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))
Tuesday night’s surge had reversed back down throughout Wednesday’s session, but maintained its second consecutive lower close to require another eventual lower close. Thursday’s gap up back to Tuesday night’s high extended intraday to fill the gap back up to Friday’s 1.2100 close. There is no outstanding attraction above, and back under 1.2030 would resume the decline.
Gold Feb Contract (GC, ETF: (GLD))
Narrow ranging Thursday morning after Tuesday night’s surge to fresh highs doesn’t reject the rally attempt, and almost suggests that it will be retried and extend. Meanwhile, the 1308.85 sell signal remains valid.
Silver Mar Contract (SI, ETF: (SLV))
Thursday’s flat-to-lower ranging pierced the 16.95 sell signal momentarily during the morning, and closed back at it. Any initial weakness would be credible for extending down.
30-year Treasury Mar Contract (US, ETF: (TLT))
Wednesday’s session-long bounce still closed negative, confirming Tuesday’s breakout and requiring another eventual lower close. Bounce potential to higher prior lows around 150-26 or 151-16 remains alive, despite already filling the gap back up to Tuesday’s 150-08 close and holding.
Crude Oil Feb Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
The longstanding 64.25-64.75 target was fulfilled at Thursday morning’s high, which traded out the session flat-to-lower. Back under 63.15 would reverse the trend down.
Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
Thursday’s EIA report was greeted from a position strength, and also from gapping up. Extending higher through the morning retested last week’s 3.07 highs, and a second consecutive higher close on Friday would confirm 3.17 and 3.29 are in-play.
Mid-day Update… Looks familiar.
New high, but holding its target.
The reaction from the open’s 2759.50 high had reacted down to 2753.25. Being pessimistically short of actually touching last week’s 2560.00 high,
its recovery was likely. And its recovery was likely to be measured in points, not ticks.
In fact, the morning’s high did touch 2760.00 before the bias environment began lapsing. Its reaction into the noon hour was recovered to probe fresh highs up to 2765.50.
That’s also a test of this afternoon’s 2765.25 bias-up target. It held through 1:20 to avoid renewing the 2759.25 bias-up signal. But this is still a bias-up environment. If tested, 2759.25 should define the window’s lower-end. It can be broken durably later.
Nothing requires reversing down. Extending up is possible, but less likely since relevant resistance held through a relevant window. Meanwhile, this afternoon is vulnerable to backing-and-filling, and potentially reversing back down.
Look ahead: Economic Calendar – for Fri Jan 12, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s pre-open CPI is both high-profile and influential to price action. The post-open reports aren’t either, at least not to the degree that they would be any likelier to duplicate any price reaction to CPI.
*Consumer Price Index
8:30 AM ET
Retail Sales
8:30 AM ET
Business Inventories
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 | 2758.25 | 2759.25 |
| …would target | 2764.50 | 2765.25 |
| Bias-down: under | 2451.75 | 2752.50 |
| …would target | 2746.25 | 2747.25 |
| Signal status: BIAS-UP, BIAS-UP TARGET MET | 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.
Post-open Review… Two steps forward.
Attacking new highs.
After spending all of yesterday in negative territory, gapping up above relevant levels would be the only immediate path higher today. The least of those relevant levels was this morning’s 2752.00 bias-up signal. 
It was only attacked to within 3 ticks from 2756.50 above by a dip into and out of the open.
Maintaining the open’s gap kept alive upside momentum. The dip was recovered by almost a 7-point rally to fresh highs at 2759.50. The 2757.50 bias-up target was fulfilled along the way.
Touching the bias-up target during the open added a new dynamic, or adapted an old one. Its recovery through 10:15 became as important as was maintaining the gap up above the bias-up signal. Where the first setup succeeded, the second one failed. It’s still a bias-up environment, but whose bias-up target was no longer being exceeded at 10:15.
Near-term resistance at 2759.25 reacted down to violate its pullback limit, extending at least 6 points to 2753.25. But now near-term support at 2753.75 has just held a test, as did 2759.25 above. The pullback may have ended.
Since the initial rally stopped 2 ticks pessimistically short of touching Tuesday’s high, probing it is likely — and likely to be measured in points, not ticks, such as 2765.25. Meanwhile, still being a bias-up environment, a test of the 2752.00 bias-up signal should define the window’s lower-end. It can be broken after the bias environment begins lapsing without requiring a recovery.