual optimism.
Crude Oil Oct Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Wednesday’s rally to 68.00 was probed only briefly overnight, stopping short of its next higher objective at 68.32. Thursday’s open was back within Wednesday’s range, as was the entire session.
Natural Gas Sep Contract (NG, ETF: (UNG, UNL))
Thursday’s EIA report was not greeted from a position of strength, but its knee-jerk reaction down was very shallow and very brief, and recovered into positive territory to attack prior highs up to 2.98. Closing any higher Friday would be entirely credible — if not also the minimum requirement — to extend the rally instead of pulling back to 2.85.
Mid-day Update… Hunkering down.
Still absorbing the opening rally’s failure.
Although this morning’s 2858.50 bias-down signal was last touched 3 minutes prior to the open, an offsetting test of its 2868.50 bias-up signal did develop.
Its room for noise up to 2869.50 was pierced by 1 tick as the rally peaked. Its reaction down had collapsed to 2855.00 as the bias window began lapsing at 11:30. The catalyst was apparently more China currency intervention.
Again, there’s no unfinished business above. Resistance that neutralizes buying pressure is being tested and held. And responsive.
None of which has resumed the reversal down. Not, yet. But this afternoon’s 2863.00 bias-up signal wasn’t even attacked. Another corrective bounce to 2866.00 could develop if the decline isn’t trying to resume when the afternoon bias window begins lapsing at 2:30.
Look ahead: Economic Calendar – for Fri Aug 24, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s pre-open econ report is unique for this week, being high-profile while also being reliable for influencing price action. The Fed Chair’s post-open speech is already widely anticipated one week earlier, and watching it may be influential as well.
*Durable Goods Orders
8:30 AM ET
*Jerome Powell Speaks
10:00 AM ET
Baker-Hughes Rig Count
1:00 PM ET
Afternoon Bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2862.50 | 2863.00 |
| …would target | 2867.75 | 2868.25 |
| Bias-down: under | 2851.75 | 2852.50 |
| …would target | 2845.50 | 2846.25 |
| Signal status: NO-BIAS | . | |
| 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.