Posts by Rod David
Market Wrap (recording & summary)
Thursday’s Isolation setup wasn’t very productive. But it prevented a resumption of overnight selling. Isolating the overnight probe of Wednesday’s lows puts into play a retest of Wednesday’s 2796.00 high. Unfinished business is already left outstanding from 2798.00. Thursday morning’s backing-and-filling was usual for the setup, but no afternoon rally was unusual. Nevertheless, fresh highs remain likely so long as Wednesday’s lows hold.
Already rallying overnight to within proximity of the highs would be vulnerable to an early rejection of probing prior highs. That pattern has been absent for a couple of sessions. A hold-long setup narrowly avoided triggering, but almost any overnight strength would be credible for extending.
Meanwhile, we’ll assume the bearish WedEX is intact. It wasn’t triggered decisively at Wednesday’s close, so not rejecting it decisively at Thursday’s open — i.e. only opening at the level whose recovery would have been decisive — keeps the door open to trending down Friday afternoon and more so Monday morning.
Being a Friday, the Friday Factors will be relevant. The morning’s bias tends to persist through Friday’s noon hour. Sponsorship is difficult to generate, while counter-trend sponsorship is more difficult. And a new trend extreme close, which is nearby, would entrench the trend. It’s the rare expiration session that reverses intraday, but they are very productive when they occur.
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 Jun Contract (EC, ETF: (FXE, UUP))
Bouncing back to resistance overnight didn’t prevent the reaction to Thursday’s ECB statements from plunging through the 1.1745 sell signal to fresh lows attacking 1.1590, probing into the 3-week old low’s session and targeting the gap back to that session’s 1.1550 close.
Gold Aug Contract (GC, ETF: (GLD))
Wednesday’s tests of the 1296.50 sell signal had recovered to the range’s 1307.00 upper-end, which was probed overnight up to 1313.00, but held intraday Thursday.
Silver Jul Contract (SI, ETF: (SLV))
Already extending higher after Wednesday’s close in reaction to the FOMC events, higher highs were probed overnight to gap up Thursday morning. Two-month old gaps up to 17.20-17.30 were tested, with no requirement to extend any higher before a pullback to 16.80.
30-year Treasury Sep Contract (US, ETF: (TLT))
The FOMC reaction’s dip to 142-02 Wednesday was recovered overnight and probed the 143-16 buy signal intraday Thursday.
Crude Oil Jul Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Still firming overnight to attack the upper-end of 66.25-67.25 resistance, Thursday morning’s shallow reaction down held the range’s lower-end to keep alive its buy signal.
Natural Gas Jul Contract (NG, ETF: (UNG, UNL))
Thursday’s EIA report was greeted from a position of strength, which wasn’t exploited intraday as the session only ranged narrowly around 2.95.
Mid-day Update… Backed-and-filled.
The morning’s drop is being retraced.
The open fulfilled an Isolation setup that isolated the overnight probe under yesterday’s lows. The setup’s reward is to retrace back to yesterday’s highs, i.e. the origin of the leg containing the isolated probe. 
That’s the likely minimum upside objective. Meanwhile, it’s also likely that the morning be spent backing-and-filling.
Which it was.
Surging to fulfill this morning’s 2793.00 bias-up target held, and reversed down to the 2786.00 bias-up signal. Then lower, to 2781.00. That extra 5 points is similar to no-bias trending, and required being retraced up to 2786.00.
Which it was.
In fact, noon was testing 2788.75 by 1 point. The noon hour’s dip to 2784.50 was recovered back above 2787.00 to signal the rally has resumed. This afternoon’s 2791.50 bias-up signal is now being tested to within 2 ticks.
Being a no-bias environment, the bias-up signal should define the window’s upper-end if tested. The same rule applied this morning, but didn’t prevent a temporary probe. A temporary probe this afternoon is possible, too. And there’s still unfinished above at 2798.00, which is likely to be tested today or tomorrow morning so long as no sell signal gains traction.
Look ahead: Economic Calendar – for Fri Jun 15, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s calendar is uncharacteristically busy for an expiration session — quadruple-witch, no less. And that’s not even considering the overnight Bank of Japan monetary announcement. Any reaction to either pre-open report is likely to be duplicated in reaction to the post-open Consumer Sentiment.
Bank of Japan policy statement
overnight
*Quadruple Witching
Empire State Mfg Survey
8:30 AM ET
Industrial Production
9:15 AM ET
*Consumer Sentiment
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 | 2786.75 | 2791.50 |
| …would target | 2792.50 | 2797.25 |
| Bias-down: under | 2778.25 | 2783.00 |
| …would target | 2772.75 | 2777.50 |
| 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.