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 Jun Contract (EC, ETF: (FXE, UUP))
Higher highs overnight attacked the 1.1755 maximum corrective bounce limit up to 1.1738. Thursday’s open gapped up only slightly above Wednesday’s high to 1.1700, and the session developed largely around Wednesday’s high. A retest of Wednesday night’s high is possible before retesting this week’s lows.
Gold Aug Contract (GC, ETF: (GLD))
Firming overnight to 1311.50 probed the gap back to last Wednesday’s 1308.50 close, which had contained the prior two sessions’s highs. It was retraced before the open to avoid early strength that otherwise would have suggested a bigger bounce underway before resuming the decline.
Silver Jul Contract (SI, ETF: (SLV))
An overnight test of the original 16.60 sell signal was somewhat duplicated post-open Thursday, but held, keeping alive the likelihood for resuming the decline into the weekend.
30-year Treasury Jun Contract (US, ETF: (TLT))
Still fluctuating within Tuesday’s wide range, and overlapping flat-to-higher around Wednesday’s inside day, Thursday firmed to within a quarter-point of filling the gap back up to Tuesday’s 146-08 close. There’s still room down to 144-20 before signaling a bigger pullback underway, which Thursday’s bounce has helped to refuel for a deeper objective.
Crude Oil Jul Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Reacting down overnight to Wednesday’s post-close API data was retraced Thursday morning in reaction to the holiday-delayed EAI report. Largely retraced, a dime short of Wednesday’s 68.20 close. And only briefly retraced, reacting back down to probe 50-cents under the 67.30 open, which held its retest. But having failed to confirm Wednesday’s recovery attempt, the rally must reassert itself into the weekend.
Natural Gas Jul Contract (NG, ETF: (UNG, UNL))
Thursday’s gap up above the two prior days’ multi-session range extended to attack prior highs, and the outstanding 3.00 objective. That also filled the gap back up to Friday’s 2.97 close, which reacted down intraday.
Mid-day Update…
Pre-open break retraced only by proxy.
The likelihood for retracing the late pre-open break from 2727.25 is diminishing as this afternoon’s 
bias environment starts attacking the morning’s 2707.00 low. The interim bounce was still somewhat successful, probing back above the open’s highs. Also, its 2722.00 peak retraced 61.8% of the pre-open portion of the late break.
And now triggering this afternoon’s 2715.00 bias-down signal makes the decline more reliable. And retesting this morning’s low so soon makes its support less reliable. Extending any lower could target Tuesday afternoon’s 2691.00 “lower prior highs.”
A path higher remains possible, since retesting this morning’s low would also neutralize the required retest of its oversold RSIs. And this afternoon’s 2707.50 bias-down target has been met already, satisfying its selling pressure. So, a quick reaction up that recovers 2713.75 could shift sentiment very quickly to optimistic.
Look ahead: Economic Calendar – for Fri Jun 1, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s Employment Situation report is high-profile and reliable for influencing price action. It’s also often released with fewer other reports. But this is still a holiday-shortened week, and Friday’s calendar is still busy. Any noticeable reaction to the pre-open payrolls is likely to be duplicated by post-open reports.
*Employment Situation
8:30 AM ET
PMI Manufacturing Index
9:45 AM ET
*ISM Mfg Index
10:00 AM ET
Construction Spending
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 | 2726.00 | 2725.25 |
| …would target | 2731.25 | 2730.50 |
| Bias-down: under | 2715.50 | 2715.00 |
| …would target | 2708.00 | 2707.50 |
| Signal status: BIAS-DOWN | 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.
Post-open Review… Rubber band stretch.
Late pre-open break has tested supports.
Late pre-open breaks from narrow directionless overnight ranges are often fully retraced back to their origin, much sooner rather than later. That’s our anticipation for this morning’s drop from 2727.00 down to 2716.00. Especially after also anticipating the break would extend down to 2715.00 and potentially 2711.00, and has.
I reiterated these downside objectives in my last-minute update to the chaRTroom. I also noted that we don’t know which if either of 2715.00 or 2711.00 would launch the break’s recovery, or how the break’s complete recovery would then resolve. Price action on the way back up should be clues informing the latter.
The 2718.75 bias-down signal has triggered. Its 2710.50 bias-down target has been met to within 3 ticks. It could be met entirely, but won’t become “unfinished business below” if left outstanding. Meanwhile, this is still a bias-down environment, and the morning may break lower still.
Recovering the 2718.75 bias-down signal through the bias environment lapsing would bullish, especially if confirmed above 2721.50. The minimum objective would be to retrace the pre-open break, and potentially to resume yesterday’s rally.