Posts by Rod David
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2712.50 | 2712.00 |
| …would target | 2721.25 | 2721.00 |
| Bias-down: under | 2701.75 | 2701.50 |
| …would target | 2694.00 | 2693.50 |
| Signal status: BIAS-UP, BIAS-UP TARGET MET | 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)
The two influences competing with each other at Thursday’s open were still competing with each other at Thursday’s close. Probing under Wednesday’s intraday range was isolated to the overnight, even after trending down throughout Thursday afternoon. Also influential for a fourth consecutive session was the early rejection of early strength, as in trending down throughout Thursday afternoon.
Did I mention that Thursday afternoon trended down throughout? It held a test of 2701.50, which must hold as support to maintain that this is all a temporary pullback. Meanwhile, the Isolation setup would be well-served by Friday maintaining a gap up above Thursday afternoon’s 2720.00 bias environment high or noon’s 2731.00 high. Trending up into and out of weekend would be possible.
Meanwhile, there’s Thursday afternoon’s downtrend, which should be mentioned. If the market isn’t yet conditioned not to rally early, then another rally would be that much more credible. But, a rally that is maintained — like a gap up — without already reversing down as the open or bias timing window lapses. The next break under 2701.50 could be the next downleg getting underway.
- 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))
Wednesday’s late dip under 1.2395 was recovered at Thursday’s open. But not extended, as price hovered just above it.
Gold Apr Contract (GC, ETF: (GLD))
The post-close reaction down from Wednesday’s FOMC Minutes did produce a gap down Thursday, but it was recovered entirely to range around unchanged, hovering just under the 1335.00 buy signal that remains valid if triggered.
Silver Mar Contract (SI, ETF: (SLV))
Retesting the 16.40 sell signal overnight was recovered into a shallower gap down Thursday, which was retraced entirely to fill the gap back up to Wednesday’s close and to probe above Wednesday’s highs. Closing above Thursday’s 16.66 high would launch a new upleg.
30-year Treasury Mar Contract (US, ETF: (TLT))
Trending down to fresh lows in reaction to Wednesday’s FOMC Minutes had closed at 142-20. Thursday’s gap up extended to 143-18, but closing under 143-14 maintains the downside momentum, and the attraction to filling the gap back down to Wednesday’s close.
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Dipping down to 60.75 overnight had recovered to greet Wednesday’s EIA report at 61.35. Its reaction surged to fresh highs above 63.00. Not resuming the decline back under 61.35 for so long has been rewarded. Closing higher Friday would confirm a new rally leg underway.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Still ranging narrowly through Thursday’s EIA report is not strength, especially so long as 2.70 holds as resistance, and the pattern remains likely to probe fresh lows.
Mid-day Update… Clash of the setups.
Isolation recovery vs. Rally rejection.
Trending up through the open above yesterday’s lows had isolated the probe under yesterday’s lows. This completed the Isolation setup, next likely to rally through the afternoon, 
probably into the weekend, and possibly out of it.
Meanwhile, the three-day old pattern of rejecting early rallies has resurfaced. This morning’s rally extended nearly 21 points from its open up to 2731.00, 49 points above last night’s low. The three prior sessions reversed their rallies to close back in negative territory. Today’s session has trended down since noon, probing under the 2710.25 opening low and 1 point under its 2707.75 post-open low.
That’s still 10 points into positive territory. But this afternoon’s bias-down environment hasn’t yet stopped trying to extend lower. Isolation can probe under the open, but not negative territory, which is the rejection pattern’s goal.
Back above 2718.75 would start to signal the afternoon pullback had ended. The Isolation setup should then crush the early strength rejection pattern, extending to fresh session highs. Otherwise, not fulfilling the completed Isolation pattern would be bearish, albeit less bearish than rejecting it back into negative territory, which would suggest the reversal from last week’s highs has resumed.
Look ahead: Economic Calendar – for Fri Feb 23, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday has no econ reports, but compensates for that with four Fed speakers littered throughout the day — two simultaneously after the open.
*William Dudley Speaks
10:15 AM ET
Eric Rosengren Speaks
10:15 AM ET
Baker-Hughes Rig Count
1:00 PM ET
*Loretta Mester Speaks
1:30 PM ET
*John Williams Speaks
3:40 PM ET