Posts by Rod David
Market Wrap (recording & summary)
Thursday’s market was caught between a relentless series of dueling headlines ahead of the afternoon’s government-shutdown votes. Retail buyers were also inhibited by shock and disappointment in not being greeted by the open gapping up. Price action was generally sloppy throughout the day. Behaviors and relationships were otherwise normal. Overnight choppiness projecting intraday choppiness was fulfilled. Relevant levels held tests through relevant windows, or were recovered. Although not required, there’s still potential for a probe of new highs before the bearish WedEX begins influencing Friday afternoon.
- 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))
Wednesday’s gap down had been recovered to fill the gap back up to Tuesday’s close, which held, robbing the recovery of its momentum. Thursday only ranged narrowly, with no objectives or attractions outstanding.
Gold Feb Contract (GC, ETF: (GLD))
Thursday’s dip extended the overnight reversal from fresh intraday highs above 1340.00, and tested the range’s lower-end down to 1324.50. While the pattern is not likely to be a durable top, another break lower Friday would be credible for a multi-session detour.
Silver Mar Contract (SI, ETF: (SLV))
Thursday morning dipped deeper from Wednesday’s intraday rally that had reacted down post-close. The range’s 16.95 sell signal was tested, and must hold to keep alive the likely retest of recent higher, if not also the potential for a new upleg.
30-year Treasury Mar Contract (US, ETF: (TLT))
Closing under 150-16 Wednesday undermined the potential for extending the corrective bounce to 151-26 before resolving down. Trending down overnight to 149-10 gapped down Thursday and immediately filled the gap back to the week-old opening gap that had required being filled. A fresh low close remains required, too.
Crude Oil Feb Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Thursday’s narrow ranging held above the 63.15 pullback limit and the 64.25 buy signal, forming a Symmetrical Triangle. The pattern suggests its first break will be false, before reversing more substantially in the opposite direction. So, breaking higher or lower — probably higher — will likely be only temporary.
Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
Having fulfilled the pattern’s buying pressure Wednesday at its 3.29 target, room for a pullback was exploited by the knee-jerk reaction to Thursday’s EIA report. The 3.10 pullback limit ultimately held, but can’t tolerate much delay in extending higher.
Mid-day Update… Getting over it.
Disappointment becomes complacency.
The premise for anticipating this morning’s drop was a general disappointment in not having extended the rally overnight. Opening at the 2799.75 overnight lows bounced once, then fell to fresh lows at 2795.75. Its reaction up to 2803.00 avoided triggering bias-down.
Apparently, the disappointment lingered, as the bias environment’s exit probed fresh low at 2793.75. Its reaction only attacked 2802.00. Neither bias signal was tested, so no-bias triggered.
Enthusiasm hasn’t yet become the dominant sentiment again. If the bias environment exit isn’t extending down, a probe of fresh highs remains likely. Meanwhile, the market seems hesitant to rally among government-shutdown headlines that are swirling about.
Look ahead: Economic Calendar – for Fri Jan 19, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: No public agency reports are scheduled for Friday, so the potential government shutdown shouldn’t impact the econ calendar. The post-open report has a track record for influencing price action. That might be a function to some degree of also being high-profile, which won’t be as much the case in case of a shutdown.
*Consumer Sentiment
10:00 AM ET
Baker-Hughes Rig Count
1:00 PM ET
Afternoon Bias
| THU afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2802.00 | 2803.50 |
| …would target | 2808.25 | 2809.50 |
| Bias-down: under | 2792.25 | 2793.50 |
| …would target | 2786.00 | 2787.50 |
| Signal status: NO-BIAS | FAQ | |
| NEW! Flowcharts: Bias-UP // Bias-DN INTRO VIDEOS #1 and #2 |
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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.