Posts by Rod David
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2678.25 | 2674.00 |
| …would target | 2683.25 | 2681.00 |
| Bias-down: under | 2664.75 | 2662.50 |
| …would target | 2657.50 | 2655.25 |
| Signal status: BIAS-UP, BIAS-UP TARGET MET | FAQ | |
| Flowcharts: Bias-UP // Bias-DN INTRO VIDEOS #1 and #2 |
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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)
Tuesday afternoon’s 2662.00 bias-down signal didn’t trigger, but it broke sharply lower when the bias environment began lapsing. Its 2655.00 bias-down target was probed by 3 points. More important, the fresh lows joined the morning and noon hour’s fresh lows to extend Monday afternoon’s slide. Its trend reversal is now confirmed, regardless of closing nearly unchanged on the day.
Meanwhile, the market has adopted a new and an interesting characteristic — defensive posturing. Based on Tuesday morning’s price action, we anticipated the President’s afternoon remarks would be greeted from fresh session lows. Later, Iran’s response was preceded by a plunge to more fresh session lows. Their recoveries are masking the 180-degree change from greeting news overly-optimistically, and then recovering from reactions down.
The market is at once learning both to posture defensively by dipping, and also to prepare for buying the dip. This eventually encounters a problem, as dips become too shallow and bounces are sponsored by weak hands. It becomes a vicious circle that ends with a bigger downleg, or resets with bigger corrective bounce.
Perhaps Monday afternoon’s 19-point slide was the beginning of defensive posturing. Tuesday included a couple of 16-point downlegs ahead of news. Gapping up Wednesday above Tuesday’s 2674.00 high could retest Monday’s highs up to 2684.25 and still resolve down into the weekend. There are two near-term paths down, one extending down through Thursday morning, and the other bouncing first before launching a deeper downleg into the weekend. Extending down without delay Wednesday could find a near-term low and a temporary bounce Thursday morning.
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))
Four consecutive sessions probing fresh lows and closing at prior session’s low never gained traction for its intraday reversals, leading to a capitulative session Tuesday. This still prevents an immediate recovery attempt from extending higher without at least first retesting the lows.
Gold Jun Contract (GC, ETF: (GLD))
Another day of holding the 1316.00 bounce limit finally resolved down Tuesday to attack 1306.00. Bit was retraced to retest 1316.00 before resuming the decline, which stills needs fresh lows to confirm.
Silver Jul Contract (SI, ETF: (SLV))
Overlapping or testing the 16.45 bounce limit was interrupted by a shallow dip to 16.33 that recovered to resume testing 16.45. Resuming the decline has no reason for further delay.
30-year Treasury Jun Contract (US, ETF: (TLT))
Overlapping the 143-07 sell signal again intraday Tuesday still needs to decisively break under it, or else become even more vulnerable to launching a new upleg as more selling pressure is expended without yet having gained traction for its effort.
Crude Oil Jun Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Volatility was intense ahead of the President’s JCPOA announcement. Monday’s fresh high at 70.85 had created room for a pullback down to 68.85 or 68.25, both of which were probed down to 67.65. Bouncing back above 68.85 to 70.40 confirms 74.10 is in-play, especially if confirmed by a second consecutive higher close Wednesday.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Monday’s bounce was just a different version of Friday’s consolidation, neither one reversing the re-established downtrend. But the downtrend doesn’t need to conduct any further backing-and-filling before break to fresh lows, if that is still its intent. Tuesday’s dip back into Friday’s range is a good start, but still can’t afford to hesitate extending to fresh lows.
Mid-day Update… Dug in, or done digging?
Probe of fresh lows snaps back into the range.
This morning’s noN-bias environment had no attraction in-play, either above or below. So, recovering yesterday afternoon’s slide was unlikely, 
but a rally attempt would still be likely to probe above the 2672.00 overnight high. The overnight high was probed by 2 points, but only momentarily before reversing back above yesterday’s lows.
And lower. Gradually at first, and then suddenly blipping-down to 2657.25. Down, and back up above yesterday’s lows, again. Not triggering the 2662.00 bias-down signal has improved to touched 2666.00.
Obviously, the President’s impending JCPOA announcement is a culprit. Dueling headlines have thoroughly confused the market between leaks, fake news and press releases. The actual knee-jerk reaction may have room to run.
Overnight, morning and now noon hour probes under yesterday’s low aren’t extending down. But until their reactions are actually reversed up, the probes are chipping away at support. And having probed fresh session lows during the noon hour, this afternoon is likely either to rally, or likelier to etxend the decline.
Look ahead: Economic Calendar – for Wed May 9, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday’s pre-open PPI is both high-profile and reliable for influencing price action. A very low-profile uninfluential report follows post-open, but could still trigger a price reaction if PPI made an impact. The afternoon’s Fed speaker will keep the market engaged to produce some afternoon bias environment volatility.
MBA Mortgage Applications
7:00 AM ET
*PPI-FD
8:30 AM ET
Wholesale Trade
10:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
10-Yr Note Auction
1:00 PM ET
*Raphael Bostic Speaks
1:15 PM ET