Posts by Rod David
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))
Returning to Friday’s lows Sunday night formed a gap down Monday. Prior lows recovered into positive territory where and held the intraday test through the close, but the recovery wasn’t reversed back above a prior high that would have formed a buy signal.
Gold Jun Contract (GC, ETF: (GLD))
Choppy ranging into the new week still held the 1316.00 bounce limit to keep alive last week’s bounce being only a temporary correction. But indefinite time is not available to absorb the bounce, which has little excuse to further delay resolving down to fulfill outstanding objectives below.
Silver Jul Contract (SI, ETF: (SLV))
Sideways ranging overnight and Monday continued to test the 16.45 bounce limit that Friday’s close was overlapping to avoid rejecting.
30-year Treasury Jun Contract (US, ETF: (TLT))
Triggering the 143-07 reversal signal Friday would not have been credible for the same session that produced a trend extreme. Having tested the signal anyway on Friday, it all but required being triggered on Monday. Its delay only makes another upleg increasingly likely, albeit still needing to be triggered by closing back above .
Crude Oil Jun Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Last week’s rally extended higher Sunday night to gap up Monday. The break has confirmed the next higher target in-play at 74.10, so long as pullbacks now hold 69.85 as support. Closing under 69.25 would start to signal momentum reversing back down.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Gapping up and ranging sideways Monday was similar to Friday not extending down, and doesn’t reject the Wednesday-Thursday drop that had confirmed the prior bounce was only a temporary correction. But the bearish pattern has no excuse to further delay extending the downleg to fresh lows under 2.69-2.70.
Mid-day Update… To stand still is not to fall.
It may also be to fall behind.
Two setups triggered by surging through the open to probe the 2674.00 bias-up target, and maintaining that recovery through 10:15. First, the bias-up signal was renewed, next targeting 2684.25. Second, a position of strength was created to help absorb counter-trend sponsorship.
That second setup has had a workout. Despite retracing the open’s 10-11 point surge, the morning bias environment had recovered it all to within 5 ticks. The noon hour came within 2 ticks. The first setup remains unmet.
A renewed bias-up target is not a requirement, so 2684.25 need not be met. It’s the room for noise above 2674.00, which every leg is overlapping — and not rejecting — but not yet trending through.
The position of strength is not indefinite. Its influence over dips is further depleted on every use. Rising bottoms on each use suggest there’s accumulation, but that’s not a signal.
And now this afternoon has triggered no-bias. Fresh highs would get a benefit of the doubt for extending higher regardless of the environment. But another dip might find the position of strength has become ineffectual optimism, offering no more support or recovery.
Look ahead: Economic Calendar – for Tue May 8, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Tuesday’s jobs openings report can influence price action if it diverges from last week’s Employment Situation data. Reinforcing the strong report might be enough to duplicate a knee-jerk favorable reaction. But it’s the session’s only potentially influential report at all.
NFIB Small Business Optimism Index
6:00 AM ET
Redbook
8:55 AM ET
*JOLTS
10:00 AM ET
4-Week Bill Auction
11:30 AM ET
3-Yr Note Auction
1:00 PM ET
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2680.75 | 2678.75 |
| …would target | 2686.25 | 2684.25 |
| Bias-down: under | 2670.75 | 2669.00 |
| …would target | 2664.75 | 2663.00 |
| Signal status: NO-BIAS, TESTED BIAS-UP SIGNAL | FAQ | |
| Flowcharts: Bias-UP // Bias-DN INTRO VIDEOS #1 and #2 |
||
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.
Post-open Review… Position of strength.
Quick opening surge creates post-open room to retrace.
The overnight range’s late surge had attacked 2676.00. It was reversed down as quickly as it had surged. 
Reacting down into and out of the open pierced the 2668.00 bias-up signal as support. It was reversed as quickly as the overnight reversal.
And the overnight reversal was recovered. Surging through the opening 15 minutes of volatility pierced 2678.00. The next 15 minutes added another point.
Exceeding the 2674.00 bias-up target through 10:15 has renewed the bias-up signal. This essentially puts into play a test of 2684.25. More important, it creates a position of strength for the chart to absorb counter-trend sponsorship.
Speaking of which…
The open’s entire rally has been retraced back down to 2668.75. It behaved as if there was a headline catalyst, but I haven’t seen it. Regardless, the position of strength makes the rally likely to resume. Back above 2674.75 (being tested now) would all but confirm.
Otherwise, there is a path down. Probing fresh lows through the bias environment exit would start to suggest that 2674.00 has held, and that its room for noise is not an attraction.