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))
The opportunity to start forming a bottom was abandoned Friday by the Employment Situation reaction. Fresh lows at 1.1945 keep the trend intact, and all but require at least an intraday low before a reversal would be credible.
Gold Jun Contract (GC, ETF: (GLD))
Flat-to-lower ranging Friday all but ignored the morning’s Employment Situation report, while maintaining the 1316.00 bounce limit to keep alive the downside momentum.
Silver Jul Contract (SI, ETF: (SLV))
Flat-to-lower ranging Friday all but ignored the morning’s Employment Situation report, while maintaining the 16.45 bounce limit to keep alive the downside momentum.
30-year Treasury Jun Contract (US, ETF: (TLT))
An initially favorable knee-jerk reaction probed Thursday’s high up to 144-08. Reversing backdown into Thursday’s range also probed under it to test the 143-07 sell signal. Reversal signals aren’t very credible on the same day as the trend extreme, so delaying a break under 1433-07 would be more bearish.
Crude Oil Jun Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Already firming further overnight was confirming the pattern’s backing-and-filling down to the 66.80 area had likely ended the consolidation. Extending intraday to fresh highs attacking 70.00 essentially confirms.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Fluctuating Friday between 2.70-2.72 doesn’t invalidate the attempt to resume the decline, so almost any initial weakness Monday is likely to extend down.
Mid-day Update… Bias-up, up and away.
Still rallying from this morning’s reversal.
This morning’s 2620.00 bias-down signal was tested down to 2612.25, and recovered in time to avoid triggering. That put into play an offsetting test of its 2638.25 bias-up signal. And it was tested before the first hour ended, when exceeding it would have renewed the bias-up. But it was still being overlapped.
The rally extended anyway.
If tested during the no-bias environment, the untriggered 2638.25 bias-up signal would be required to define the window’s upper-end, or else trending above it is required to be retraced. Both constraints could be invalidated if the rally’s sponsorship were to prove itself worthy — by exiting the bias environment above its 2646.00 bias-up target.
It was.
And having rejected the no-bias and its required retracement, the rally has only extended. The afternoon’s 2655.00 bias-up signal triggered and its 2662.00 bias-up target is being met now. The open’s shallow muted reaction to the Employment Situation report has leveraged yesterday afternoon’s pent-up pressure to extend sharply higher.
And now the bias-up target is being probed.
Welcome to Friday. Especially to Friday afternoon, and to the Friday Factors. Trending is difficult to start, and then difficult to stop. More to the point currently, exiting Friday afternoon’s bias environment above prior highs on a trending day is vulnerable to extending. Beware of reversal signals, or anticipate their reactions to be brief and/or shallow.
Look ahead: Economic Calendar – for Mon May 7, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Warren Buffet’s Berkshire Hathaway annual meeting is Saturday. Monday’s highlight will likely be the afternoon’s Fed speakers. Multiple opportunity for headlines are unusual for a Monday afternoon.
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET
TD Ameritrade IMX
12:30 PM ET
Tom Barkin Speaks
2:00 PM ET
Consumer Credit
3:00 PM ET
*Robert Kaplan Speaks
3:30 PM ET
*Charles Evans Speaks
3:30 PM ET
Afternoon Bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2657.50 | 2655.00 |
| …would target | 2664.50 | 2662.00 |
| Bias-down: under | 2647.25 | 2644.75 |
| …would target | 2640.00 | 2637.50 |
| Signal status: BIAS-UP | 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.
Post-open Review… Thin and angry.
No, that’s not a blind date. It’s today’s buyers.
The market drifted pessimistically lower into the pre-open Employment Situation report. 
The range’s 2623.00 lows had been probed to test this morning’s 2620.00 bias-down signal. The knee-jerk reaction blipped-up to 2629.50.
Then the blip-up was retraced entirely, and more. Fresh lows greeted the open at 2616.00 and blipped-down to attack 2612.00. Which was retraced entirely, too.
Trending straight up since then has continually peaked pessimistically short of projections. A 61.8% retracement of yesterday’s late afternoon and overnight ranges also reflected pessimism. All of which was “ineffectual pessimism” as there was no reaction down, and the pattern is resolving up anyway. Even now, the earlier ranges’ highs are inhibiting fresh post-open highs from extending above 2633.50.
No-bias has triggered, and having held a test of the 2620.00 bias-down signal, an offsetting test of the 2638.25 bias-up signal is in-play. Back under 2625.25 would start to signal a detour underway.