Posts by Rod David
Morning Bias
| MON morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2765.75 | 2766.25 |
| …would target | 2773.00 | 2773.50 |
| Bias-down: under | 2752.50 | 2753.00 |
| …would target | 2746.75 | 2747.25 |
| Signal status: LATE NO-BIAS, TESTED BIAS-DOWN SIGNAL, BIAS-DOWN TARGET MET | 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)
January’s rally has now been retraced by 61.8% back down to December’s ~2700.00 highs. “Unfinished business above” at the highs up to 2878.50 requires a retest. There’s no timing element to fulfilling that requirement. Meanwhile, nothing requires this week’s plunge to extend down.
The decline’s next lower objectives under 2805.00 and 2793.50 were met at 2766.00 and 2760.00. Testing the latter and recovering to close back above 2766.00 would have at least suggested sellers had extended themselves. The position-squaring window trended down throughout, and the cash session close equated to 2760.00. Post-close action spiked down to 2755.25.
Extending down this week would next target 2747.00 and 2738.00 then 2722.00. All still within the context of a pullback, but unlikely to begin rallying without first forming an accumulative bottom. So, if this is one of those years with an up-January predicting an up-year, then extending down at all this week would be problematic.
- Details and other markets coverage are discussed in the post-market Wrap recording here.
- REMINDER: THERE IS NO SATURDAY REVIEW THIS WEEKEND
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))
Thursday’s session long rally had retested the prior Thursday’s opening gap. Two interim sessions of distribution were ignored. Those sessions were probed down to 1.2441 in reaction to Friday’s payrolls. Their 1.2490-1.2515 upper-end was probed into the afternoon. Sellers didn’t gain traction, but a fresh low would be credible for extending down.
Gold Apr Contract (GC, ETF: (GLD))
Thursday’s close above 1350.50 had put into play new highs, still needing the confirmation of a second consecutive higher close. But Friday’s gap down to their 1341.00 support probed lower to a “sleeper low” at 1330.50. Its bounce must extend higher coming out of the weekend to reverse momentum up.
Silver Mar Contract (SI, ETF: (SLV))
Reacting down from its 17.30 resistance Wednesday did once again hold it 17.11 support. But Friday’s gap down under 16.95 trended down to fresh lows under 16.65. A second consecutive lower close on Monday would confirm the trend has reversed down
30-year Treasury Mar Contract (US, ETF: (TLT))
The ongoing decline was its most obvious Thursday, and then probed lower overnight. Even the most optimistic session would be prevented from forming a durable bottom ahead of Friday’s Employment Situation report. Its reaction gapped down and trended lower intraday, which is not a bottoming pattern.
Crude Oil Mar Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Not decisively triggering its 65.35 buy signal Thursday didn’t prevent extending higher overnight to fill the gap back up to 66.05. But trending down Friday morning to attack 64.45 was recovered back into positive territory, all ensuring the 67.15 target is in-play.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Friday was the second consecutive downday of reacting back down to a prior buy signal’s support. Its gap avoided being filled, which would have been the most bullish scenario. But recovering from an early fresh low on Monday could launch a recovery.
Mid-day Update… The least path of support.
Morning’s low fails.
One of the latest bullish scenarios would have been proved by entering the noon hour attacking post-open highs. That would have indicated the morning bias environment’s selling pressure was all that sellers could do. It wasn’t; the noon hour was entered at fresh lows.
Even entering the afternoon bias environment above relevant resistance could have indicated sellers were done. There wouldn’t have been the same potential to attract buyers, but first things first. The bias environment was entered at fresh lows.
Despite triggering noN-bias, this afternoon’s 2781.00 bias-down target is being tested. Exiting the bias environment back above its 2786.50 bias-down signal would rob sellers of their traction. Back above 2793.50 could start to reverse the trend up. But meanwhile the risk continues to be that two days of impending illiquidity is leveraging a week of decline to produce even more selling pressure.
Look ahead: Economic Calendar – for Mon Feb 5, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Monday morning’s two post-open reports are relatively high-profile, but not reliable for influencing price action. That said, their staggered release schedule does leverage their influence in case of a surprise.
PMI Services Index
9:45 AM ET
ISM Non-Mfg Index
10:00 AM ET
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET
TD Ameritrade IMX
12:30 PM ET.