Posts by Rod David
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2735.25 | 2735.25 |
| …would target | 2741.50 | 2741.50 |
| Bias-down: under | 2727.25 | 2727.25 |
| …would target | 2721.50 | 2721.50 |
| Signal status: LATE NO-BIAS, TESTED BOTH BIAS-UP PARAMETERS | FAQ | |
| Flowcharts: Bias-UP // Bias-DN INTRO VIDEOS #1 and #2 |
||
1. At 10:15, 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 10:15 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 10:15 would invoke a grace period through 10:30 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 10:30 after invoking the grace period would trigger “noN-bias,” with no bias influence.
Market Wrap (recording & summary)
Gapping up sharply both overnight and intraday is difficult to absorb, let alone to reverse back down. Sunday night’s gap up never extended, and Monday’s gap up retraced its initial probe follow-through. That’s at least a bearish bias. But it’s not a sell signal.
Almost equally important to intraday patterns is the close. And the close was still overlapping last Monday’s 2725.00-2732.00 consolidation. Tests of its lower-end had reacted down, sometimes considerably, but not durably. Closing above the consolidation’s upper-end can launch a new upleg.
Or, closing above the consolidation’s 2732.00 upper-end can trigger a obligatory blip-up that finds no reinforcements before collapsing. Or, 2732.00 has now held, and Tuesday is read to trend back down. Sunday and Monday’s rally have created room down to Friday’s 2713.00 close before any weakness can be more than noise, and signal the trend reversing down.
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 down to Friday’s low and probing fresh lows under it doesn’t qualify at all for exploiting Friday’s bottoming attempt. Neither did Monday’s gap down within the prior range. But recovering from fresh trend lows to close back within the range testing unchanged at 1.1800 does keep the door open to reversing the trend up.
Gold Jun Contract (GC, ETF: (GLD))
Fresh lows Sunday night probed Thursday’s pre-open lows that Friday morning’s low had stopped optimistically short of touching. Fresh lows Sunday night were the consequence to that optimism. Bouncing back Monday to 1292.00 resistance keeps the door open to reversing the trend back up.
Silver Jul Contract (SI, ETF: (SLV))
Sunday night’s dip to 16.25 probed under Friday’s low, which had begun to resume the decline. Monday retraced it, as with Friday’s dip. But the decline still hasn’t resumed, and Monday afternoon’s reaction up was back to testing the 16.50 bounce limit.
30-year Treasury Jun Contract (US, ETF: (TLT))
Still fluctuating around the 141-04 bounce limit Monday has avoided forming a pattern any likelier to reverse up. Back above 141-24/142-02 would be credible for extending higher, but otherwise the trend remains down with new lows likely.
Crude Oil Jul Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Sunday night’s spike up to 71.90 helped to reveal the upside potential now available since last week’s pullback from new highs. The surge was corrected into Monday’s open, and intraday action extended higher to 72.33. The 74.10 target is intact.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Monday morning’s dip back down to 2.82 continued holding the retest of 2.85 prior highs. But there’s still room down to 2.78 before even beginning to signal momentum reversing down.
Mid-day Update… Rubber and glue.
Holding resistance, if not actually sticking to it.
This afternoon’s 2534.00 bias-up signal was overlapped at 1:20 to invoke the grace period, and still being overlapped at 1:30 to avoid triggering. 
This is a noN-bias environment. Not a bias-up with a higher target in-play, and not a no-bias requiring the bias-up signal to hold. Often a noN-bias simply ranges sideways, but the window is free to roam.
Shouldn’t it? This morning’s action was non-committal, but not for lack of trying. It swung wider than the open’s range, which was already wide. The 2737.00 9:45 was eventually probed up to 2739.25. Its reaction down eventually plunged to 2725.25. And now that has been retraced up to 2736.25.
Should it be down? If there is trending during this noN-bias environment, no more downside is required. This morning’s high held the earlier peak’s test to form a Double Top, which was the last opportunity for fulfilling the bearish WedEX. Like hitting a one-outer at the Texas Hold’em World Series of Poker, the bias environment exit plunged to fresh post-open lows at 2725.25. Now the WedEX influence is moot.
Back under 2732.75 would start to signal momentum reversing down — probably for a fresh session low, perhaps to fill the gap back to Friday’s 2713.00 close. Rallying instead has no restraint, and could end the session above 2740.00.
Look ahead: Economic Calendar – for Tue May 22, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Tuesday’s econ calendar isn’t empty, but it’s otherwise irrelevant, as neither of its items has a reliable track record for influencing price action. The calendar heats up going forward into the three-day holiday weekend.
Redbook
8:55 AM ET
Richmond Fed Manufacturing Index
10:00 AM ET
4-Week Bill Auction
11:30 AM ET
52-Week Bill Auction
11:30 AM ET
2-Yr Note Auction
1:00 PM ET