Posts by Rod David
Market Wrap (recording & summary)
Friday was all about Thursday, apparently. Maybe not all about it, but Thursday’s signals were influential.
Thursday’s buyers had gained traction that earned the reward of probing higher Friday morning. Gapping up Friday to 2730.00 extended higher through the bias environment to 2745.50. The balance of the session was spent retracing the post-open gains. Until that was completed during the position-squaring window. Which then extended back under Thursday’s 2726.25 high. And still had time to touch 2720.75.
Thursday’s close had dipped back under 2718.00 to prevent signaling the rally had reversed up. This doesn’t prevent another attempt, but dooms that attempt to failure. Retracing back to the open’s gap up would have qualified as doom, but also required gapping down Monday. Retracing back within Thursday’s range increases the vulnerability to gapping down.
Friday’s intraday setups were also influential. Mostly for what they did that wasn’t required. Like break under the afternoon bias environment’s isolated low, after its shorts were trapped. That’s new sponsorship. Or, like collapsing back under the opening gap. That’s rejection.
Thursday’s bounce was not itself reversed, or even rejected. But Monday’s resolution to Friday afternoon’s drop should be predictive of the market’s next move.
Details and other markets coverage are discussed in the post-market Wrap recording here.
REMINDER: NO SATURDAY REVIEW THIS WEEKEND.
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))
Gapping up Friday to 1.1700 extended to test 1.1745. Extending any higher would target 1.1845-1.1860. Closing back under 1.1700 would target fresh lows under 1.1595.
Gold Aug Contract (GC, ETF: (GLD))
Having fulfilled its minimum objective of a third lower close on Thursday, Friday had become more vulnerable to bouncing. It firmed, still having potential for fresh lows down to 1245.50 or 1237.50.
Silver Sep Contract (SI, ETF: (SLV))
An overnight pullback to 16.00 made a higher low before extending above Thursday’s highs to test 16.20. The price and pattern are appropriate for a corrective bounce to be ending. Otherwise, extending any higher aggressively would suggest that a bigger bounce is underway.
30-year Treasury Sep Contract (US, ETF: (TLT))
Flat, narrow ranging overnight became flat-to-higher ranging Friday. Breaking back under 144-26 would still launch a much deeper reaction down, and probably not only a temporary correction.
Crude Oil Aug Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
A shallow pullback overnight held the newly adjusted shallow pullback limit at 72.90 before firming to a fresh high intraday attacking 74.45, and still targeting 75.30.
Natural Gas Aug Contract (NG, ETF: (UNG, UNL))
Gapping down Friday extended Thursday’s reaction down further under 2.96 to signal momentum reversing down.
Mid-day Update…Hovering.
Morning rally hasn’t extended.
A funny thing happened since this morning’s rally up to 2745.50… Nothing.
That is, no higher highs, not during the noon hour, or thus far into the afternoon bias environment. 
The latter hasn’t even breached the former. Sorry, the noon hour’s 2743.00 lower high hasn’t been retested.
But that’s just one nothing. The other nothing is no lower lows. The noon hour’s 2735.00 low barely attacked the post-open low.
So, the rally’s sponsorship is expending all of its energy just to avoid reversing. Which isn’t very decisive any other day. But today is Friday, when fresh highs during the afternoon bias environment tend to extend through the close. Not exploiting that opportunity is almost tantamount to being a sell signal.
Much more tantamount to being a sell signal would be exiting the bias environment by breaking under its 2736.75 bias-down signal. It’s being tested now, and its break needs just a little more delay to avoid being no-bias trending.
Look ahead: Economic Calendar – for Mon Jul 2, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Monday’s calendar almost hits a trifecta, with 3 manufacturing and construction reports due post-open. The second two are simultaneously released, and they would likely duplicate any obvious reaction to the first.
*PMI Manufacturing Index
9:45 AM ET
*ISM Mfg Index
10:00 AM ET
*Construction Spending
10:00 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
Afternoon Bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2742.00 | 2743.75 |
| …would target | 2748.75 | 2750.50 |
| Bias-down: under | 2735.25 | 2736.75 |
| …would target | 2629.25 | 2730.75 |
| Signal status: NO-BIAS, TESTED BIAS-DOWN SIGNAL | FAQ | |
| Flowcharts: Bias-UP // Bias-DN INTRO VIDEOS #1 and #2 |
||
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.