Posts by Rod David
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2708.50 | 2706.00 |
| …would target | 2721.25 | 2718.75 |
| Bias-down: under | 2676.50 | 2674.00 |
| …would target | 2653.50 | 2651.00 |
| Signal status: LATE BIAS-DOWN | FAQ | |
| NEW! 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)
Tuesday night’s ranging had resolved up almost immediately from the 2687 open. The morning’s 41-point post-open rally triggered bias-up, and fulfilled its 2722 bias-up 
target when nearly touching 2727.
Then things changed.
Dipping into the noon hour extended down through the afternoon bias environment entry. That stopped optimistically short of touching the open’s low. Potential for a Wreversal Wednesday lapsed as the balance of the afternoon ranged choppily sideways. More so, the last half-hour was entered by a retest of the afternoon range’s upper-end up to 2710.
Then things changed, again. A lot.
The 3:37 position-squaring window started retracing the afternoon’s last bounce, and then some. The afternoon range’s lows were attacked down to 2688 within 3 minutes of the 2679 cash session close. That 31-point drop extended to 43 points into the 2667 futures settle. The “narrow” ranging at Tuesday night’s 2660 low was retraced by 61.8%. (And 2663 is being touched minutes later.)
Two consecutive sessions have probed back above December’s prior highs. Both failed to close higher, and one attempt was significantly higher before failing by a lot. The most bullish element is the very late origin of Wednesday’s last downleg, so its sponsorship may be weak-handed and more easily rejected. But if Thursday’s open isn’t gapping up to resume the recovery, then it’s probably gapping down and targeting a retest of Monday night’s low down to 2509-2511.
- 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))
Gapping down Wednesday immediately filled the gap back down to Tuesday’s 1.2366 open. Rather than bounce to form a low, the balance of the morning trended down relentlessly to probe 3-week old “lower prior highs” down to 1.2270. A second consecutive close Thursday under 1.2725-1.2730 would be difficult to recover before probing sharply lower.
Gold Apr Contract (GC, ETF: (GLD))
Not recovering Tuesday’s reversal session almost immediately Wednesday had made the pattern likelier to extend down intraday. Its fresh lows at 1313.50 touched January’s low, suggesting that the hesitation here is only obligatory and likely to resolve down. Closing under 1312.50 would next target 1291.50.
Silver Mar Contract (SI, ETF: (SLV))
Already being well out of proximity to recover at least 16.95, Tuesday’s intraday reversal was likely to extend Wednesday. Closing under 16.40 is next targeting 16.15.
30-year Treasury Mar Contract (US, ETF: (TLT))
Relatively narrow ranging overnight gave way through Wednesday morning to attack Monday’s 144-12 low down to at least 144-17.
A new low close is still required.
Crude Oil Mar Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Tuesday’s sideways ranging, instead of a recovering 64.20, made any new weakness likely to test 61.50. Wednesday morning’s slide probed it during the noon hour down to 61.25. The pattern can’t tolerate much delay in reversing up to reinstate the 67.15 target.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Flat-to-lower ranging Wednesday fluctuated around Tuesday’s 2.69 low, still not attacking the 2.86 buy signal but also not extending down.
Mid-day Update… Not so fast, there.
Morning rally is retraced.
The open’s 2681-2686 range had resolved up sharply. Yesterday’s late 2700 high was recovered, the 2707 bias-up signal was triggered, 
and eventually its 2722 bias-up target was probed up to 2727.
Then the bias-up environment began lapsing. The predictable was done and RSIs were deteriorating. Dipping into the noon hour eventually broke lower to probe most of the open’s 2681-2686 range. That also held the 2690.25 bias-down target through 1:20 to avoid renewing the bias-down signal. And now a bounce just touched 2706.
Despite not renewing the bias-down signal, this is still a bias-down environment. Its 2701 bias-down signal should define the window’s upper-end regardless of already having met its target. Recovering it through the bias environment exit would be credible for another short-squeeze like yesterday. Meanwhile, probing above it would require its retest before rallying would be reliable.
Back under 2697.50 (being tested now) would start to signal another downleg underway. This being Wednesday that has already rallied decisively while satisfying buying pressure, there’s vulnerability to a Wednesday Wreveral that ends the session decisively negative. But that bearish potential should be obvious before entering the final hour if it’s going to develop today.
Look ahead: Economic Calendar – for Thu Feb 8, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Thursday’s most influential calendar items aren’t reports, but a Fed speaker and the 30-year auction. The former has had little effect on price action. But the latter tends to inhibit price action before its results, and then at least rally briefly in relief afterward.
Jobless Claims
8:30 AM ET
*Neel Kashkari Speaks
9:00 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
EIA Natural Gas Report
10:30 AM ET
*30-Yr Bond Auction
1:00 PM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET