Posts by Rod David
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))
The break under 1.1725 had ended Wednesday testing the 1.1700 sell signal. It broke sharply lower Thursday to fulfill its objective, filling the two-week old gap down at 1.1636. That’s attacking the lower-end of two-month long Descending Triangle, so a recovery can’t afford to be delayed while the pattern is vulnerable to launching a significant downleg.
Gold Dec Contract (GC, ETF: (GLD))
There was already no bullish reason for Wednesday to have retested 1225.00, which Tuesday’s spike down had neutralized already. But Thursday gapped down through 1225.00 and extended lower intraday to test prior lows and 1220.00. This is similar to a confirmed breakout, and at least an eventual third lower close is likely.
Silver Sep Contract (SI, ETF: (SLV))
Returning Wednesday to the 15.40 sell signal wasn’t quick to break under it Thursday, barely probing under it through the morning. A delayed reaction would be likely Friday if the break is valid.
30-year Treasury Sep Contract (US, ETF: (TLT))
Thursday’s gap up to Wednesday’s 142-16 high soon reacted down almost a half-point, which was more than enough to fill the gap back down to Wednesday’s close — a close that otherwise would inhibit a recovery. A recovery isn’t signaled, not without at least closing Thursday back above 142-12/142-16 to greet Friday’s Employment Situation report from a position of strength. But there would be no “unfinished business below.”
Crude Oil Sep Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Thursday’s price action essentially confirms the recent dip was only a temporary correction. An overnight dip attacking 66.90 was already reversing up to greet Thursday open at 67.25. The reversal soon extended sharply test 69.35. Just closing above 68.35 already signals momentum is reversing up, presumably targeting 71.25.
Natural Gas Sep Contract (NG, ETF: (UNG, UNL))
Still testing 2.76 at Wednesday’s close had prevented greeting Thursday EIA report from a position of weakness. It wasn’t necessarily a position of strength, but the knee-jerk reaction surged to attack Tuesday’s 2.83 high. Closing higher Friday would suggest the pullback avoided reversing the trend down.
Mid-day Update… Runaway.
REMINDER: I’m away from the screens for today’s last half-hour. Market Wrap will be held a half-hour early at 3:03 ET.
Having rejected tests of both bias-down parameters this morning, offsetting tests of both bias-up parameters were put into play. 
Triggering late — by the grace period — made the upside objectives only likely instead of required. But extending to fresh highs through 10:30 had at least confirmed the no-bias.
Reacting down along the way from 2812.50 had potential to 2801.50. Stopping short at 2804.50 and still triggering another buy signal as the bias environment began lapsing made the offsetting tests likely today. And now they’ve been probed up to 2828.50.
The overnight low was 2891.00.
That’s a lot of buying pressure. And a lot of optimism, especially ahead of tomorrow morning’s pre-open Employment Situation report. It follows a lot of selling and pessimism, so maybe buyers aren’t relatively extended. And they’ve overcome the 2815.50-2822.00 targets. Currently, this afternoon’s 2822.00 bias-up target was exceeded in time to renew the bias-up signal. It’s next target is 2828.50-2831.00, the lower-end now being touched.
Today is not a “session-long rally” setup, so there’s no assurance of extending higher. But even if we knew with 100% certainty that today’s high has printed, there’s also no assurance of reversing down, instead of simply drifting sideways through the close.
Look ahead: Economic Calendar – for Fri Aug 3, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday morning’s pre-open Employment Situation report is essentially released in a vacuum, which has become less common. So, its effect on price action can be more significant. The post-open reports aren’t reliable for influencing price action on their own, but any reaction should duplicate the pre-open report’s reaction.
*Employment Situation
8:30 AM ET
International Trade
8:30 AM ET
PMI Services Index
9:45 AM ET
ISM Non-Mfg Index
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 | 2815.00 | 2815.50 |
| …would target | 2821.50 | 2822.00 |
| Bias-down: under | 207.50 | 2808.25 |
| …would target | 2801.75 | 2802.50 |
| Signal status: BIAS-UP, BIAS-UP TARGET EXCEEDED | FAQ | |
| Flowcharts: Bias-UP // Bias-DN INTRO VIDEOS #1 and #2 |
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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.
Post-open Review… Digging in, instead of just digging.
PROGRAMMING NOTE: I’m away from screens for today’s last half-hour. Market Wrap will be held 30 minutes early.
A different crowd showed up at the open. The 2791.00 overnight low had been retraced already to attack 2799.00. Opening at 2797.50 immediately blipped down, but only blipped down. Soon, the pre-open retracement was resuming, and at a steeper slope.
2801.50 certainly was not isolated. It wasn’t even touched during the opening 15 minutes of volatility. But it was recovered on the way up to the 2807.50 bias-down signal. Touching it in time to invoke the grace period then extended to 2810.50 triggering “late no-bias.” That’s now being probed up to 2812.50.
Offsetting tests of both bias-up parameters is in-play. Likely, but not a requirement. Even if required, not assured of avoiding an interim corrective dip. Especially since testing 2801.50 was isolated not to the overnight, and not to the opening 15 minutes of volatility but only to the first half-hour. That’s not optimal, so this recovery attempt is vulnerable.
Back under 2707.50 would start to signal a retest of 2801.50 underway. Meanwhile, testing the 2815.50 bias-up signal only 3 points higher would neutralize its attraction.