Posts by Rod David
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2728.00 | 2727.75 |
| …would target | 2733.00 | 2733.00 |
| Bias-down: under | 2718.00 | 2718.00 |
| …would target | 2711.25 | 2711.00 |
| 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 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 close above 2703.00 had put into play 2722-2727, which was already tested Thursday. Breaking beyond either end of the 2722-2727 range would be likely to trend in that direction. There’s no timing requirement to resolving the range. Obviously there’s not, as the targets’ morning tests bounced to either side of the 2722-2727 range through the close.
Sliding through the cash session close attacked the 2722-2727 range’s lower-end. It held, but it had already become too late for a break to be relevant. And that was after another effort to break lower had held 2724.50 through the proxy window.
Perhaps the late-afternoon’s weakness was caused by anxiousness ahead of the next morning’s Employment Situation report. Trending back up Friday morning could resume the rally, although still being vulnerable to reversing down into the weekend. Already trending down overnight might extend, but would leave a gap back up to Thursday’s close wanting to be filled.
- 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))
Holding 1.2060 support Wednesday kept alive the rally’s momentum, at least to fill the gap back up to Tuesday’s 1.2100 close and also to more thoroughly test the rally’s 1.2140 upper-end of its target area that was attacked Monday night. Thursday’s gap up almost immediately fulfilled both, and ultimately held without triggering any higher objective.
Gold Feb Contract (GC, ETF: (GLD))
Wednesday’s post-close test of 1308.85 down to 1307.00 was recovered into Thursday’s open, which then extended higher through the noon hour to test 1322.00. That was still almost a dollar short of Monday night’s high, “ineffectual optimism” that can’t tolerate another test of support.
Silver Mar Contract (SI, ETF: (SLV))
Sliding deeper after Wednesday’s close was able to hold a test of 17.05 support and greet Thursday’s open unchanged. Extending through the morning probed fresh recovery highs at 17.30, but closed back at or under the week’s two prior highs. Almost any immediate selling pressure Fridaywould be credible for extending down into and out of the weekend.
30-year Treasury Mar Contract (US, ETF: (TLT))
Ranging sideways overnight had tested Wednesday’s lows ahead of Thursday morning’s ADP report. The low’s were probed a little to attack 151-16 as support, but eventually recovered to try filling the gap back up to Wednesday’s 152-11 close. Regardless of closing in positive territory or not, closing above 152-22 Friday would target fresh recovery highs.
Crude Oil Feb Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Extending higher without delay Thursday tested 62.20, now needing to hold 61.10 on pullbacks for potential to 64.75.
Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
Thursday’s EIA report was greeted from a position of strength, but that didn’t prevent reacting down through the noon hour. Thursday’s 2.86 low was tested as support, and must hold to avoid a deeper pullback to 2.78 before recovering.
Mid-day Update… Targets met.
Morning surge is holding.
The open’s rally had peaked initially upon testing 2722.00. Its reaction down snapped back up into a 9-point surge to 2729.00. The portion that probed above the 2722.00 target was quickly retraced. And soon, so was the portion that probed above 2722.00.
2722.00 has since held. Its reaction up has stopped short of 2722.00. Twice. And now it’s being attacked again. There’s room up to 2727.75 without yet resuming the rally. Back under 2724.00 would start to signal another downleg underway.
There’s not timing to which way the 2722-2727 range resolves. But its resolution should extend in that direction. Resolving down and closing under 2703.00 could lead to a much deeper retracement of the recent rally. Extending higher would next target 2730.00 and 2733.00.
Look ahead: Economic Calendar – for Fri Jan 5, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s calendar is quite busy, which is unusual when also reporting monthly payrolls. The reaction to the pre-open report is likely to be duplicated by post-open reports, if not also to either of the two Fed speakers.
*Employment Situation
8:30 AM ET
International Trade
8:30 AM ET
Factory Orders
10:00 AM ET
ISM Non-Mfg Index
10:00 AM ET
*Patrick Harker Speaks
10:15 AM ET
*Loretta Mester Speaks
12:30 PM ET
Baker-Hughes Rig Count
1:00 PM ET