Posts by Rod David
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2724.75 | 2724.50 |
| …would target | 2732.00 | 2732.00 |
| Bias-down: under | 2709.50 | 2709.50 |
| …would target | 2701.75 | 2701.50 |
| Signal status: LATE BIAS-UP | 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)
Despite gapping down, Tuesday morning trended up to fulfill the bullish WedEX. An 11-point surge out of the open was followed by a 20-point upleg into noon, interrupted by a lengthy 14-point pullback. As if suddenly realizing 
WedEX’s influence ends at noon, the balance of the session trended down to fresh lows.
Fresh post-open lows, which also probed under the overnight lows. The bullish influence was indeed done.
So, now the question gets a question. The question is whether last week’s rally was only a temporary corrective bounce. And now the question it gets is whether the decline into Tuesday’s lows is resuming the previous decline.
Yes, according to oversold RSIs at Tuesday’s low, which require a retest. Also according to sellers having gained traction through the bias environment exit and the final hour’s entry. Both setups keep alive the downward momentum — the attraction below, and the traction earned before it. But last week’s rally hasn’t yet been retraced deeply enough to signal its trend has peaked, let alone been replaced by a downtrend.
Gapping up enough Wednesday could invalidate sellers’ traction and delay retesting the low’s oversold RSIs. Follow-through to gapping up enough could resume the rally. Meanwhile, there’s only one lower objective to be met while keeping in the context of correcting the bounce before it resumes. Any deeper would start to signal the correction had ended.
- 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 dip to the 1.2435 sell signal was still testing it at the close, but it was broken through the weekend. Tuesday’s open gapped down to test 1.2350. Closing back above 1.2395 would target 1.2530, but under 1.2320 would confirm a new downleg underway.
Gold Apr Contract (GC, ETF: (GLD))
A weekend dip to the 1350.50 pullback limit broke lower to greet Tuesday probing 1341.00 which must hold as support to be considered only a temporary pullback. Room for noise down to 1335.00 was tested intraday, creating the urgency for a bullish pattern to recover 1341.00 through Wednesday’s open.
Silver Mar Contract (SI, ETF: (SLV))
Gapping down Friday already had suggested the reaction down from 16.95 was not just a temporary pullback. But the pattern can still range sideways so long as 16.40 holds as support — and it was being tested intraday Tuesday.
30-year Treasury Mar Contract (US, ETF: (TLT))
Friday’s probe above 144-12 wasn’t maintained through the close to launch a new upleg. Tuesday’s gap down and flat-to-lower ranging kept alive potential to resume the rally, but there’s little bullish excuse to further delay a new upleg.
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
[Rolling coverage forward to APR which trades at a 13-15 cent discount from MAR…] The 61.35 bounce limit’s ongoing test as resistance exited the weekend with similar action, but Tuesday morning firmed to the bounce’s highest levels. Albeit not optimal, there’s room up to 63.00 which still being able to resolve down in a new downleg target 57.05. Otherwise, closing above 63.00 would start to signal a new rally leg already underway targeting 56.90.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Gapping up to test last week’s 2.65 “prior high” still has the challenge of the prior week’s ”
higher prior lows” at 2.70 while still being likely to probe a fresh low under 2.55 before a durable bottom can form.
Mid-day Update… Bull dozing.
Buyers seem to be falling back asleep.
Rallying from the 2709.00 overnight low up to noon’s 2737.75 high barely managed to qualify as fulfilling the bullish WedEX. But WedEX is now moot. 
Continuing the recovery this afternoon all but required triggering the 2737.50 bias-up signal. But the reaction to touching it at noon has only slid to touch 2725.00.
This being a no-bias environment, the window’s lower-end should be defined by its 2724.00 bias-down signal if tested. It can be probed down to 2721.00-2722.50 and still be likely to recover, at least to retrace the signal. Back above 2735.00 would start to signal that this morning’s recovery intends to extend into late-afternoon.
But we can’t dismiss or discount the relevance of testing and holding 2737.50 at the relevant noon window. And not just because it is this afternoon’s bias-up signal. It is also Thursday night’s “spindle” which had developed wider and wider swings around it. And it was Friday afternoon’s bias environment entry and exit that had barely held.
It is meanwhile resistance. And holding its test this afternoon keeps alive the potential not only for launching a downleg, but also for resuming the decline to fresh lows.
Look ahead: Economic Calendar – for Wed Feb 21, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday morning’s Fed speaker and the post-open PMI report have somewhat reliable track records for influencing price action. Housing sector reports have been influential lately, too. But the afternoon’s FOMC Minutes is the highest-profile item, and tends to inhibit price action before its release..
MBA Mortgage Applications
7:00 AM ET
Redbook
8:55 AM ET
*Patrick Harker Speaks
9:00 AM ET
*PMI Composite Flash
9:45 AM ET
Existing Home Sales
10:00 AM ET
2-Yr FRN Note Auction
11:30 AM ET
5-Yr Note Auction
1:00 PM ET
*FOMC Minutes
2:00 PM ET