Posts by Rod David
Market Wrap (recording & summary)
Monday afternoon’s 2726.50 bias-up target was met by new highs into the final hour. Overbought RSIs helped a reaction down to 2720.00 to recover back to the high. And slightly higher, to 2727.75. RSIs were no long overbought on the retest, and price drifted back down to close under 2720.00. Monday’s close is essentially at equilibrium.
Recall from this weekend’s Saturday Review that 2725.25-2727.75 is the projected peak of a corrective bounce. Exceeding it through any relevant timing window would suggest something more substantial to the upside underway. Otherwise, if the correction from Friday’s low is done, then it should resolve down without much delay.
If/When sellers do retake control, they’ll likely be overwhelmingly focused on retracing the entire bounce as quickly as possible. So, any credible reversal down is unlikely to begin late in the session when it’s more difficult to attract sponsorship.
Resolving down without much delay should also be done without much confusion. Save for an initial stage that starts and stops, backing-and-filling up to Monday’s close, aggressive selling should be obvious into or out of Tuesday’s noon hour. Tuesday morning could be spent probing positive territory up to 2736.00 trying to extend Monday’s rally, and still be vulnerable to peaking.
- 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))
The corrective bounce including “higher prior lows” at 1.2345 was still being tested Monday, instead of yet reversing back under 1.2300 to signal momentum reversing back down.
Gold Apr Contract (jUN , ETF: (GLD))
Sunday night’s bounce up to 1329.00 was retraced before Monday’s open to hold under 1325.00, and to keep alive the potential for breaking lower to resume the decline.
Silver May Contract (SI, ETF: (SLV))
Fresh highs Sunday night tested 16.60 but was retraced to hold back under 16.50-16.55 resistance which continues to consider the bounce from testing 16.25 as only a temporary correction. Otherwise, closing above 16.55 would be vulnerable to extending higher aggressively.
30-year Treasury Jun Contract (US, ETF: (TLT))
Bouncing Sunday night up to 144-05 and a shallower bounce after Monday’s open was reversed to probe under downtrending support down to 142-24, which is also a sell signal that intersects at 143-12. The trend reverses down if its break is maintained through the close.
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Thursday and Friday’s tests of the 61.35 bounce limit didn’t hold Monday morning, which broke sharply higher through the 62.25 sell signal to test 62.80. There isn’t any specific bullish consequence to maintaining the recovery, although it would greatly undermine the near-term downside.
Natural Gas May Contract (NG, ETF: (UNG, UNL))
Still ranging narrowly at the 2.75 high could trigger a probe of fresh low back under 2.71, or else by a temporary blip-up to 2.81.
Mid-day Update… Holding up.
Late rally extends through the noon hour.
Potential for a Dry Cleaners morning had been narrowly avoided, but that didn’t require trending at all. Trending also wasn’t required after only attacking the 2674.00 bias-down signal before triggering no-bias. 
But trending developed anyway, and it extended to the 2699.00 bias-up signal.
Optimism wasn’t restrained, but it was corrected in time to avoid “no-bias trending.” Extending higher through the noon hour up to 2721.25 has triggered this afternoon’s 2715.75 bias-up signal. The afternoon’s 2726.00 bias-up target is in-play — essentially the 2725.25-2727.75 area.
During this weekend’s Saturday Review we discussed this being the target area of a possible corrective bounce. But only a corrective bounce. Closing any higher would suggest something much bigger underway. That’s still unlikely to develop from Friday’s bottom that developed so close and so near to Tue-Thu three consecutive downtrending sessions.
The bias signal has yet to be any more productive after 1:20 than before. So, it can still be invalidated by exiting the bias environment at 2:30 under its 2703.00 bias-down signal. As was the case on Friday, there is no time limit or time restraint to a break lower from probing Friday’s lows.
Look ahead: Economic Calendar – for Tue Mar 6, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Tuesday’s econ calendar has no reliably influential reports. The morning’s Fed speaker might set the tone, at least the price reaction can. Things get busier Wednesday as the monthly Employment Situation report grows nearer.
*William Dudley Speaks
7:30 AM ET
Redbook
8:55 AM ET
Factory Orders
10:00 AM ET
4-Week Bill Auction
11:30 AM ET
Treasury STRIPS
3:00 PM ET
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2716.25 | 2715.75 |
| …would target | 2727.25 | 2726.50 |
| Bias-down: under | 2703.75 | 2703.00 |
| …would target | 2691.75 | 2691.25 |
| Signal status: BIAS-UP | 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.