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))
Tuesday’s gap down had held intraday, but it extended lower overnight to gap down Tuesday and test 1.2320 support. Reaction to the afternoon’s FOMC Minutes surged back up to Tuesday’s highs, still needing to recover 1.2395 to reverse the trend back up.
Gold Apr Contract (GC, ETF: (GLD))
Not holding 1335.00 Tuesday still requires a close back above 1341.00 to launch a recovery leg. Extending the pullback otherwise has no lower objective in-play. Retesting Tuesday’s 1330.00 low held intraday, and reacted up on FOMC Minutes to test 1338.00.
Silver Mar Contract (SI, ETF: (SLV))
Holding 16.40 Tuesday and only testing it overnight allowed Wednesday to hold the pullback limit. But closing any lower would target fresh lows. The intaday bounce back up above 16.60 reacted up sharply on FOMC Minutes and filled the gap back up to Friday’s ~16.75 close.
30-year Treasury Mar Contract (US, ETF: (TLT))
Flat-to-lower into and out Wednesday’s open greeted the afternoon’s FOMC Minutes at the trading range’s 143-14 lower-end, which was still being tested after the event, having no bullish excuse to further delay recovering the 144-12 buy signal.
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
The 61.35 bounce limit still being probed at Tuesday’s close was tested as support overnight. The delay in rejecting its recovery makes its actual rejection likely to done aggressively, and any shallower weakness would be more vulnerable to recovery.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Tuesday’s gap up to test the 2.65 prior high had held, still being likely to probe fresh lows before any credible recovery could begin.
Look ahead: Economic Calendar – for Thu Feb 22, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Thursday’s econ calendar is the week’s busiest, with a combination of high-profile econ reports through the open and Fed speakers into the noon hour. All of which will be viewed through the lens of Wednesday afternoon’s FOMC Minutes.
Neel Kashkari Speaks
WED 8:15 PM ET
Jobless Claims
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
*William Dudley Speaks
10:00 AM ET
*Leading Indicators
10:00 AM ET
EIA Natural Gas Report
10:30 AM ET
Kansas City Fed Manufacturing Index
11:00 AM ET
EIA Petroleum Status Report
11:00 AM ET
*Raphael Bostic Speaks
12:10 PM ET
7-Yr Note Auction
1:00 PM 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 | 2739.50 | 2739.00 |
| …would target | 2746.75 | 2746.50 |
| Bias-down: under | 2727.50 | 2727.25 |
| …would target | 2719.50 | 2719.00 |
| Signal status: NO-BIAS | 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 too little, but too late.
Opening surge reaches resistance.
If this morning were going to rally, then it was going to do it early — if not immediately. Which it did. Downtrending resistance that defined the overnight highs was broken above 2717.75 just minutes before the open. The second minute’s blip-down to 2716.25 was reversed up sharply and relentlessly to 2729.25 through the opening 15 minutes of volatility. And that was extended to attack the 2732.00 bias-up target to within 2-3 ticks.
The 2724.50 bias-up signal was touched at 10:15 to invoke the grace period. It was recovered through 10:30 to trigger late bias-up. Its 2732.00 bias-up target is now being probed up to 2734.75.
Pretty powerful stuff. Especially for weak-handed buyers.
Strong-handed buyers would have gapped up above yesterday afternoon’s 2732.25 bias environment high. That was the minimum requirement to invalidate yesterday afternoon’s sellers for having gained traction. So, this morning’s rally is likely temporary. Friday and Tuesday both rallied early and reversed later. Following that pattern today could probe yesterday’s low under 2706.00. And lower.
Exiting this morning’s bias environment above its 2732.00 bias-up target (or above 2737.50 if tested meanwhile) could invalidate the bearish scenario. At least, it would get a benefit of the doubt for extending the bounce.
The First Trade & Pre-open Tour Recording… The traction is sticking.
Proper context can start the day with a solid win and make all the difference.
DAILY SCHEDULE
First, watch the pre-open Tour recording HERE <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A
Through the prior close…
Trending down through the weekend to eventually touch 2709.00 didn’t affect whether the bullish WedEX could influence Tuesday morning. In fact, gapping down to 2721.00 surged 11 points through the open to maintain the signal. A lengthy 14-point pullback resolved in a 20-point upleg to test 2737.50 into noon to fulfill the signal. WedEX’s influence ends there, which the balance of the session made obvious by sliding to fresh lows at 2705.75. Sellers gained traction through the bias environment exit and the final hour’s entry, before closing action bounced to touch 2720.00. Overbought RSIs at the high printed just after noon to avoid requiring a retest, while oversold RSIs at the afternoon’s low require a retest.
Overnight action’s new info…
Initially firming slightly further up to 2721.50 suddenly collapsed before midnight, attacking yesterday’s low to within 2-3 ticks. A shallower bounce was still sizable, attacking 2719.00 before collapsing again to attack the low. The range has continued narrowing around 2714.00.
If, then…
Regardless of whether last week’s rally was only a temporary corrective bounce, it’s premature to pronounce its passing — let alone the previous decline’s resumption. Yesterday afternoon’s traction and oversold RSIs at its low haven’t been neutralized overnight, so the reversal attempt has no excuse not to become more obvious today. Not already rallying overnight makes the open unlikely to gap up enough to neutralize the afternoon’s traction. Satisfying its fresh lows, retesting oversold RSIs, and holding the next lower objective still could launch another upleg. The afternoon’s FOMC Minutes may prove instrumental to the market choosing its next direction.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2711.00 would be unlikely to trigger the 2709.50 bias-down signal at 10:15. Exiting the open under 2707.00 would be likely to trigger bias-down.