Posts by Rod David
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2656.00 | 2659.00 |
| …would target | 2662.75 | 2665.75 |
| Bias-down: under | 2648.50 | 2651.50 |
| …would target | 2642.00 | 2645.00 |
| Signal status: BIAS-UP, BIAS-UP TARGET EXCEEDED | 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)
Recently expanded volatility had suggested the market was beginning to argue more aggressively with itself. More obvious trending attempts would be made, but not necessarily would they succeed. 
Which is why Thursday’s “dry cleaners morning” was surprising.
The balance of the session compensated. Hardly waiting for the bias environment to come within view of lapsing, the otherwise narrow range started sliding from 2671.00 down to 2664.50. Its 61.8% retracement up to 2668.50 reversed down through the noon hour, triggered noN-bias, and extended down through the bias environment to 2654.75.
Oversold RSIs at the low didn’t prevent bouncing 7 points to attack 2662.00. That was only 2-4 points short of levels whose recovery through the close would have been a compelling hold-long. That’s one way to reverse up. But the last half-hour dropped to retest the low and neutralize its oversold RSIs. That’s another way to reverse up — if followed by recovering a relevant resistance.
And that’s the missing ingredient to a rally — a buy signal. “Unfinished business above” at 2677.75 is already outstanding. That’s *only* 20 points above, with a bearish WedEX afternoon impending. The most credible catalyst would be a reversal of the news that supposedly triggered Thursday’s drop. Not yet recovering through the morning would be difficult to recover before Monday afternoon.
- 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 Dec Contract (EC, ETF: (FXE, UUP))
Wednesday’s correct bounce and Thursday’s knee-jerk reaction up to 1.1845‘s original sell signal reacted down sharply during Draghi’s press conference. The reaction collapsed to probe under 1.1790, whose break would resume the larger decline.
Gold Feb Contract (GC, ETF: (GLD))
Wednesday’s post-close surge in reaction to FOMC had required Thursday’s pullbacks to hold 1255.00 to maintain the upside momentum, or at least 1251.00 to avoid invalidating the surge’s recovery attempt — the latter can still be rejected since it was only being tested and not yet recovered before FOMC.
Silver Mar Contract (SI, ETF: (SLV))
Surging after Wednesday’s FOMC news required pullbacks to hold 16.05 as support to maintain the upside momentum, or at least 15.85 to avoid invalidating the surge’s recovery attempt — the latter can still be rejected since it was only being tested and not yet recovered before FOMC.
30-year Treasury Dec Contract (US, ETF: (TLT))
Still overlapping the 152-18/153-10 range’s upper-end after Wednesday’s FOMC reaction wasn’t decisive enough to avoid more backing-and-filling overnight. But Thursday morning firmed further to probe above Wednesday’s highs, whose recovery through the close would confirm a new rally leg underway.
Crude Oil Jan Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Thursday’s open gapped down from Wednesday’s close under the 56.80 sell signal, but immediately bounced to test 56.80 as resistance. The 55.50 target remains intact.
Natural Gas Jan Contract (NG, ETF: (UNG, UNL))
Already probing fresh lows overnight didn’t help the pattern that was greeting Thursday’s EIA report from a position of weakness. The reaction wasn’t dramatic as the two-day range persisted, offering potential to form a bottom.
Mid-day Update… There it is.
Bias environment lapses, volatility expands.
The “dry cleaners morning” held 2671.00 resistance through the open and well into the bias environment. Already reacting down before the bias environment came within view of lapsing, the open’s 2667.50 low was probed several minutes prematurely. It extended down anyway to touch the morning’s 2664.50 bias-down signal.
A bounce retested the premature portion of the break up to 2668.50, and then another slide began at noon. Extending down into the afternoon bias environment has tested and retested 2661.25. But the 2663.50 bias-down signal didn’t trigger, either way. This is a noN-bias environment.
Not a bias-down targeting 2657.50, although that’s the next likely objective if the drop extends. And not a no-bias likely to define this window’s low by the 2663.50 bias-down signal, although that’s how many noN-bias environments behave.
The latter happens often, and occasionally resolves in sort of a delayed bias-down. So, just hovering at or around 2663.50 until the bias environment starts lapsing — which has been the case so far this afternoon — could exit the bias environment as if the bias signal were triggering. So, fresh lows testing 2657.50 can’t be dismissed.
Recovering 2664.50 would start to signal momentum reversing up. Don’t forget that while this environment remains likely to try trending either way, it’s not yet any likelier to succeed either way. And there’s still unfinished business above at 2677.75.
Look ahead: Economic Calendar – for Fri Dec 15, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Friday’s expiration includes index futures, and is referred to as Quadruple Witching. But the volatility that used to be associated with it usually doesn’t appear any longer. That said, moves can be abbreviated, as trending is more difficult to start.
Empire State Mfg Survey
8:30 AM ET
Industrial Production
9:15 AM ET
Atlanta Fed Business Inflation Expectations
10:00 AM ET
Baker-Hughes Rig Count
1:00 PM ET
Treasury International Capital
4:00 PM ET