Posts by Rod David
Morning Bias
| MON morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2838.50 | 2842.50 |
| …would target | 2844.25 | 2848.25 |
| Bias-down: under | 2829.75 | 2834.00 |
| …would target | 2823.00 | 2827.25 |
| Signal status: BIAS-UP, BIAS-UP TARGET EXCEEDED | . | |
| BIAS VIDEOS… INTRO // EXAMPLE | ||
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)
Quarter-end portfolio window dressing may have made a difference Friday, as the two-week ranging still sits atop a massive quarter. But open-to-close was little changed, if at all, as I describe below.
Meanwhile, Thursday’s 2820.25 cash session close was still overlapping 2019.50 to avoid qualifying as a recovery attempt. Friday’s session developed exclusively above 2019.50 to clearly qualify as a recovery attempt. Being recovered is the week-old close under 2013.00-2019.50 that signaled the trend is reversing down. A significant signal to have followed a week-long distributive pattern.
A recovery attempt, because trend change signals aren’t discarded easily. Neither are they triggered easily. Last Friday’s triggering close had required Monday’s second consecutive close to confirm. Similarly, this Friday’s recovery attempt requires its own confirmation, closing again back above 2019.50. Otherwise, the recovery attempt fails, and the trend change remains intact.
At least two setups are undermining the recovery attempt. Closing Friday at or overlapping its opening bar’s 2837.50 opening high reflects equilibrium. This setup often accompanies weak-handed sponsorship, which would suggest that Friday’s buyers won’t be attracting reinforcements on Monday. Friday’s “ineffectual optimism” also reflects weak-handed buyers — gapping up, ranging exclusively in positive territory, probing a fresh high, but not closing above the last prior high probed. Gapping up Monday can invalidate both bearish setups.
Overbought RSIs at 2840.00 were neutralized before the close. Which is not a sell signal, but removes an upside attraction that would have been a helpful reminder to the market coming out of the weekend. A lot of buying pressure was expended intraday, without gaining traction for the effort or leaving “unfinished business” above, so extending higher anyway would be bullish for at least attacking the recent distribution highs. Not extending higher Monday could already be gapping down sharply.
Details and other markets coverage are discussed in the post-market Wrap recording here.
JOIN US AT 9:30 ET FOR THIS WEEKEND’S SATURDAY REVIEW.
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))
An overnight blip-down to 1.1283 attacked the outstanding gap at 1.1278, but didn’t extend as the attraction becomes supportive. Stopping optimistically short of filling the gap continues to suggest it will be probed before a bottom can be considered.
Gold Jun Contract (GC, ETF: (GLD))
Fresh lows overnight touched the 1291.30 support and bounced to gap up Friday. Without confirming Thursday’s breakout, and closing positive Friday after initially probing lower, almost any strength Monday above 1306.50 would be credible for extending higher.
Silver May Contract (SI, ETF: (SLV))
An overnight retest of Thursday’s 14.95 low formed a Double Bottom that gapped up Friday and attacked 15.20. Which leaves outstanding the gap back down to Thursday’s close, but also fails to confirm Thursday’s breakout. The buy signal is lower to 15.25.
30-year Treasury Jun Contract (US, ETF: (TLT))
The 149-10 pullback limit was touched before Friday’s open and became support to Friday morning’s hovering. Back above 150-00 would signal the rally had resumed.
Crude Oil May Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Rallying overnight gapped up above prior highs to test 60.55-60.70, creating an anchor to help absorb its reaction back down to 59.75.
Natural Gas May Contract (NG, ETF: (UNG, UNL))
Retesting Wednesday’s 2.69 low overnight was unnecessary to forming a bottom, but required closing positive to avoid gaining downside traction that would risk extending the downleg substantially lower. Trending down to a fresh low into the weekend makes Monday likely to probe fresh lows, regardless of its resolution.
Mid-day Update… Held up.
Gap up forms momentum peak.
Last night’s Globex had soon surged to a fresh high at 2829.00. But for Brexit, the balance of the night was tracking a flat-to-lower open. Thanks Brexit, this morning’s open up to 2837.50 inhibited sellers and the balance of the morning was flat-to-lower, albeit aggressively.
But even that hasn’t reversed the trend down. This morning’s bias-up environment fell 14 points from the open’s high, only to attack its 2823.00 bias-up signal. A lot of selling pressure expended without even beginning to try gaining traction.
Bouncing back toward the open had begun ranging narrowly sideways by noon. The afternoon’s no-bias environment is resisted by its 2833.00 bias-up signal. Breaking through it as the bias environment begins lapsing could trend up to fresh highs through the close. Trending down into the weekend would all but require exiting the bias environment under 2827.75 and 2825.25.
Look ahead: Economic Calendar – for Mon Apr 1, 2019
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s calendar is both high-profile and reliably influential to price action. The pre-open Retail Sales has been surprising recently. But the post-open ISM tends to inhibit price action before its release, which then generates a reaction.
*Retail Sales
8:30 AM ET
PMI Manufacturing Index
9:45 AM ET
Business Inventories
10:00 AM ET
*ISM Mfg Index
10:00 AM ET
Construction Spending
10:00 AM ET