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))
Slightly higher highs overnight nevertheless retraced in time Wednesday to hold the 1.2435 resistance that had held its test one day earlier.
Gold Apr Contract (jUN , ETF: (GLD))
Attacking 1341.00 Tuesday without closing above 1335.50 had made the reversal attempt suspicious. Wednesday’s reversal maintains that suspicion, but closing back under 1325.00 would actually signal momentum reversing down.
Silver May Contract (SI, ETF: (SLV))
Tuesday’s close above 16.75 was not optimal for reversing the trend up, but it got a benefit of the doubt if confirmed Wednesday. It wasn’t. Closing back under 16.55 invalidated it. Closing decisively under 16.50 would confirm that momentum has reversed down targeting fresh lows.
30-year Treasury Jun Contract (US, ETF: (TLT))
Downtrending resistance and Tuesday’s 143-22 high held their tests Wednesday, still having room up to 144-10 without yet reversing the trend up.
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
The knee-jerk reaction to API had probed probed under 62.25, but that was recovered into Wednesday’s open. Volatility into and out of the morning’s EIA report eventually extended down sharply to 60.60, back under the 61.35 bounce limit. If not rejected Thursday, then a new downleg is confirmed.
Natural Gas May Contract (NG, ETF: (UNG, UNL))
Trending up again overnight gapped up Wednesday to test 2.81 resistance. A single-session’s blip-up was likely to react down sharply. The two-session pattern remains vulnerable to reversing down, while greeting Thursday’s EIA report from a position of strength.
Mid-day Update… Tooth and nail.
Post-open bounce retraced, for awhile.
Greeting the open at 2700.00 had reacted up to 2713.25 and 2718.75 targets. And higher to 2723.50, but too late for the extra effort to earn any extra reward. 
Too late, because the 2717.00 bias-down signal had triggered cleanly, and it wasn’t recovered in time to invalidate it.
Any doubt otherwise has been countered by dropping back to the open. Not only the open, or not really the open, but 2701.50. There’s nothing bullish about its retest. Its re-re-retest including the overnight action. Even if recovered again, the existence of these two new intraday tests can’t be undone.
So, the ongoing question is whether the eventual negative consequence can be delayed by yet another detour up. The afternoon’s 2708.00 bias-down signal was just invalidated after having triggered cleanly. There’s no requirement to retrace 2708.00 unlike this morning. But 2708.00 happens to be a calculable sell signal, and back under it would signal the drop resuming.
Meanwhile, invalidating a bias signal has no objective. The 2699.00 bias-down target could be fulfilled anyway. And there already being no bullish reason to revisit 2701.50, its break this afternoon would be likely to extend down sharply.
Look ahead: Economic Calendar – for Thu Mar 8, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Thursday’s busy calendar is loaded with high-profile items. At least the pre-open ECB policy statement and especially the subsequent Draghi presser are reliably influential to price action. There may be extra sensitivity to any report ahead of Friday’s payrolls.
Challenger Job-Cut Report
7:30 AM ET
*ECB policy statement / Draghi Q&A
7:45 AM / 8:30 AM ET
Jobless Claims
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
Quarterly Services Survey
10:00 AM ET
EIA Natural Gas Report
10:30 AM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET
Afternoon Bias
| WED afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2819.50 | 2718.75 |
| …would target | 2726.75 | 2726.25 |
| Bias-down: under | 2708.50 | 2708.00 |
| …would target | 2699.75 | 2699.00 |
| Signal status: BIAS-DOWN INVALIDATED | FAQ | |
| Flowcharts: Bias-UP // Bias-DN INTRO VIDEOS #1 and #2 |
||
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… Not painful enough.
Expending energy just to avoid a deeper dip.
The more things change… Last night’s gap down to 2700.00 was being attacked by a 9-point pre-open dip from overnight highs. Last night’s reaction to its 2700.00 open extended down 18-19 points.
This morning’s reaction to its 2700.00 open has extended up 18-19 points.
The 2717.00 bias-down signal triggered cleanly at 10:15. It was still being overlapped at 10:30 to avoid being invalidated. This is a bias-down environment, whose target has been met. The 2707.00 target need not be retested, and it need not hold if retested. But the window’s upper-end should ultimately be defined by 2717.00, or require its retracement — if not also to its 2710.25 10:15 print.
Meanwhile, I discussed two likelihoods during this morning’s Market Tour: That the post-open crowd wanted to express its own concerns over the same news that had triggered last night’s gap down. And that this was likely from testing 2713.25, if not 2718.75.
The session’s first 45 minutes was a 7-point choppy range around 2713.25. Now a late surge is probing 3 points above 2718.75. It’s already required to retrace back down to 2717.00, if not also to 2710.25. Back under 2715.25 would start to signal momentum reversing down. Otherwise, maintaining the recovery above 2718.75 would target a probe above yesterday afternoon’s 2731.00 high.