Posts by Rod David
Market Wrap (recording & summary)
Tuesday’s open finally postured defensively ahead of the scheduled afternoon tax reform vote in the House. Sliding 7 points from 2697.25 extended down another 2 points to 2688.00 for the morning low. But the defensive posturing persisted into the noon hour’s 2685.50 lows at the afternoon’s bias-down signal.
Ranging higher into and out of the actual vote held 2690.00 resistance. Defensive posturing was no longer needed. But why not. Fresh lows into the final hour reached 2683.25.
That last low had a bullish purpose which the morning’s drop had tried, and the noon hour drop avoided. It was to stretch the rubber band down so it could snap back up. The morning’s test of 2688.00 never recovered 2692.50, and the noon hour’s low only firmed off of the bias-down signal’s test. The final hour’s low attacked 2688.00 and reacted down entirely.
Tuesday afternoon’s 2690.25 bias environment high is the afternoon’s high, and closing action trended down. So, maintaining a gap up Wednesday above 2690.25 would form a session-long rally setup targeting those evasive new highs. Meanwhile, simply extending down would next target 2675.00, and potentially lower.
- 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))
Monday’s 1.1905 61.8% retracement of the drop from Wednesday’s high was retested Tuesday morning and probed into the afternoon, attacking the 1.1930 sell signal that must hold to maintain the decline’s momentum.
Gold Feb Contract (GC, ETF: (GLD))
Probing Monday’s highs overnight up to 1268.50 had disappeared by Tuesday’s open, and the morning dipped down to 1262.50, not rejecting what is already a confirmed reversal next targeting 1283.50.
Silver Mar Contract (SI, ETF: (SLV))
Firming overnight above Monday’s highs was mostly retraced before Tuesday’s open, and then reversed into negative territory through the morning, but was recovered to unchanged.
30-year Treasury Mar Contract (US, ETF: (TLT))
Monday’s 61.8% retracement of the rally from last week’s 152-05 low had room for noise down to 152-22, but Tuesday’s open spiked through it on the way to fresh lows at 151-12. Closing above 151-16 keeps alive the potential that the two-day drop has been a temporary correction, a pattern that would also require recovering 152-18.
Crude Oil Feb Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Firming again Tuesday avoided re-triggering the 56.85 sell signal while still testing the 57.45 bounce limit. Closing beyond either remains likely to extend in that direction, with the downside potentially limited to 55.50.
Natural Gas Jan Contract (NG, ETF: (UNG, UNL))
Closing Monday above 2.71 is a position of strength that makes a recovery likely from dipping to fill the gap back down to Friday’s 2.61 close. Extending higher first would make the recovery temporary.
Mid-day Update… Get out the vote.
Another final final stage approaching as House vote nears.
Simply for having returned down to 2692.50, a test of 2688.00 was likely. That was regardless of peaking 1 tick short of touching this morning’s 2697.75 bias-up signal, which would have put into play a test of 2688.75.
2688.00 was the morning bias environment’s low. Exiting the bias environment back above 2692.50 would have indicated the pullback had ended. 
But a buy signal at 2691.25 was only touched and not triggered, as new lows into the noon hour tested 2685.50.
2685.25 is this afternoon’s bias-down signal. Testing it to within 1 tick or piercing it first isn’t as relevant as the morning’s similar attack on its bias-up signal. Afternoon bias setups don’t include the consequence of an offsetting test. But it still defines the bias environment’s extreme. And its reaction is testing and retesting 2690.00.
Back above 2691.25 would still signal momentum reversing up. Back under 2687.00 would make fresh lows likely, potentially to 2682.50, but likely to recover if probed during the no-bias environment. And recovering might need that — for the rubber band to be stretched down so it can snap back up — since bouncing out of the noon hour’s low hasn’t yet reversed the trend up.
Look ahead: Economic Calendar – for Wed Dec 20, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday’s thin calendar has no high-profile or influential reports, although the post-open Home Sales could be influential if it diverges from Tuesday’s Housing Starts data.
MBA Mortgage Applications
7:00 AM ET
Existing Home Sales
10:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2689.25 | 2692.50 |
| …would target | 2694.75 | 2697.75 |
| Bias-down: under | 2682.25 | 2685.25 |
| …would target | 2676.00 | 2679.25 |
| Signal status: NO-BIAS | 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.