Posts by Rod David
Market Wrap (recording & summary)
Tuesday morning offered the rare reminder that bias environments are context. Bias signals are not necessarily directional. At least, not necessarily the initial direction.
Holding a test of the 2643.00 bias-up signal put into play an offsetting test of its 2635.50 bias-down signal. The window’s price action would normally develop between the signals. 
Not Tuesday. The no-bias environment probed above its bias-up signal to test its 2648.25 bias-up target that wasn’t even in-play.
Recovering the bias-up signal through 10:30 could have invalidated the 10:15 signal. Absent that, the bias-up target could have served as proxy for the signal, and recovering the target through 11:30 could have invalidated the 10:15 signal. Absent both, the offsetting test of the 2636.50 bias-down signal became “unfinished business below.”
Already trading back down into the noon hour was helpful confirmation that the morning’s rally was “no-bias trending.” Even extending higher, first, would have been in the context of being doomed to failure. Sellers were refueled by letting buyers fulfill their target. Weak-handed buyers, as indicated by how late they finally took control.
All of which delayed the expected eventual test of 2631.75. Still testing it (to within 3 ticks, within 3 minutes) at the cash session close neither holds it nor rejects it. An earlier test would have had more time to resolve the test more clearly. That’s probably not a bug, it’s a feature — the market didn’t do anything it didn’t collectively want to do.
If the market wanted to trend Wednesday, then it would have resolved the 2631.75 test decisively on Tuesday. Or else, Wednesday’s open will immediately exceed a proxy level. Absent nothing so substantial so immediately, Wednesday’s session is vulnerable to trending aggressively in one direction, and then reversing, both intraday.
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))
Probing under 1.1860 support Tuesday extended down through the noon hour. A second consecutive lower close on Wednesday would confirm the break.
Gold Feb Contract (GC, ETF: (GLD))
Monday night’s narrow range broke lower into Tuesday’s open and trended down sharply through the morning to attack 1263.00. The decline’s momentum remains intact until recovering 1285.00.
Silver Mar Contract (SI, ETF: (SLV))
Narrow ranging overnight gapped down slightly into Tuesday’s open, and broke lower through the morning to test 16.05. Back above 1640 would signal momentum reversing up. Meanwhile, 15.75 is in-play.
30-year Treasury Mar Contract (US, ETF: (TLT))
Monday’s inability to rally off of 153-00 and simultaneous ability to hold it as support, greeted Tuesday after overnight weakness under it. The open held 152-18 as support and rallied well into postive territory testing 153-20. This pattern is likely to follow-through the following session.
Crude Oil Jan Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Monday’s dip back down to the 57.40 buy signal probed slightly lower overnight, but Tuesday had little excuse to delay recovering from the pullback to keep alive higher targets.
Natural Gas Jan Contract (NG, ETF: (UNG, UNL))
Already gapping down at Tuesday’s open extended lower to fulfill the 2.87 target. There is no active buy signal, but the timing is appropriate to bounce so that Thursday’s EIA report can be met from a position of strength.
Mid-day Update… Quicksand.
Rallies and bounces failing slowly.
This morning’s 2643.00 bias-up signal was touched once before triggering no-bias. That put into play an offsetting test of its 2636.50 bias-down signal. 
The bias-up signal wasn’t touched in time to invoke the grace period. And it wasn’t recovered through 10:30 to invalidate its 10:15 signal. It was a no-bias environment.
That didn’t prevent no-bias trending above the bias-up signal. It extended to its 2648.25 bias-up target. Any higher as the bias environment started lapsing at 11:30 would have done what wasn’t done an hour earlier. But its resistance held, so no-bias remained intact, and a test of 2636.50 became “unfinished business below.”
No-bias trending must retrace to its broken bias signal, and often also retraces its 10:15 print. That was 2640.75, and it has been probed down to 2638.25. That was also this afternoon’s bias-down signal, which was still being tested at both 1:20 and 1:30 to trigger noN-bias
So, 2636.50 remains in-play. The noon hour’s exit touched this morning’s 2638.25 lows, and bounced. That’s now obligatory support, likely to break lower, and still likely to also test 2631.75 as support.
Look ahead: Economic Calendar – for Wed Dec 6, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday offers a glimpse of sentiment coming into Friday’s Employment Situation report. Meanwhile, any noticeable reaction to the pre-open ADP report would likely be duplicated to the post-open reports.
Bank of Canada policy statement
MBA Mortgage Applications
7:00 AM ET
*ADP Employment Report
8:15 AM ET
Productivity and Costs
8:30 AM ET
EIA Petroleum Status Report
10:30 AM ET
Treasury STRIPS
3:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2649.75 | 2649.50 |
| …would target | 2655.25 | 2655.25 |
| Bias-down: under | 2640.75 | 2640.75 |
| …would target | 2634.75 | 2634.50 |
| Signal status: noN-BIAS, TESTED BIAS-DOWN SIGNAL | 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.