Posts by Rod David
Market Wrap (recording & summary)
Overnight and pre-open selling neutralized two pieces of “unfinished business below” left outstanding from Wednesday at 2703.75 and 2702.25. Neutralizing an attraction usually creates vulnerability to reversing direction. But here it enabled a gap down under relevant support that reinforced the bearish WedEX.
And the gap down also enabled trending down throughout the day. It wasn’t a “session-long decline” setup, but it was session-long decline behavior — every timing window but one probed a fresh low. Ultimately, the 2681.50 afternoon low touched its bias-down target, also filling the gap back to Monday’s close.
The afternoon bias environment exit wasn’t high enough early enough to trigger a short-squeeze. The proxy window was likely on its way to reversing down when a Trump headline triggered a 12-point spike up to 2699.00. Dipping into the close retraced it by 61.8% down to 2691.00.
The bearish WedEX influence is scheduled to begin Friday afternoon. The morning isn’t required to bounce, but may need to, since the headline’s knee-jerk reaction brought in new sponsorship. Regardless, trending in either direction from this setup is likely to begin by gapping.
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))
Thursday didn’t show any interest in doing what Wednesday failed to do, exceeding through the 1.24355 buy signal. And so it reacted down again back to 1.2390, which should recover without delay if the pattern still intends to resolve up. A deeper pullback could still test 1.2335 before reversing the trend down, but that would likely be only a formality.
Gold Jun Contract (GC, ETF: (GLD))
Thursday’s dip to 1344.00 held and recovered back above 1347.25 to keep alive the attraction above to 1361.00-1364.00. Any lower close would invalidate the pattern’s accumulative features and almost reverse the trend down.
Silver May Contract (SI, ETF: (SLV))
Essentially testing the rally’s first objective at 17.37 Thursday held as resistance for a shallow intraday reaction down to attack 17.05 as support. Closing any lower would undermine the upside momentum, which otherwise is next targeting 17.65.
30-year Treasury Jun Contract (US, ETF: (TLT))
Apparently satisfied with a straight 61.8% retracement that stopped short of its 146-10 potential, the pattern’s reversal down extend Wednesday’s 145-04 sell signal to fresh lows at 143-12. Closing under 143-22 would signal the decline is likely to extend without delay, but closing above 143-22 allows for a corrective bounce.
Crude Oil Jun Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Extending higher without delay tested the 69.50 target before Thursday’s regular open, but not intraday which reacted to pierce under Wednesday’s highs down to 68.15. A second consecutive higher close would have put into play an eventual third higher close or more. Failing to produce that setup, while also fulfilling the pattern’s buying pressure, introduces vulnerability to reversing down with little warning.
Natural Gas May Contract (NG, ETF: (UNG, UNL))
Ongoing distributive behavior in testing the 2.75 bounce limit finally reacted down to test the 2.70 sell signal Thursday. Its initial probe was retraced enough to fill the gap back up to Wednesday’s close. The balance of the session trended back down to fresh lows at 2.66. A second consecutive lower close for confirmation would be helpful, but neutralizing the attraction above is already helpful to reversing the trend back down.
Mid-day Update… Round-trip complete.
Last lower objective now tested as support.
That was a quick trip. Recovering 2681.50 had put into play the next higher objective at 2715.00-2722.00. The lower-end of the next higher objective was probed yesterday, 
leaving no “unfinished business above.” Now 2681.50 has been touched as support.
2681.50 happens to be be this afternoon’s bias-down target. This is a bias-down environment, so uptrending during the next half hp fill back to Monday’s futures close, which is natural support. Just probing more than 61.8% of the gap (under 2687.25) is unusual on the first attempt, and expends a lot of buying pressure.
Extending under 2681.50 is possible — its cash session close was 2678.00. But it’s unnecessary, and difficult at this stage. Reversing up is possible. The 2687.25 bias-down signal should define the bias-down environment’s upper-end (it’s being tested now), but probing above it anyway would require retracing back down to it at some point.
Look ahead: Economic Calendar – for Fri Apr 20, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s econ calendar is unusual, not having any morning econ reports, but still having a couple of Fed speakers. There is on track record for this setup, so its reaction will be interesting — especially on a Friday.
Loretta Mester Speaks
Thu 6:45 PM ET
*Charles Evans Speaks
9:40 AM ET
*John Williams Speaks
11:15 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 | 2698.00 | 2697.50 |
| …would target | 2705.25 | 2705.00 |
| Bias-down: under | 2687.50 | 2687.25 |
| …would target | 2682.00 | 2681.50 |
| Signal status: BIAS-DOWN | 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.