Posts by Rod David
Market Wrap (recording & summary)
The rally’s next higher target at 2765.00-2766.25 wasn’t yet officially in-play. That would require closing above 2743.00-2747.00, which had otherwise contained (actually, restrained) price action since its first test Monday. Breaking higher Tuesday would have rallied aggressively and substantially, but Tuesday didn’t break higher.
Tuesday did gain traction, which at least made a rally likely Wednesday, probably already starting overnight. Gapping up was corrected back under Monday-Tuesday’s highs, but recovered into an aggressive and substantial rally through Wednesday’s close. The 2765.00-2766.25 target was probed before entering the final hour. The was extended up to 2772.50 into the close.
Wednesday gained rally like Tuesday. Not already reversing down before Thursday’s open would be likely to trend higher at least Thursday morning. Unlike Tuesday, the late extension to higher highs may have fulfilled the traction. Any opening weakness shallower than 2765.00-2766.25 would likely recover.
Meanwhile, Wednesday was a breakout from the multi-session range that had formed Monday-Tuesday. A second consecutive higher close would require at least an eventual third higher close. Rejecting Wednesday’s upside traction setup through Thursday’s open or close would bearish.
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))
Gapping up Wednesday ranged narrowly sideways above the 1.1755 bounce limit, which had reacted down on Monday. The reaction bottomed Tuesday optimistically short of filling the gap back to Friday’s close. So, already resolving up is premature and impatient, and not reliable for extending higher. back under 1.1745 would signal momentum reversing down again.
Gold Aug Contract (GC, ETF: (GLD))
Tuesday’s bounce had already filled the gap back up to last Thursday’s 1305.00 close, and reacted down intraday. Wednesday’s retest of Tuesday’s high starts chipping away at its resistance. The bearish pattern needs no further backing-and-filling or other delays in resuming its decline, which start to become bullish.
Silver Jul Contract (SI, ETF: (SLV))
Overnight strength retested the 16.55 bounce limit that was tested already Tuesday, and held. Wednesday’s open gapped back up to it, and surged to fresh highs attacking 16.80. Its immediate rejection is not possible, so only closing back under 16.55 Thursday would even begin to signal momentum reversing down.
30-year Treasury Sep Contract (US, ETF: (TLT))
Gapping back up to the 143-22 sell signal Tuesday had tried to undermine Monday’s break under it. Narrow fluctuation around 143-22 kept the door open to extending Monday’s break. Overnight weakness did that, testing 142-16 support that must now break lower to confirm the trend has reversed down.
Crude Oil Jul Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Tuesday’s post-close API report was greeted from a position of weakness, which didn’t prevent reacting down on the news. Wednesday morning’s EIA report faced the same difficulty and had the same reaction. Avoiding a new low close keeps open the potential for a recovery that would be signaled by closing above 66.25.
Natural Gas Jul Contract (NG, ETF: (UNG, UNL))
Thursday’s EIA report is being greeted from a position of strength for having “unfinished business above” and holding a pullback test of support at “lower prior highs.” The delay in recovering the dip to lower prior highs is not bullish. An initially negative knee-jerk reaction down would be likely to recover.
Mid-day Update… Tepid, or timid?
Another last-minute bias signal reflects on sponsorship.
This morning’s 2743.75 bias-down signal wasn’t touched. Holding a test of the morning’s 2254.75 bias-up signal had put its test into play. 
That could have been invalidated by exiting the bias environment above the morning’s 2760.50 bias-up target. That’s rare even to be tested after having held the bias-up signal at 10:15. Which is why recovering it would have reflected more than noise.
It was noise. A lot of noise. Rallying this morning up to 2760.50 and no higher expended as much buying pressure as possible without gaining traction for the effort. So, 2743.75 becomes “unfinished business below.”
2760.50 is now this afternoon’s bias-up signal. It was triggered by a 2-tick margin. And that was late, after having invoked the grace period. Decisiveness isn’t very important for timely signals, but late signals like it. Still hovering at 2760.50 for this long only confirms the late bias-up’s unreliability. Back under 2758.00 would start to signal momentum reversing down.
That said, STILL hovering at 2760.50 as the bias environment lapses would become more vulnerable to extending higher. Whether its inability to trigger was due to tepid sponsorship that’s losing steam, or due to timid sponsorship that would be bullish from a contrarian perspective, fresh highs would target 2765.00-2766.25. Then, the difference between tepid and timid would dictate the next leg’s direction.
Look ahead: Economic Calendar – for Thu Jun 7, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Thursday’s pre-open Jobless Claims is high-profile, but has lost its track record for influencing price action. To the extent that it does, then post-open reports will likely duplicate the reaction.
Jobless Claims
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
Quarterly Services Survey
10:00 AM ET
EIA Natural Gas Report
10:30 AM ET
Consumer Credit
3:00 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 | 2761.00 | 2760.50 |
| …would target | 2677.75 | 2766.25 |
| Bias-down: under | 2753.75 | 2753.25 |
| …would target | 2746.25 | 2745.75 |
| Signal status: LATE BIAS-UP | 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.