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 Jun Contract (EC, ETF: (FXE, UUP))
Having entrenched the downside by confirming Thursday’s breakout under 1.1465, Monday exploited the opportunity for a corrective bounce. The decline should resume by Tuesday’s close.
Gold Apr Contract (GC, ETF: (GLD))
Monday’s fresh highs suggest again that the rally has resumed, albeit once again needing a second consecutive higher close to confirm.
Silver May Contract (SI, ETF: (SLV))
Monday’s gap up hovered at last week’s highs, not quite qualifying as a breakout, but still likely to extend higher intraday in case of any early strength Tuesday.
30-year Treasury Jun Contract (US, ETF: (TLT))
Room for a pullback down to 147-25 wasn’t even attacked before Monday recovered to probe fresh highs. Closing above 149-04 fulfills the minimum requirement of last week’s confirmed breakout, and requires holding 149-00 support to maintain the upside momentum.
Crude Oil May Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Uptrending support that had coincided with Friday’s 58.25 low was retested Monday, and held. If the pullback limit has held, then Tuesday should hardly delay extending higher to greet Wednesday’s EIA report from a position of strength. Otherwise, closing under 58.25 would greet EIA from a position of weakness.
Natural Gas Apr Contract (NG, ETF: (UNG, UNL))
Sunday night’s gap down under Friday’s 2.72 low was retested intraday. The retest held, and launched a bounce that filled the gap up to Friday’s 2.75 close. Closing beyond either end of the 2.71-2.75 range Wednesday — which allows two days to get either done — would be likely to extend in that direction.
Mid-day Update… Sloppy and choppy pause from toppy and droppy.
Buyers missed a path higher.
The post-open surge testing 2813.00 had collapsed back down to the 2790.25 overnight low. All of which was recovered into the morning bias environment lapsing. And then no more. Any higher for any longer could have isolated the morning’s probe of fresh lows, and opened the door to an afternoon short-squeeze.
Trending back down through the noon hour and into the afternoon bias environment has retraced the morning’s rally to almost 3 points from its 2790.25 lows. That’s 5 points under this afternoon’s 2798.75 bias-down signal, which did not trigger.
So, this is no-bias trending that requires a retracement to 2798.75, perhaps also the 2803.00 1:20 print. Then what I’ve been calling a “sloppy and choppy” afternoon will be able to resume its “toppy and droppy” downside. Resolving down prematurely would still get every benefit of the doubt for being able to extend down anyway, with only a recovery above 2804.00 suggesting a rally into the close.
Look ahead: Economic Calendar – for Tue Mar 26, 2019
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Three housing sector reports on Tuesday increase the opportunity for an outlier or other contradiction to send confusing signals to the market. Any obvious reaction to a pre-open report is likely to be duplicated in reaction to a post-open report, although only one also has a reliable track record for influencing price action.
Patrick Harker Speaks
8:00 AM ET
Housing Starts
8:30 AM ET
Redbook
8:55 AM ET
S&P Corelogic Case-Shiller HPI
9:00 AM ET
FHFA House Price Index
9:00 AM ET
*Consumer Confidence
10:00 AM ET
Richmond Fed Manufacturing Index
10:00 AM ET
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2806.00 | 2811.50 |
| …would target | 2812.00 | 2817.50 |
| Bias-down: under | 2793.25 | 2798.75 |
| …would target | 2795.75 | 2791.25 |
| Signal status: NO-BIAS, TESTED BIAS-DOWN SIGNAL | . | |
| BIAS VIDEOS… INTRO // EXAMPLE | ||
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… Round-one is done.
Gap down recovery is rejected.
The 2790.25 overnight low had been retraced up to 2810.25 before the open.
Flat-to-lower ranging greeted the open at 2802.00 where a blip-down to 2799.00 snapped back up to test the 2813.00 Globex opening print. It held.
The 2813.00 Globex opening print not only held, but it snapped back down to 2799.00, and then through it to touch the 2790.25 overnight low. No lower.
Back above 2798.25 has triggered a bounce whose 2709.00-area target is met. Fluctuating choppily around it is threatening to become something much more substantial than only a temporary bounce:
Coming out of the bias environment back in positive territory would form a sort of Isolation setup. Accumulative, exactly as last week’s failed rallies were distributive. Like any setup, fully forming without triggering — in this case, reversing down again after only recovering — could be as bearish as the reversal would have been bullish.
The bounce is testing its 2811.50 inflection point, and retesting resistance at the 2813.00 Globex opening print. Back under 2805.00 would signal that buyers failed, possibly also marginalizing them for the day. But extending higher into the noon hour would more likely target 2830.75.