Posts by Rod David
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2647.75 | 2641.75 |
| …would target | 2649.25 | 2649.50 |
| Bias-down: under | 2624.00 | 2624.25 |
| …would target | 2615.00 | 2615.00 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET MET | FAQ | |
| Flowcharts: Bias-UP // Bias-DN INTRO VIDEOS #1 and #2 |
||
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)
The ongoing series of “ineffectual optimism” since Friday’s low was almost invalidated by Tuesday’s gap up above prior highs. But Tuesday’s gap up was back under prior highs. Overnight highs had probed higher, but it was just another instance of ineffectual optimism.
An unsustained overnight bounce was one form of ineffectual optimism. Some of the other instances had stopped optimistically short of their potential. Tuesday’s post-open action didn’t hesitate to compensate for those delays. The morning dropped sharply to attack prior lows. The afternoon probed sharply lower.
Tuesday’s low essentially filled a gap, which could contribute to forming a bottom. Except that this particular two-week old gap itself had stopped optimistically short of fully bottoming before launching a rally. And Tuesday’s own recovery held “higher prior lows” to avoid rejecting the dip altogether.
Potential for a bigger intraday corrective bounce probably diminishes greatly if not already underway Wednesday morning. Meanwhile, resuming the decline would find more dominoes ready to fall.
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))
Tuesday’s firmer market probed back above Monday’s 1.4010 high, still not forming a bottom, although a failed bounce on Wednesday could do that.
Gold Jun Contract (GC, ETF: (GLD))
Tuesday’s bounce was likely only obligatory, having tested prior lows at or under 1326.00 on Monday. The bounce has room up to higher prior lows around 1339.00 while still being only a temporary correction.
Silver May Contract (SI, ETF: (SLV))
Bouncing to within a dime Tuesday of the 16.80 buy signal didn’t reverse the trend back up, and it wasn’t so substantial that renewed selling pressures Wednesday couldn’t easily visit 16.40-16.50 where a larger decline would be threatened.
30-year Treasury Jun Contract (US, ETF: (TLT))
Firming overnight to 143-09 was already undermined by Monday’s bearish pattern. Reversing down through Tuesday’s open extended slightly lower to fresh lows at 142-12. The buy signal remains unchanged above 143-20.
Crude Oil Jun Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Three consecutive closes around last Wednesday afternoon’s 68.35 high were rewarded Tuesday by attacking the rally’s 69.50 target. Its rejection reversed back down under 67.60, and a second consecutive lower close Wednesday would all but seal a top.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Monday’s bounce up to 2.75 firmed another 2-3 cents Tuesday, above the 2.75 bounce limit, which must now reject price back down to maintain the distributive pattern .
Mid-day Update… Non-ineffectual pessimism.
Overnight rally’s rejection evolves into much more.
The session continues tumbling, proving that last night’s rally to 2688.50 was likely th
e mother of all “ineffectual optimism” as was suspected.
Friday afternoon’s 2660.00 origin of the string of ineffectual optimism and yesterday afternoon’s 2657.00 retest were retraced soon after the noon hour’s entry. The noon hour’s exit was testing 2639.00 and that’s extended down to 2623.25.
2630.50 is under two-week old levels. And like the other dominoes I’ve been describing, there’s no bullish reason to be revisiting this area. This afternoon’s most pertinent question seems to be whether any ineffectual optimism will enable another corrective bounce today.
1-minute RSI is diverging positively. But 3-minute RSI remains weak along with price. Exiting this afternoon’s bias environment in rally mode above a relevant resistance could at least pause the decline. Plenty of earnings are scheduled post-close, but none seem influential enough to inhibit more weakness.
Look ahead: Economic Calendar – for Wed Apr 25, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Tuesday’s busy calendar is followed by Wednesday’s almost empty calendar. The quarterly earnings onslaught continues, with plenty of Fortune 500 companies reporting.
MBA Mortgage Applications
7:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
2-Yr FRN Note Auction
11:30 AM ET
5-Yr Note Auction
1:00 PM ET