Posts by Rod David
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2662.50 | 2663.25 |
| …would target | 2670.50 | 2671.00 |
| Bias-down: under | 2648.25 | 2648.75 |
| …would target | 2637.00 | 2637.75 |
| Signal status: NO-BIAS, TESTED BOTH BIAS-UP PARAMETERS | FAQ | |
| Flowcharts: Bias-UP // Bias-DN INTRO VIDEOS #1 and #2 |
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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)
Monday’s gap up to 2630.00 had bitten off more than it could chew. Its eyes were wider than its stomach. It flew too close to the sun. However we characterize it, 
Monday’s open extended the overnight rally only briefly before reversing down sharply through the morning.
Whatever it was, the open’s brief strength wasn’t “ineffectual optimism.” The overnight rally failed its attempt to extend, but each of the open’s relevant timing windows held up. The morning’s reversal originated after the 10:15 bias timing window.
Maintaining the open’s recovery above Friday morning’s low did form a sort of Isolation setup. So, the subsequent dip began from a position of strength. Recovering before noon would have been optimal, but at least the drop stopped when the bias environment began lapsing. In either case, its sponsorship wasn’t gaining reinforcements. Regardless, the drop was recovered, and then the morning’s rally resumed. Its minimum reward for having absorbed the dip was to retest Friday afternoon’s ~2650.00 high.
The afternoon rally gained traction first by exiting the bias environment above the noon hour’s high. Entering the final hour above the bias environment high confirmed, albeit still overlapping. Clarification arrived by extending above ~2650.00 through the 3:10-3:20 proxy window. Immediate follow-through already tested Friday morning’s 2658.50 high without closing above it. But unless rejected immediately Tuesday back under ~2650.00, the next higher objective in-play is 2691.50.
- 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 Mar Contract (EC, ETF: (FXE, UUP))
Friday’s close above the 1.2410-1.2425 bounce limit had coincided with downtrending resistance. Monday’s open gapped up through it and trended sharply higher intraday to 1.2535. Upside momentum remains intact so long as 1.2480 holds as support.
Gold Apr Contract (jUN , ETF: (GLD))
Flat-to-lower ranging Sunday night resolved up Monday to probe fresh recovery highs at 1358.00 filled the 5-week old gap at 1354.00. Momentum remains up so long as 1347.00 now holds as support.
Silver May Contract (SI, ETF: (SLV))
Gapping up Monday was initially resisted by Friday’s test of 16.65, but it eventually broke higher. Its reaction down held 16.65 as support to maintain the rally’s momentum.
30-year Treasury Jun Contract (US, ETF: (TLT))
Recovering to close back above 144-22 again Monday after Sunday night’s retest of Friday’s lows further suggests that the 144-22/145-04 range’s upper-end will still be broken before a durable break lower can develop.
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Friday already fulfilled the confirmed breakout’s minimum requirement for an eventual higher close. The upside momentum next targeting 64.88 remains intact so long as pullbacks now hold 64.64 as support.
Natural Gas May Contract (NG, ETF: (UNG, UNL))
The long-awaited 2.62 target was finally touched Friday, and its shallow reaction up extended Monday to 2.67. This should be the bounce’s peak before resuming the decline to 2.52, which remains likely since so much optimism preceded the eventual first objective’s test.
Mid-day Update… Back to business?
BONUS: SCROLL DOWN FOR NEW INSTRUCTIONAL VIDEOS.
The open’s attack on 2640.00 had renewed the bias-up signal. But it had also held the three pre-open highs. Dipping back down to their 2626.00-2627.00 interim lows didn’t hold, 
and the bias environment extended down sharply to 2602.00.
2602.00 was the peak of Friday’s last-minute bounce. Gaps back down to the 2688.00 and 2697.00 closes weren’t filled before bouncing through the noon hour. That’s optimism. And that optimism was well-rewarded by fulfilling the afternoon’s 2633.50 bias-up target.
This afternoon is a bias-up environment, so its 2626.00 bias-up signal should define the window’s lower-end if tested. It’s trying to contain a test now (see nearby chart). This morning’s bias-up signal probed 7-8 points under its bias-up signal before recovering. Repeating that behavior is possible.
The balance of the session isn’t required to trend at all. But it’s free to probe the bias-up target at any time, and to test Friday afternoon’s ~2650.00 high. Similarly, oversold RSIs at the morning’s low require a retest. Combined with it being an optimistic low, it’s likely to be retested sooner rather than later.
BONUS: NEW INSTRUCTIONAL VIDEOS
This morning’s action was rich with examples of reaction limit tests (bounce limit, pullback limit). That included a noon hour re-entry setup that I describe whenever it appears. So, I created two instructional videos for them, only several minutes long each (not including Coming Attractions, Turn-off-your-ringer PSA, and credits):
Look ahead: Economic Calendar – for Tue Mar 27, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Tuesday’s econ calendar is busy, but only one item is both high-profile and reliable for influencing price action — the post-open Consumer Confidence. It would likely duplicate any noticeable reaction to either pre-open report. The late-morning Fed speaker could influence price action, too.
Redbook
8:55 AM ET
S&P Corelogic Case-Shiller HPI
9:00 AM ET
*Consumer Confidence
10:00 AM ET
Richmond Fed Manufacturing Index
10:00 AM ET
*Raphael Bostic Speaks
11:00 AM ET
4-Week Bill Auction
11:30 AM ET
52-Week Bill Auction
11:30 AM ET
5-Yr Note Auction
1:00 PM ET