Posts by Rod David
Market Wrap (recording & summary)
The rally’s next higher objective at 2885.00 was already being tested by Tuesday night’s China trade rally, and greeted Wednesday’s open there. Immediately collapsing to test the morning’s 2875.50 bias-down signal held, triggering a complete recovery to the 2886.25 overnight high’s “new Globex trend extreme.”
Up to 2889.25, which defined the bias environment’s high. Despite exiting the bias environment above 2885.00, 2889.25 was never exceeded to confirm upside momentum remained intact. The next higher objective at 2902.00 was never confirmed, either. And not for lack of proximity, as the noon hour ranged exclusively above 2885.00.
The afternoon’s no-bias trending under its 2881.00 bias-down signal was productive, dipping under its 2874.00 bias-down signal to 2869.00, the pullback potential I had described before the open. But not in time to invalidate a requirement to retrace the 2881.00 bias-down signal, which is now unfinished business.* As is the 2884.75 opening gap up, which has yet to be retested since dipping back into a prior session’s range. (*Wednesday’s late bounce extended through the close to within 3 ticks of 2881.00 which satisfies its required retracement.)
Nothing requires extending up through or reacting down from testing the higher attractions. But there continues to be strong selling into rallies, so regardless of the near-term potential upside, a reversal down remains likely.
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))
Tuesday’s 1.1255 fresh low had held its probe under prior lows, which overnight firming exploited in reaction to China trade headlines. Reacting up to the 1.1322 prior highs helps to form a bottoming pattern, and doesn’t yet qualify as a bottom, which requires closing above 1.1344.
Gold Jun Contract (GC, ETF: (GLD))
Still hovering at recent lows keeps intact the 1302.00 buy signal, but also keeps the pattern meanwhile vulnerable to extending down.
Silver May Contract (SI, ETF: (SLV))
Filling Thursday’s gap at Tuesday’s open was recovered overnight to test the 15.15 buy signal, which was tested intraday Wednesday, too, and continues to hold. Having tested it so thoroughly, any reaction down should be shallow and short-lived to avoid resuming the decline.
30-year Treasury Jun Contract (US, ETF: (TLT))
Not holding the 149-11 pullback limit had created potential down to 147-17/147-25, which was met overnight and continued being tested throughout Wednesday. Closing above 148-02 Thursday avoid greeting Friday’s Employment Report from a position of weakness. Closing above 148-16 would greet the report from a position of strength.
Crude Oil May Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Fresh highs attacking 63.00 overnight already were greeting Wednesday’s EIA report from a position of strength. But that didn’t prevent a negative reaction down, which spent the session testing its 62.00 pullback limit.
Natural Gas May Contract (NG, ETF: (UNG, UNL))
The gap back down to Friday’s 2.66 close was filled Wednesday and held, to avoid greeting Thursday’s EIA report from a position of weakness. But also not from a position of strength, which had required closing above 2.72.
Mid-day Update… Higher highs held back, pushed down.
Backing-and-filling, again.
This morning’s recovery was contained to its bias environment. The post-open backing-and-filling that held the 2875.50 bias-up signal as support to trigger bias-up.
Its 2882.25 bias-up target was met, too late to renew the bias-up signal. But it was still a bias-up environment, likely also to visit the 2886.25 overnight high’s “new Globex trend extreme.”
Probing the overnight high by 3 points to 2889.25 also exited the bias environment above 2885.00. This did what renewing this morning’s bias-up would have done, putting into play 2902.00. Which would be confirmed by closing above 2885.00.
Meanwhile, the rally has not extended. The afternoon triggered no-bias, and the market is backing-and-filling. Again. Being a no-bias environment, its 2881.00 bias-down signal should define the window’s lower-end if tested. But its test is probing 5 points under it, “no-bias trending” that will require retracing 2881.00.
Is 2902.00 entrenched, for having exited the bias environment above 2885.00? That’s the assumption, until disproved — by closing back under 2885.00. Meanwhile, RSIs have become simultaneously oversold on this pullback, and the nearest buy signal is back above 2883.00.
Look ahead: Economic Calendar – for Thu Apr 4, 2019
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Thursday’s reports are high-profile, but not reliably influential to price action. The pre-open Fed speaker might have an impact, but the afternoon speaker’s influence on price action is likelier. Only briefly, as trending becomes difficult on the afternoon ahead of the monthly Employment Situation report.
Challenger Job-Cut Report
7:30 AM ET
Jobless Claims
8:30 AM ET
John Williams Speaks
9:00 AM ET
EIA Natural Gas Report
10:30 AM ET
*Loretta Mester Speaks
1:00 PM ET
Afternoon Bias
| WED afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2884.75 | 2889.00 |
| …would target | 2892.00 | 2896.25 |
| Bias-down: under | 2877.00 | 2881.00 |
| …would target | 2870.00 | 2874.00 |
| Signal status: NO-BIAS, TESTED BIAS-UP SIGNAL | . | |
| BIAS VIDEOS… INTRO // EXAMPLE | ||
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.