Posts by Rod David
Market Wrap (recording & summary)
Tuesday’s overnight range broke higher very near the open, which is usually unsustainable. In fact, it was retraced back down to “lower prior highs” at 2748.00 from 2753.50. That opening range was round-tripped once more but never probed any lower. And there was still time for the bias environment to fulfill its 2757.50 bias-up target by 1 point.
The afternoon bias environment probed higher to 2760.00 but was exited under the morning’s highs. Selling resumed, although signals were slow to extend, but ultimately retested the 2751.00 opening print. Similar opening and closing levels at a new extreme often identify that extreme as being durable. So, any distributive or reversing price action will be that much more credible.
Meanwhile, there’s Tuesday afternoon’s bias-up. It triggered, barely, after barely invoking the grace period. And it barely printed a higher high. But however shallow, it did print a higher high, and the opportunity to reject it was not exploited. So its 2765.25 bias-up target barely becomes “unfinished business above.”
- 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))
Gapping down again Tuesday without recovering intraday confirms Monday’s break under the 1.2060 sell signal. Bouncing first to fill the gap back up to Friday’s 1.2100 close would be likely to reverse back down more substantially. But first extending down to lower prior highs at 1.1950 would have a better chance at launching a new rally leg.
Gold Feb Contract (GC, ETF: (GLD))
Monday’s first session not to probe a prior session’s high was followed by overnight weakness that attacked the 1308.85 sell signal. Extending lower without delay could also accelerate into a down-crash.
Silver Mar Contract (SI, ETF: (SLV))
Overnight weakness retested Monday’s probe of last week’s lows, actually touching the 16.95 sell signal, which held to avoid triggering a reversal.
30-year Treasury Mar Contract (US, ETF: (TLT))
Already sitting at or under uptrending pivotal support for the second time since it had formed, its immediate rejection at Tuesday’s open was the only bullish path higher. But overnight weakness suggested otherwise, and the morning dipped sharply back to and through last month’s 150-14 prior low to at least 150-06.
Crude Oil Feb Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
There was no bullish reason to retest 61.10 as support, or to further delay resuming the rally targeting 64.25-64.75. The overnight blip-up to 62.55 wasn’t retested immediately, but eventually Tuesday morning start probing above it. Extending higher through the afternoon attacked 63.25 .
Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
Monday’s dip had filled the gap back down to Friday’s close, so that a close above 2.86 would be that much more reliable to launching a durable rally leg. Tuesday morning’s brief tests eventually probed more than a nickel higher to trigger the buy signal.
Mid-day Update… Still eking.
Barely triggering bias-up.
Another touch of the open’s 2748.00 low reacted back up to the morning’s 2753.50 highs. The reaction extended as the bias environment came within view of lapsing. Higher high probed the 2757.50 bias-up target by 1 point before the bias environment began lapsing.
That probe’s 2758.50 high happened to become this afternoon’s bias-up signal. Ranging flat-to-lower through the noon hour showed no interest in resuming the rally. But the noon hour exit was attacking the morning’s high to within 1 tick. It was touched just in time to invoke the grace period.
Attacking 2758.50 to within 1 tick, and touching it within the last minute. Actually triggering bias-up is no less hesitant. While 2758.50 was recovered in time to trigger late, it was recovered by 1 tick. AND there’s still no further improvement 10 minutes later.
I’ll give the bias-up signal a benefit of the doubt. But sellers aren’t marginalized. And back under 2757.00 would be credible for reversing momentum down anyway.
Look ahead: Economic Calendar – for Wed Jan 10, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday’s two Fed speakers are Wednesday’s only high-profile or influential events. But there are pre-open reports, and any noticeable reaction to either would be likely to be duplicated in reaction to post-open reports.
MBA Mortgage Applications
7:00 AM ET
Import and Export Prices
8:30 AM ET
*Charles Evans Speaks
9:00 AM ET
Atlanta Fed Business Inflation Expectations
10:00 AM ET
Wholesale Trade
10:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
10-Yr Note Auction
1:00 PM ET
*James Bullard Speaks
1:30 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2758.00 | 2758.50 |
| …would target | 2764.75 | 2765.25 |
| Bias-down: under | 2749.50 | 2750.00 |
| …would target | 2744.50 | 2745.00 |
| Signal status: LATE BIAS-UP | 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.