Posts by Rod David
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2786.75 | 2787.50 |
| …would target | 2793.75 | 2794.50 |
| Bias-down: under | 2771.75 | 2772.50 |
| …would target | 2765.00 | 2766.75 |
| Signal status: LATE NO-BIAS, TESTED BIAS-UP SIGNAL | 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)
It’s going to take a lot more to kill this rally than the Dow plunging 385 points, and S&Ps down 39 points from high to low. 
Not a lot more, not if the market really wants it.
Not because so much energy has been expended already — Tuesday’s close was under Friday’s “lower prior highs,” so sellers did gain traction, keeping the door open to extending down Wednesday. But “unfinished business above” at Monday’s 2801.00 open should be retested before any durable decline.
Also still outstanding is a new trend high close as became required by Friday’s. And the ongoing series of higher highs and higher lows remains intact. Although sizeable by any measure, Tuesday’s plunge didn’t threaten the last relative low. Regardless, extending down without delay would next target lower prior highs at 2760.00 and 2750.00.
This being expiration week (and WedEX about to trigger), volatility at new highs can cut both ways, in sequence. With sellers having gained traction, rallying immediately Wednesday all but requires gapping up, which expiration volatility could easily accommodate. Filling the gap back to Tuesday’s open could easily probe the 2808.50 high, too.
A couple of other attractions may be influential. Tuesday afternoon’s late no-bias trending almost requires retesting its 2790.50 bias-down signal. And oversold RSIs at Tuesday’s low require retesting its 2769.25 low.
- 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))
The holiday weekend’s gap up was preserved into Tuesday. That required a lot of energy, which has now been fulfilled, so any new weakness would be credible for extending down. By implication, any new weakness could be a significant turning point for the USD.
Gold Feb Contract (GC, ETF: (GLD))
Friday’s post-close rally to fresh highs and its extension Sunday night up to 1345.00 were retraced entirely overnight. Tuesday’s flat open eventually firmed into the close, barely jeopardizing the buy signal that had already triggered through Friday’s open.
Silver Mar Contract (SI, ETF: (SLV))
Friday’s post-close rally above 17.15 to fresh highs and its extension Sunday night to 17.45 were retraced entirely overnight to pierce under Thursday’s 16.85 low. Recovering to unchanged into Tuesday’s open later closed 5-10 cents higher to suggest another rally attempt will be underway.
30-year Treasury Mar Contract (US, ETF: (TLT))
Bounce potential to 150-16 had been tested, and then extended Monday night to make the bounce potential to 151-26 also likely to be tested before resuming the decline. Tuesday’s test of 151-00 reacted down but held 150-16 to keep alive the potential for extending the temporary bounce.
Crude Oil Feb Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
The bounce from Friday’s dip to the 63.15 pullback limit persisted into Tuesday’s open, albeit still short of the rally’s 64.75 that had been tested already.
Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
Gapping down from Friday’s test of the rally’s initial 3.17 target had room down to “lower prior highs” at 3.05, which were tested overnight. Holding the pullback limit’s test through the morning was recovered to fill the gap back up to 3.17.
Mid-day Update… Working through demand.
Now testing Friday’s highs.
Friday’s 2786.50 cash session close was the product of firming throughout the afternoon to probe the morning’s 2786.00 high. Extending into the weekend touched 2790.00. Despite this morning’s surge touching 2808.50, its reaction down is now testing 2790.00 as support. By more than 2 points.
And there’s no indication of recovery.
Both 1-minute and 3-minute RSIs are hovering above oversold. Barely threatening to get oversold, certainly not getting oversold, while the afternoon’s bias-down has triggered. Sellers aren’t getting ahead of themselves.
The next lower chart objective is 2784.00-2785.00, which includes this afternoon’s bias-down target. Lower prior highs under 2780.00 are 2760.00 and 2750.00. And each is equally vulnerable to being tested if today’s close is back under Friday’s highs — regardless of the gap now outstanding back to today’s 2800.75 opening print.
Look ahead: Economic Calendar – for Wed Jan 17, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: No high-profile or influential econ reports are scheduled Wednesday, although the Bank of Canada decision should have a little of both. Volatility tends to contract ahead of the afternoon’s Beige Book. But there are two Fed speakers closely following to keep volatility alive.
BOC policy statement
11:15 AM ET (?)
MBA Mortgage Applications
7:00 AM ET
Redbook
8:55 AM ET
Industrial Production
9:15 AM ET
Housing Market Index
10:00 AM ET
*Beige Book
2:00 PM ET
*Charles Evans Speaks
3:00 PM ET
*Robert Kaplan Speaks
3:15 PM ET
Treasury International Capital
4:00 PM ET
Loretta Mester Speaks
4:30 PM ET