Posts by Rod David
Market Wrap (recording & summary)
NOTE: THERE IS NO SATURDAY REVIEW THIS WEEKEND. MARKET WRAP WAS EXTENDED FRIDAY TO REVIEW THE BIGGER PICTURE. DROP-IN SUNDAY NIGHT FOR STOCK REQUESTS.
If a tree falls in a forest, does it make a sound? Actually, that’s not relevant here. But the opposite seemed to have happened Friday afternoon. Like Jack’s fabled beanstalk, and perhaps sown from the same magic seeds, an intraday plunge back 
to sharply lower lows was recovered entirely before the close.
The open’s blip-up to 2618.50 had reversed down nearly 90 points to within 5 ticks of Monday night’s 2529.00 low. The morning’s bias-down influence persisted through the noon hour as Fridays often do. The afternoon bias environment’s target had been tested, and a blip-down under it was reversed up sharply from 2530.25 to the 2590.50 open. Its correction through the position-squaring window recovered to fresh highs attacking 2538.00, 117 points off the low.
So, was disaster averted? Yes, for Friday, but not necessarily for Monday. Any delay in resuming the decline will get every benefit of the doubt for extending the bounce into Tuesday morning. Otherwise, the session’s quasi-Pivot Reversal is often deceptive. The setup identifies extreme sentiment, but Friday’s low stopped optimistically short of touching Monday night’s low. Its intraday trend extreme is always suspicious, and the reversal’s momentum is difficult to maintain through the weekend. And the afternoon bias-down environment’s rally still requires being retraced down to 2558.00.
There’s a lot of upside for even a corrective bounce if Monday doesn’t decline. And if there’s any environment that can bounce hundreds of points in a brief period of time, it’s an environment that is already bouncing (and dropping) hundreds of points in brief periods of time. There’s also a lot of downside, even if only to form a more durable bottom. Retesting the 2529.00-2530.00 lows would target 2509.00-2511.00.
Ironically, Friday’s bounce now offers a lot of room to expend a lot of selling pressure that would have significantly overshot 2509.00-2511.00 to become a more entrenched bear market. A bottom last Tuesday would have been credible. So would a bottom this Tuesday. Or, in case of a bounce Monday, starting the next downleg Tuesday would be credible, too.
- Details and other markets coverage are discussed in the post-market Wrap recording here.
- chaRTroom will re-open Sunday night for Globex.
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))
Holding the lower-end of the month-old 1.2260-1.2300 range Thursday didn’t prevent probing under it Friday. Closing lower puts into play 1.2090, with the nearest buy signal being 1.2325.
Gold Apr Contract (GC, ETF: (GLD))
Narrow overnight ranging persisted through Friday, seemingly oblivious to volatility around it, but also continuing to hover above 1312.500 to avoid triggering lower targets.
Silver Mar Contract (SI, ETF: (SLV))
Gradual deterioration intraday Friday eventually tested the 16.15 target that had been attacked Thursday. Holding it throug through close introduces potential for a bottom to form.
30-year Treasury Mar Contract (US, ETF: (TLT))
Already having fulfilled its minimum requirement for an eventual third lower close, overnight firming could have extended higher intraday. But Friday only ranged sideways choppily above Thursday’s low.
Crude Oil Mar Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Still not even trying to hold the 61.50 target that was met Wednesday, the next lower target at 59.80 was met Friday morning and probed down to 58.10. The next lower target at 57.20 is in-play. so long as 59.80 isn’t recovered.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Ongoing narrow ranging at the pullbacks lows had avoided a recovery for too long, all but ensuring extending lower. Friday’s dip greets the weekend and fresh relative lows, which this market usually probes on Monday regardless of the resolution.
Mid-day Update… Precariously positioned.
Greeting the afternoon at fresh lows..
This morning’s 2570.75 bias-down signal was overlapped only by the bars that fulfilled its required test down to 2566.00. A 32-point bounce consolidated through the bias environment lapsing. The morning’s decline resumed through the noon hour.
Even before triggering this afternoon’s 2558.00 bias-down signal, its 2540.00 bias-down target was being tested at the noon hour’s 2538.75 low. Its reaction attacked 2566.00 before reversing back down to and through 2540.00. The target wasn’t broken in time to renew the bias-down signal, but it’s being probed now by 10 points.
That’s within 5 ticks of Monday night’s 2529.00 low. Its retest is likely to include 2509.00-2511.00. The lower target gets every benefit of the doubt unless disproved. Here’s one way for that: The afternoon’s bias-down environment should be limited to tests of its 2558.00 bias-down signal if tested. But recovering it when the bias environment begins lapsing at 2:30 could trigger a short squeeze.
Look ahead: Economic Calendar – for Mon Feb 12, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: No econ reports as the week begins (and very little that is high-profile throughout the week).
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET
Treasury Budget
2:00 PM ET
Afternoon Bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2594.50 | 2593.00 |
| …would target | 2610.25 | 2609.00 |
| Bias-down: under | 2559.50 | 2558.00 |
| …would target | 2541.50 | 2540.00 |
| Signal status: BIAS-DOWN, BIAS-DOW TARGET MET | FAQ | |
| NEW! 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.