Posts by Rod David
Market Wrap (recording & summary)
Monday’s 2576.75 opening tick was the session high. Its 4-point dip was recovered to touch the morning’s 2575.75 bias-up signal. Not recovering it put into play a test of 2567.25. Fresh lows during the afternoon bias environment fulfilled it, but that was after the morning’s bearish WedEX influence had lapsed. So, the afternoon’s sellers were different sponsorship. New sponsorship.
Meanwhile, that new sponsorship extended the afternoon’s decline. A simultaneous positive divergence in both 1-minute and 3-minute RSIs was ignored at 2569.00. More strong-handed sponsorship was observed when exiting the bias environment under the noon hour’s low, confirmed by fresh lows through the 3:10-3:20 proxy window. The decline extended to touch last Wednesday and Thursday’s “lower prior highs” at 2562.00.
Monday was an “outside day” which often reflects a near-term trend extreme, usually not extending the reversal immediately. “Unfinished business above” was left outstanding by a requirement for at least one more new trend high close, which the market can ignore during a correction. A slightly lower low under 2560.00 or down to 2556.00 could define the pullback. But Friday’s new high close has been rejected just enough to undermine the next higher objectives.
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))
Slipping further Sunday night retraced the balance of last week’s interim bounce from 1.1775. The next lower objective at 1.1760 remains in-play, as well as its likely break.
Gold Dec Contract (GC, ETF: (GLD))
The original 1277.50-1280.50 pullback target had been attacked as support Friday, and then probed entirely Sunday night into Monday morning’s attack on 1273.50. A Fed-related headline triggered a spike up into positive territory above 1280.50 to suggest sellers are trapped. Closing higher Tuesday — preferably above 1288.00 would reverse the trend up.
Silver Dec Contract (SI, ETF: (SLV))
Sunday night’s weakness initially held Friday’s 16.95 low, but Monday morning attacked 16.85. A Fed-related headline triggered a spike up into positive territory testing 17.11. Closing above 17.30 is still necessary to sealing a bottom, but closing Tuesday above Monday’s high would be credible for extending higher.
30-year Treasury Dec Contract (US, ETF: (TLT))
Narrow choppy ranging overnight firmed at one point Monday morning up to 152-20. Its recovery would be compelling for starting to reverse momentum up, but the actual buy signal remains 153-00, or else a deeper dip to 151-18 remains likely first.
Crude Oil Dec Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Greeting Monday flat with Friday’s close firmed through the open, but mostly gravitated back to or toward unchanged. Regardless, the constructive backing-and-filling should be done, leaving little or no reason not to resume the rally by Tuesday morning.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
Thursday’s premature bounce from a fresh low to back above the inflection point had extended higher Friday, and then gapped up Sunday night. Testing resistance at 3.00 requires the recovery to hold 2.95 as support, and closing back under it would likely retest 2.84.
Mid-day Update… Bias baggage.
Post-open decline is extending.
The morning’s bearish WedEX influence stepped in front of overnight new highs, a gap up, and a test of the 2575.75 bias-up signal. Downtrending through the open put into play an offsetting test of the morning’s 2567.25 bias-down signal. It was attacked only to within 3 points
at 2570.25, so it becomes “unfinished business below”
And that was within the context of a no-bias environment. This afternoon’s no-bias signal also has room down to its 2567.25 bias-down signal just as noise. The attraction helps. In fact, fresh lows just printed 2568.75.
Could this develop into a deeper, protracted decline? A durable top is unlikely — expirations don’t usually end a trend, and there’s still a requirement for one more new high close. But reversing two overnight rally attempts to close negative could keep selling pressure active through Wednesday’s open. Last week’s “lower prior highs” around 2562.00 could be tested.
First things, first. Trending down to 2567.25 remains intact so long as 2572.75 isn’t recovered. Coming to within 3 ticks at 2568.00 would lower the buy signal 1 point to 2571.75. This morning’s WedEX influence is moot, so potential for rallying into the close can’t be discounted.
Look ahead: Economic Calendar – for Tue Oct 24, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: The slow week for econ report continues Tuesday with only one potentially influential item, the post-open PMI Flash.
Redbook
8:55 AM ET
*PMI Composite Flash
9:45 AM ET
Richmond Fed Manufacturing Index
10:00 AM ET
4-Week Bill Auction
11:30 AM ET
2-Yr Note Auction
1:00 PM ET
Afternoon Bias
| MON afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2576.25 | 2574.00 |
| …would target | 2582.75 | 2580.50 |
| Bias-down: under | 2569.50 | 2567.25 |
| …would target | 2562.75 | 2561.50 |
| Signal status: NO-BIAS | FAQ | |
| INTRO VIDEOS #1 and #2 | ||
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.