Posts by Rod David
Market Wrap (recording & summary)
Tuesday night’s action had warned volatility would be expanding sharply. Which it did, all the way through Thursday’s close. Thursday’s close warned that lower lows were underway, which Friday’s gap up all but rejected. But didn’t exploit, as volatility left early for the weekend.
Thursday night’s relentless rally didn’t extend Friday, but its rejection was limited to just that, not extending. It wasn’t retraced, and only hovered near Thursday’s upper-end. That makes Friday an Inside Day, not very meaningful — but what else is new for a Friday.
The close recovered 2756.00, but not 2767.00, which changes nothing about buyers still not regaining control. However, it does require sellers to prove without much delay that they’re still in control. So, not already trending down after Monday morning would start to make a retest of recent highs likelier.
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))
Gapping up Friday above last Friday’s highs got up to 1.1745 before dipping to fill the gap back down to Thursday’s close under 1.1700. Closing in negative territory would have already signaled momentum reversing down. The dip was recovered intraday, but any close uunder 1.1695 would still signal at least a retest of Wednesday’s 1.5830 pre-open lows.
Gold Aug Contract (GC, ETF: (GLD))
Ending the week on very narrow ranging did not reject Thursday’s resumption of the decline, which is likely to at least probe fresh lows before a recovery attempt can be credible.
Silver Jul Contract (SI, ETF: (SLV))
Opening firm and trending up shallowly Friday filled the gap back up to Monday’s 16.45 close, leaving no reason to delay resuming the decline Monday.
30-year Treasury Sep Contract (US, ETF: (TLT))
Still fluctuating choppily around the 143-16 buy signal does not make it any more or less likely to trigger. But it does raise suspicions for still not having triggered, so the delay is not bullish.
Crude Oil Aug Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
OPEC headlines enabled gapping up Friday from the 65.65 buy signal up to the next buy signal at 67.40, and then extending higher to test 68.80. The likely minimum objective is 70.25.
Natural Gas Jul Contract (NG, ETF: (UNG, UNL))
Thursday’s gap down back to 2.95 stopped short of triggering a sell signal. Friday’s follow-through to 2.92 reacted up to 2.95 to still prevent signaling that momentum is yet reversing down durably.
Mid-day Update… Still holding. (Also, programming note.)
Gap up recovered, not extended.
Buyers proved they bit off more than they could chew by testing too many prior highs at the open. But an attempt to invalidate the 2759.00 bias-up failed. And its 2765.50 bias-up target was retested. Friday morning’s bias signal persisted through the noon hour, and so did the 2759.00-2765.50 trading range.
Now the afternoon has triggered no-bias. Neither bias signal was even touched, and the trading range has only narrowed up to 2765.50. All of which is under the 2767.00 open.
This is not trending. If it were, then Friday afternoon would be extra-vulnerable and even likelier to extend it into the close. That’s still possible, and I would fade fresh session highs only carefully. Very carefully, because of the potential for extending higher.
Back under 2761.50 would start to signal momentum reversing down. That is also a vulnerability, but not a likelihood until actually probing the morning’s lows. Not yet probing the morning’s lows by the final hour’s entry would be difficult to resume the decline today.
MARKET WRAP WILL BE HELD EARLY TODAY AT 3:03 PM ET
Look ahead: Economic Calendar – for Mon Jun 25, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Several Housing sector reports all week are followed the next week by one more, which is an opportunity either to be an outlier or to confirm an outlier. The reports are otherwise high-profile, but have no reliable track record for influencing price action.
Chicago Fed National Activity Index
8:30 AM ET
New Home Sales
10:00 AM ET
Dallas Fed Mfg Survey
10:30 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 | 2763.75 | 2767.00 |
| …would target | 2769.00 | 2772.25 |
| Bias-down: under | 2755.00 | 2758.00 |
| …would target | 2747.50 | 2750.50 |
| Signal status: NO-BIAS | 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.