Posts by Rod David
Market Wrap (recording & summary)
Friday’s expiration started out with sponsorship. Perhaps it wasn’t obvious from the range’s measurements, but a specific upside limit was calculable, and its test produced a steep, deep reaction down. That’s the expression of opinion, in action.
Mid-morning choppiness tried to rescue the market from triggering bias-down. The rescue was almost a success, until it botched the operation entirely by plunging too late to trigger the bias. Its target was met to within 3 ticks anyway, so selling pressure was satisfied.
The balance of the session only ranged sideways, choppily. Lower highs and almost lower lows complied in a minimal sense with the bearish WedEX. There certainly was no afternoon rally, bounces failed, and the session ended at afternoon lows. So, a more obvious post-open bearish influence is likely Monday morning, regardless of the opening print.
Details and other markets coverage are discussed in the post-market Wrap recording here.
THERE IS NO SATURDAY REVIEW THIS WEEKEND. CHARTROOM WILL RE-OPEN WITH GLOBEX SUNDAY.
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 Thursday’s low at 1.1800 probed fresh lows intraday before recovering to close back above Thursday’s low. Closing back above Friday’s 1.1835-1.1840 high would fulfill a bottoming pattern, albeit one-day delayed from more optimal timing.
Gold Jun Contract (GC, ETF: (GLD))
Friday’s fresh low stopped short of touching the overnight low before reversing back to the upper-end of Thursday’s range. Closing above the range’s 1292.00 upper-end could launch at least a detour to the decline, if not also start forming a bottom. The decline otherwise remains intact.
Silver Jul Contract (SI, ETF: (SLV))
There was no more excuse to delay resuming the decline after Thursday’s gap up. Friday’s opening drop filled the gap back to Wednesday’s close. The gap-fill reacted up, But its reaction up should be only temporary, and brief, to maintain the decline’s resumption.
30-year Treasury Jun Contract (US, ETF: (TLT))
Fulfilling the requirement for an eventual third lower close Thursday enabled Friday’s reaction up. The 141-04 bounce limit was tested intraday. Closing above it would suggest the downside momentum had lapsed.
Crude Oil Jul Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Thursday’s reaction down from the open’s new high back into the week-long narrow range was not rejected Friday. But neither did it extend down meaningfully, leaving untouched the 70.85 pullback limit, while the 74.10 objective remains in-play.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Prior highs were probed above 2.85 into the weekend, but still being overlapped at the close. Actually closing above prior highs is a difficult trend behavior to reverse for Natural Gas, and would make at least a probe of fresh highs Monday is likely. Regardless, any reversal down now requires closing back under 2.85 and then lower for a second consecutive session.
Mid-day Update… Eerily calm.
Support chipped away.
A 6-point range between 2713.00-2719.00 has developed since this morning’s bias environment started lapsing. The open’s swings were wild, surging 5 points up to 2719.50 and plunging 10-11 points to 2709.00. But they weren’t so wild that the market should be so stunned. Extended periods of wide gyrations can earn periods of calm to compensate. This is not that.
Expirations are always a wild card. If their opens aren’t already trending or trying, then it’s difficult to start trending later. But this is not that, either. Today’s open did try to trend, both up into 2718.50-2719.25 resistance and back down again, twice. Developing almost exclusively in negative territory.
This afternoon’s 2713.25 bias-down avoided triggering. Its support is not being exploited. Instead, price has been hovering there, ranging narrowly, as it did through the noon hour’s second half-hour. The bias-down signal should define the no-bias environment’s lower-end until at least coming within view of lapsing. Expiration’s wild card suggests taking seriously any break lower.
As does the bearish WedEX. Two earlier setups today had potential to reverse up — the late no-bias, and the recovered plunge. Is the bearish WedEX influence already pressuring prices lower? Regardless, the indicator doesn’t require a steep slope or substantial drop. But it should at least absorb and retrace bounces. Back above 2719.00 would make downside difficult.
Look ahead: Economic Calendar – for Mon May 21, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Monday’s pre-open econ report is high-profile, but has no reliable track record for influencing price action. The afternoon’s Fed speakers may both inhibit price action and then trigger volatility.
Chicago Fed National Activity Index
8:30 AM ET
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET
*Raphael Bostic Speaks
12:15 PM ET
*Patrick Harker Speaks
2:15 PM ET
Afternoon Bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2721.75 | 2721.50 |
| …would target | 2727.50 | 2727.25 |
| Bias-down: under | 2713.50 | 2713.25 |
| …would target | 2705.75 | 2705.50 |
| Signal status: NO-BIAS, TESTED BIAS-DOWN SIGNAL | 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.