Posts by Rod David
Market Wrap (recording & summary)
A funny thing happened on the way to fulfilling Wednesday morning’s bias-down signal.
Its 2851.00 bias-down target was attacked to within only 2 points when price began suddenly reversing up. The bias environment started lapsing after a surge up to 2860.00 and 2861.00, leaving “unfinished business below” at 2851.00.
Assuming 2851.00 is eventually met, the market is likely to compensate for its delay by extending down to the next lower support at 2841.00-2843.00.
Reversing down anytime soon may seem like an odd discussion after extending even higher through Wednesday afternoon. But the 3:10-3:20 proxy window tried, and failed to gain traction. Then a fresh high at 2862.50 was reversed back under the proxy window’s 2860.25 low. Which could have been a compelling hold-short.
And then price collapsed.
Plunging through Wednesday’s close settled 1 point under 2856.00, which had been the overnight low and the morning’s bias signal. The intraday bounce seems more clearly to have been a detour. And 2851.00 seems more clearly to still be in-play.
2851.00 can be fulfilled, and held, overnight. Regardless, gapping up Thursday above Wednesday’s 2861.00-2862.50 highs would resume the rally. Upside potential would still be 2873.00-2883.00.
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))
Probing above Tuesday range overnight up to 1.1662 was rejected enough for Wednesday’s open to gap down to Tuesday’s low at the 1.1615 sell signal. The signal held, but its reaction remained within Tuesday’s range. Resolving down remains likely so long as Tuesday’s 1.1640 high holds as resistance.
Gold Dec Contract (GC, ETF: (GLD))
Wednesday’s interim weakness was recovered intraday. The downside momentum remains intact unless 1229.00 were recovered on a closing basis.
Silver Sep Contract (SI, ETF: (SLV))
Dipping again Wednesday morning came the closest yet to neutralizing the 3-week old gap down at 15.25, which has been tested only overnight, and continues to inhibit a recovery. The continued delay and repeated “ineffectual optimism” suggests a deeper probe of fresh lows, first.
30-year Treasury Sep Contract (US, ETF: (TLT))
Still not reacting back up from the 142-18 sell signal, let alone back above the 143-02 buy signal, further suggests — if not confirms — that Monday’s momentary probe above 143-02 was a false break that stretched the rubber band to snap back down.
Crude Oil Sep Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Tuesday’s inside day and second consecutive session above the 68.35 pullback limit didn’t prevent gapping down Wednesday and trending down sharply through the morning .
Natural Gas Sep Contract (NG, ETF: (UNG, UNL))
The 2.93-2.95 target was fulfilled early Wednesday, which creates a little vulnerability ahead of Thursday’s EIA report. But not as much vulnerability as the position of strength of greeting the news from fresh highs. A knee-jerk reaction down would be likely to recover.
Mid-day Update… Too much ballast.
Attempted liftoff still barely hovering.
This morning’s detour ultimately bounced up to 2861.00. The 2851.00 bias-down target was only attacked to within 2 points, which does not qualify as fulfilling it. So, it becomes “unfinished business below.”
Any interim bounce should be only noise. Noise within negative territory, like this morning’s bounce (RSIs diverged negatively during the momentary probe above 2859.00-2860.00). Noise up to this afternoon’s 2862.25 bias-up signal during the no-bias environment.Noise back up to yesterday’s high under 2864.00.
Any higher would not be noise. So, any higher would be unlikely. And any higher would be problematic to the likely downside resolution. We’ll address that if it develops.
Meanwhile, ineffectual optimism has a cost. The market might compensate for the detour by probing under 2851.00. Or by breaking to the next lower support at 2841.00-2843.00. We’ll address that, too, if it develops.
Look ahead: Economic Calendar – for Thu Aug 9, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: A couple of high-profile econ reports before Thursday’s open, both being high-profile, and one being reliable for influencing price action. The week’s second Fed speaker coincides with the regular open, which could magnify the impact of any surprising statement he makes. Like Wednesday’s 10-year note auction, Thursday afternoon’s 30-year auction comes at an interesting point in the bond market’s chart.
Jobless Claims
8:30 AM ET
*PPI-FD
8:30 AM ET
*Charles Evans Speaks
9:30 AM ET
Wholesale Trade
10:00 AM ET
EIA Natural Gas Report
10:30 AM ET
30-Yr Bond Auction
1:00 PM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET
Afternoon Bias
| WED afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2862.25 | 2862.25 |
| …would target | 2867.75 | 2867.75 |
| Bias-down: under | 2855.75 | 2855.50 |
| …would target | 2850.50 | 2850.25 |
| 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.