Posts by Rod David
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2842.00 | 2843.00 |
| …would target | 2848.25 | 2849.25 |
| Bias-down: under | 2834.50 | 2835.50 |
| …would target | 2827.50 | 2828.50 |
| Signal status: STILL TESTING BIAS-DOWN SIGNAL, TESTED BOTH BIAS-UP PARAMETERS | 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)
Wednesday’s 30-point drop from high-to-low only rivaled last Tuesday’s 39-point high-to-low intraday drop. Their afternoon bounces differed in all but one relevant element. Last Tuesday afternoon’s bounce was resisted by “higher prior lows” of the previous afternoon. But Wednesday’s bounce was probing back above the similar structure from Tuesday.
That difference allowed a gap up last Wednesday to target a retest of the prior day’s open and its high. But this time a gap up Thursday would have to be above Wednesday’s open before putting into play a retest of Wednesday’s high. Regardless, both open’s gapped up above all prior highs, so both require being filled intraday.
None of which requires filling the gap back up to Wednesday’s 2848.00 open immediately. It’s likely to be tested sooner rather than later, if only because Wednesday afternoon’s 2839-2845 range was within its orbit. Its test can be influential overnight, but its attraction can be neutralized only intraday.
Meanwhile, Wednesday afternoon’s rally originated from under its 2835.50 bias-down signal, during its bias-down environment. Similar to “no-bias trending,” the bias-down signal must be retraced. And the delay in retracing it makes its 1:20 bias timing print likely to be retraced, too… at 2827.00. Either of these retracements can be neutralized overnight.
One thing becoming more likelier, if not more obvious, is that the market has entered a distributive phase. Rising prices intraday do not dictate resolution, and the intraday behaviors are revealing cracks.
- 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))
Breaking out Tuesday from a 4-day range was well-rewarded overnight by gapping up sharply Wednesday above prior highs. The next objective’s resistance is 1.2465 where a correction down to 1.2325 would become likely.
Gold Feb Contract (GC, ETF: (GLD))
Outperforming other metals on Tuesday had maintained the rally. Gapping up $15 to new highs at 1352.00 extended almost $6 higher intraday, next targeting 1368.50 so long as pullbacks now hold 1345.50 as support.
Silver Mar Contract (SI, ETF: (SLV))
Tuesday’s false break under 16.95 was retraced but not rejected. That was done by recovering 16.11 overnight. Extending to gap up above 17.30 was extended to test 17.50 through the noon hour, next targeting 17.72 so long as 17.35 now holds as support.
30-year Treasury Mar Contract (US, ETF: (TLT))
Holding the 149-10 bounce limit after Tuesday’s bounce kept alive the downtrend, still likely to probe fresh lows. Trending down overnight gapped down to fresh lows Wednesday, still likely to probe lower.
Crude Oil Mar Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Gapping up and extending higher Wednesday fulfilled the minimum upside potential above the 64.20 buy signal to 65.35. Extending higher would next target 67.15, which remains in-play so long as 64.20 now holds as support.
Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
Surging sharply to fresh highs after Tuesday’s close touched 3.62. Hovering there overnight only tested it, and Wednesday morning dipped back down to 3.46. That was still positive territory, a second consecutive higher close confirming Tuesday’s breakout, and now requiring at least one more eventual higher close — regardless of an interim pullback.
Mid-day Update… A gap too far.
Extending higher only stretched the rubber band.
The open’s gap up to 2848.00 is above all prior intraday highs. Its brief dip to 2845.50 support recovered as was expected, retesting the 2850.25 overnight high. 
The retest extended ultimately to 2855.25.
Ultimately, but gradually. This was not a good spot for enthusiasm to wane.
In this morning’s Market Tour I described the overnight rally as potentially being the failed follow-through to Monday’s capitulation. Tuesday’s pre-open dip had injected a bit of pessimism to keep alive the upside momentum. This morning’s pattern went the other way, injecting quite a bit of optimism.
Back under 2851.00 resumed the decline. This morning’s 2843.00 bias-up signal was broken when the bias environment came within view of lapsing. And now this afternoon’s 2829.50 bias-down target is exceeded to renew the bias-down signal.
Extending down further isn’t required, but this afternoon’s 2835.50 bias-down signal could contain a bounce. In fact, it’s trying to do that right now, after bouncing to 2838.00. Probing above 2835.50 during the bias-down environment would be a bias-down rally. Like no-bias trending, it would be doomed to failure, and require being retraced to the 2835.50 bias-down signal and possibly the 2827.00 10:15 print.
Meanwhile, a bounce back to the 2848.00 may be underway. Its test is likely at least to attack 2850.00. Regardless, today’s close either above or below yesterday afternoon’s 2837.00-2843.50 range would be predictive of the next major leg.
Look ahead: Economic Calendar – for Thu Jan 25, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Thursday’s calendar as usual is the week’s busiest. It’s also the highest-profile. Least of which is the econ reports, compared to the pre-open ECB policy statement and Mario Draghi conference call. Its influence could be greatly leveraged by the USD collapse in January, and the US comments about it on Wednesday. Almost any obvious reaction to it is likely to be duplicated by post-open reports, of which only one is otherwise reliable for influencing price action.
ECB policy statement / Draghi Q&A
7:45 AM / 8:30 AM ET
International Trade in Goods
8:30 AM ET
Jobless Claims
8:30 AM ET
Retail Inventories [Advance]
8:30 AM ET
Wholesale Inventories [Advance]
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
New Home Sales
10:00 AM ET
*Leading Indicators
10:00 AM ET
EIA Natural Gas Report
10:30 AM ET
Kansas City Fed Manufacturing Index
11:00 AM ET
7-Yr Note Auction
1:00 PM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET