Posts by Rod David
Market Wrap (recording & summary)
Thursday and Wednesday’s sessions differed from each other in 1-2 relevant ways. Wednesday had been greeted by an overnight rally that stalled through the morning, and Thursday had threatened not to extend overnight highs until the open rallied. Wednesday’s rally peaked during the afternoon bias environment, while Thursday’s peak developed as the bias environment was entered.
But their intraday rallies were nearly identical. Both began by gapping up, then trended up — sharply, almost directly to their objectives, where the balance of each session ranged sideways.
The similarity is relevant because it suggests that Friday will develop differently. Most of the intraday characteristics, if not all of them. So, this doesn’t tell us how Friday’s pattern will develop, but how it probably won’t. For example, gapping up again would likely fail. Gapping down could recover, but probably not into another substantial rally.
Meanwhile, Friday is being greeted with no “unfinished business above” (again), and a lot of room for backing-and-filling below. Neither of which is necessarily bearish, but keeps alive volatility into the weekend.
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))
Surging at Thursday’s open wasn’t capable of extending because a bottom had not formed. But retracing Thursday’s opening surge to test the prior two-day range as support does form a bottom. Now closing above 1.1977-1.2025 would signal that momentum is reversing up.
Gold Jun Contract (GC, ETF: (GLD))
Still not resuming the decline remained vulnerable to a bigger detour. Thursday’s open gapped up through the 1316.00 bounce limit and extended higher to test 1323.00. A pullback held 1316.00 and recovered back to 1323.00. It’s still likely only a detour, but a detour targeting a test of its 1329.00 bounce limit.
Silver Jul Contract (SI, ETF: (SLV))
Wednesday had outperformed by probing fresh highs up to 16.65. Thursday gapped up to Wednesday’s high to attack 16.80, which the balance of the session hovered under. Any higher would target a test of 16.95.
30-year Treasury Jun Contract (US, ETF: (TLT))
Wednesday’s gap down under the 142-07 sell signal had not extended intraday, remaining vulnerable to at least a corrective bounce. Thursday’s 30-year auction went off without difficulty, but a bounce held tests of 142-07. A fresh low on Friday would be credible for extending down into and out of the weekend. Otherwise, Thursday’s failure to confirm Wednesday’s breakout leaves open open potential to trigger the 143-19 buy signal.
Crude Oil Jun Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Ranging narrowly at the recovery highs Thursday allows the pullback limit to be raised to 70.25, while the 74.10 target remains intact.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Thursday’s EIA report wasn’t greeted from a position of strength, but that didn’t prevent surging back up to attack last Tuesday’s 2.82 highs. A second consecutive higher close on Friday would get every benefit of the doubt for launching a new upleg. Otherwise, Thursday’s surge should be retraced quickly to confirm downside momentum remains intact.
Mid-day Update… Too soon?
Next higher objective pushes back.
Testing this morning’s 2710.25 bias-up target caused a half-hour consolidation. A narrow consolidation. 
A temporary consolidation. The rally had already resumed before the bias environment even came within view of lapsing.
The next higher objective of 2721.50 was still outstanding when the noon hour was entered. Testing it halfway caused another consolidation. Also a narrow consolidation. And also temporary, as the noon hour exit pushed higher.
That push proved temporary, too. Touching 2725.00 was also still overlapping the afternoon’s 2722.75 bias-up signal in time to invoke the grace period. Lower lows at 2719.00 rejected the bias-up altogether.
This afternoon is a late no-bias environment. If tested, its 2709.00 bias-down signal should define the window’s lower-end. But not after the window lapses, which would then be free to trend down further. Nothing requires trending down, and the bias environment lapsing is also free to recover 2722.75 bias-up signal to resume the rally through the close.
Look ahead: Economic Calendar – for Fri May 11, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s post-open econ report is both high-profile and reliable for influencing price action. So is the pre-open Fed speaker. Any noticeable reaction to his remarks will likely be duplicated in reaction to Consumer Sentiment.
*James Bullard Speaks
8:30 AM ET
Import and Export Prices
8:30 AM ET
*Consumer Sentiment
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 | 2724.50 | 2722.75 |
| …would target | 2729.50 | 2727.75 |
| Bias-down: under | 2710.50 | 2709.00 |
| …would target | 2704.50 | 2703.00 |
| Signal status: LATE NO-BIAS, TESTED BIAS-UP 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.