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 Mar Contract (EC, ETF: (FXE, UUP))
Wednesday’s bounce was formally rejected by Thursday’s gap down which probed deeper intraday. Any lower close would confirm the trend remains down. Only ranging sideways Friday would be more difficult to extend.
Gold Jun Contract (GC, ETF: (GLD))
Overnight weakness enabled a gap down Thursday to 1332.00, filling the gap back to Tuesday’s close. Closing lower Friday would reinstate the downleg targeting 1295.00 and lower.
Silver May Contract (SI, ETF: (SLV))
Probing lower to 16.15 Thursday morning reacted back up into positive territory, attacking 16.40 whose recovery would undermine the week’s drop, and avoiding a lower close Thursday that would have confirmed the trend already reversing down.
30-year Treasury Jun Contract (US, ETF: (TLT))
Room for the pullback to extend down to the 145-00 area was exploited already overnight down to 144-27, which was retested later Thursday morning. So, price has reversed as much as is possible without yet reversing momentum down, just ahead of a reliable catalyst in Friday’s Employment Situation report. Notwithstanding an initially negative knee-jerk reaction down, not yet reversing back up Friday would suggest the pullback is extending much more deeply.
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Wednesday’s recovery had only filled the gap back up to Tuesday’s close, without closing higher to confirm momentum had reversed up. Thursday’s fluctuation around Wednesday and Tuesday’s close doesn’t yet make the pattern any less vulnerable to retesting the 62.62 pullback limit. But any early strength Friday would be credible for extending higher into the weekend, confirmed by closing above 64.25.
Natural Gas May Contract (NG, ETF: (UNG, UNL))
Thursday’s EIA report wasn’t greeted from a position of weakness, and its reaction down back to 2.65 still needs a second consecutive lower close on Friday to be reliable as the downleg that retests the recent 2.62 low down to 2.52.
Mid-day Update… The end is near?
Extension retraced, and possibly reversed.
This morning’s bias-up environment eventually resolved up through 2660.00 to probe fresh highs up to 2672.25. Reversing down into the noon hour was corrected coming out of the noon hour, but that didn’t prevent triggering late bias-down. Now the afternoon’s 2650.00 bias-down target is already being met.
2650.00 is also potentially holding. And why not. It satisfies selling pressure, which often requires attracting reinforcements to extend the decline. But attracting any sponsorship is difficult during the afternoon before the Employment Situation report, which often paralyzes price action with anxiousness. In fact, its reaction is now testing 2659.00.
Having probed well above it, now closing under 2660.00 would not greet tomorrow’s report from a position of strength. Meanwhile, closing under 2644.00 would all but ensure resolving down tomorrow. Dipping back under 2653.00 would start to signal at least an attack on 2644.00 underway.
Look ahead: Economic Calendar – for Fri Apr 6, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s pre-open payrolls is announced in a vacuum, with no other reports around it. So, the ultimate reaction is likely to be obvious early, and sometimes also fully developed. The afternoon’s Fed speaker might help to keep alive volatility into the weekend.
*Employment Situation
8:30 AM ET
Baker-Hughes Rig Count
1:00 PM ET
*Jerome Powell Speaks
1:30 PM ET
Consumer Credit
3:00 PM ET
Afternoon Bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2671.25 | 2671.75 |
| …would target | 2677.00 | 2677.50 |
| Bias-down: under | 2658.00 | 2658.50 |
| …would target | 2649.50 | 2650.00 |
| Signal status: LATE 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.
Post-open Review… Hovering.
Choppy open holds the pre-open range.
The open immediately broke under 2660.00 and extended down to 2651.00. That took longer than the opening 15 minutes of volatility, and still held the overnight Head & Shoulders pattern’s neckline. Breaking any lower would be too late to ensure recovery.
But there was no break any lower. The rubber band had not been stretched deeply enough to snap back up. Bouncing back into the range hovered around the open.
Still hovering around the open. Bias-up triggered, and was renewed by also exceeding its 2656.25 bias-up target through 10:15. Its renewed bias-up target at 2644.00 doesn’t require being met. But any reaction down during the bias environment must be defined or contained by the 2647.50 bias-up siganl.