Posts by Rod David
Market Wrap (recording & summary)
Bearish. Two days of hammering back at intraday rallies were joined Wednesday by a third. 
It was the most dramatic of the series, completely retracing a 24-point rally within 4 hours.
The rally was helped by having probed Tuesday’s 2829.00 low uncharacteristically ahead of FOMC — thanks to a barrage of Brexit headlines, topped off by a Trump China trade comment that spiked to fresh lows attacking 2817.00. So much weak-handed discounting ahead of FOMC made it almost impossible not to react favorably. The policy statement was greeted at 2825.25 and surged to 2842.50, then extended up to test 2849.00.
All of which was “no-bias trending” for originating during a no-bias environment, requiring a retracement of the 2828.75 bias-up signal. It was met before the position-squaring window opened, and retested into the close. No-bias trending can also retrace the 1:20 print, which was essentially 2823.25, and it was touched after the futures close. There is no “unfinished business,” above or below.
But there is a three-day pattern of retracing ever-larger intraday rallies. And the series’ third was both the biggest retracement AND the lowest. The market may be playing defense into the weekend if Thursday morning hasn’t recovered Wednesday’s high.
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 Jun Contract (EC, ETF: (FXE, UUP))
Still hovering at recent highs ahead of Wednesday afternoon’s FOMC events. Avoiding the 1.1405 sell signal required almost literally exploding higher to 1.1525, which was the reaction to FOMC. Upside momentum remains intact above 1.1500, and momentum reverses down under 1.1465.
Gold Apr Contract (GC, ETF: (GLD))
Tuesday’s choppy sideways ranging repeated Wednesday ahead of the afternoon’s FOMC events, but surged through last week’s highs to 1316.00 in reaction. The rally has likely resumed, so long as the post-close surge isn’t rejected overnight.
Silver May Contract (SI, ETF: (SLV))
Wednesday’s session was greeted by overnight weakness, but the recent range held ahead of the afternoon’s FOMC events. Surging in reaction tested recent highs up to 15.55, needing a second consecutive higher close Thursday to confirm the trend up has resumed.
30-year Treasury Jun Contract (US, ETF: (TLT))
After Tuesday held a test of the 145-16 sell signal as expected, Wednesday’s open gapped back up to the 146-00 buy signal. Neither end of the corridor between signals was broken in time to greet Wednesday’s FOMC events from a position of strength or of weakness. The reaction did immediately recover 146-00 and extend to 147-00. Still, a second consecutive higher close on Thursday would confirm the uptrend had resumed.
Crude Oil May Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Closing under 59.40 Tuesday after at least touching 59.65 intraday had signaled upside momentum had ended. But room down to the 58.50 reversal signal was used for overnight weakness ahead of Wednesday’s EIA report, which triggered a surge up to fresh highs at 60.20. Its reaction down to 59.50 was recovered back to the high, signaling the uptrend remains intact.
Natural Gas Apr Contract (NG, ETF: (UNG, UNL))
Tuesday’s surge above the 2.84 buy signal may not have been confirmed by a second consecutive higher close on Wednesday, but closing above 2.84 again did offer the next best degree of confidence that the trend has reversed up. .
Mid-day Update… Heavily discounted. But also trending.
Weak-handed or not, sellers are being rewarded.
Testing, retesting, and re-retesting this morning’s 2828.50 bias-down signal ultimately held in time to trigger late no-bias. An offsetting test of its 2842.25 bias-up signal was put into play. But it was hardly attacked, but for a structural fresh high at 2833.00.
And then fresh lows were probed down to 2821.00. A recovery seemed to be forming around 2825.00 when a Trump China trade comment triggered a spike down to fresh lows at 2817.25. Now a bounce is retesting 2825.00.
Weak-handed sponsors are likely producing the noon hour’s fresh lows. As likely as they were producing this morning’s lows. Which is to say, so what. They’ve been pretty productive.
Usually trending beyond a prior extreme (yesterday’s lows) would be difficult ahead of FOMC. Of course, usually price action reacts to political uncertainty like this morning’s Brexit headlines.
The latter may have ended for the day, considering what time it is. And the former is about to begin, with the Policy Statement at 2:00 and the Fed Chair Q&A at 2:30. Perhaps those headlines will find price sufficiently discounted for a favorable reaction up — or at least, a recovery from a knee-jerk reaction down.
Look ahead: Economic Calendar – for Thu, Mar 21, 2019
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Both of Thursday’s two pre-open reports are high-profile, but only one has a reliable track record for influencing price action. The post-open report qualifies for both influential and high-profile, and reaction to it is likely to repeat the pre-open price action.
Jobless Claims
8:30 AM ET
*Philadelphia Fed Business Outlook Survey
8:30 AM ET
*Leading Indicators
10:00 AM ET
Quarterly Services Survey
10:00 AM ET
EIA Natural Gas Report
10:30 AM ET
Afternoon Bias
| WED afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2824.00 | 2829.25 |
| …would target | 2828.25 | 2835.50 |
| Bias-down: under | 2815.75 | 2821.00 |
| …would target | 2807.75 | 2813.00 |
| Signal status: NO-BIAS, TESTED BIAS-DOWN SIGNAL | . | |
| BIAS VIDEOS… INTRO // EXAMPLE | ||
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.