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 Mar Contract (EC, ETF: (FXE, UUP))
Two days of early strength held tests of Friday’s high as resistance. Closing back under Friday’s low or lower prevented gaining traction. None of which prevented Thursday’s open from gapping up even higher and trending up through the morning. Trending back down through Friday morning would be credible for having ended a corrective rally. Otherwise, fresh highs are in-play.
Gold Apr Contract (GC, ETF: (GLD))
Wednesday’s FOMC reaction continued the intraday recovery from probing fresh lows. But Thursday did not extend the reversal, which would still be credible if resumed into the weekend.
Silver Mar Contract (SI, ETF: (SLV))
Gapping down Thursday held another test of 17.11 support to avoid launching a new downleg. Back above 17.30 would be credible for at least retesting last week’s high, but there is otherwise no further requirement.
30-year Treasury Mar Contract (US, ETF: (TLT))
Another inappropriate bounce Wednesday had already been retraced to its origin, but the retracement avoided fulfilling a required new low close. Thursday’s fresh lows did fulfill the decline’s minimum objective, but now Friday’s Employment Situation report is being greeted from a position of weakness.
Crude Oil Mar Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Bouncing overnight greeted Thursday’s open testing 65.35 resistance whose recovery would launch the next upleg targeting 64.20. But the session only ranged around it, not establishing that momentum has reversed up.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Having fulfilled all upside requirements, at least a pullback became possible. Thursday overcompensated by gapping down through the 3.10 pullback limit and collapsing under 3:05. The recent rally was retraced back down to three-week old lows testing 2.85.
Mid-day Update… Groundwork.
Support defended, drop retraced.
Sliding, collapsing and ultimately plunging ahead of the open probed yesterday’s low, and recovered. Yesterday’s low had held 2814.50, which this morning’s 
open tested, and recovered. This morning’s bias-down parameters triggered, and were tested, and now recovered.
Buyers have absorbed a lot.
Now this afternoon’s 2835.00 bias-up signal has been tested. Thoroughly. It failed to trigger, either way. It wasn’t exceeded to trigger bias-up, and it wasn’t rejected at both 1:20 and 1:30 to trigger noN-bias. Its target above isn’t in-play, and it’s not required to hold as resistance.
That said, a pullback to 2824.50-2827.50 is possible while still being only a temporary pullback. Regardless, closing above 2835.00 is the minimum level for any reliability to react favorably tomorrow and extend back to the highs. But greeting payrolls from too deep of a pullback would re-open the room down to 2805.00 and 2793.50.
Look ahead: Economic Calendar – for Fri Feb 2, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s payrolls report is often provided separately in a vacuum, with no other reports around it. That’s not the case Friday, and any obvious reaction to the pre-open report is likely to be duplicated by the post-open reports — one of which is high-profile and already reliably influential to price action.
*Employment Situation
8:30 AM ET
*Consumer Sentiment
10:00 AM ET
Factory Orders
10:00 AM ET
Baker-Hughes Rig Count
1:00 PM ET
*John Williams Speaks
3:30 PM ET
Afternoon Bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2834.25 | 2835.00 |
| …would target | 2840.75 | 2841.50 |
| Bias-down: under | 2827.00 | 2827.75 |
| …would target | 2821.25 | 2822.00 |
| Signal status: noN-BIAS, TESTED BIAS-UP SIGNAL | FAQ | |
| NEW! Flowcharts: Bias-UP // Bias-DN INTRO VIDEOS #1 and #2 |
||
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… Try, try (etc.)
Overnight strength fades, yesterday’s lows hold.
The problem with yesterday’s late rally was that it expended a lot of buying pressure without closing above a relevant level. It closed within proximity to a relevant level whose recovery through this morning’s open would have reversed the trend up. But that level was probed overnight and rejected well before the open.
Which might prove to be very bullish.
Yesterday’s double bottom had held a test of the 2814.50 objective that fulfilled the morning reversal’s selling pressure. It also held a test at this morning’s open. And that was after absorbing a probe under yesterday’s lows down to 2809.50. It was enough to launch another recovery attempt up to 2826.00. But not enough to avoid triggering bias-down.
Which might also prove to be very bullish.
Bias-down was delayed. Its 2818.50 was already tested, and now retested. Sellers are expending energy without gaining traction for their effort — more so, their selling pressure is being fulfilled. And unlike yesterday’s late 20-point surge, optimism is (relatively) restrained.
Firming into the afternoon would be bullish, albeit difficult to extend too much ahead of tomorrow’s payrolls and today’s post-close earnings onslaught. Potentially more bullish would be another downdraft that probes yet lower down to 2805.00 before recovering back above relevant levels today. Then the risk would be in not recovering.
Which might prove to be very bearish.