Posts by Rod David
Market Wrap (recording & summary)
Monday night’s relentless optimism was relatively shallow. But it would have been labeled as excessive optimism had Tuesday’s open reversed back under the overnight low. It didn’t. The open didn’t do much but fluctuate around the morning’s 2527.50 bias-up signal. Triggering no-bias was almost accidental, considering the narrow aimless ranging.
But an offsetting test of the morning’s 2520.25 bias-down signal was put into play. And it wasn’t invalidated, so it became “unfinished business below.”
Those “unfinished business belows” are adding up, not unlike a monthly bar tab that suddenly comes due. Under 2520.25 is Monday morning’s no-bias trending retracement from 2509.50. And potentially lower.
Meanwhile, Tuesday’s rally held a test of the morning’s 2532.00 bias-up target. It was never put into play, but as long as it’s being tested, it should define the detour before fulfilling the 2520.25 bias objective. Having trended up into Tuesday’s close, gapping down Wednesday under Tuesday afternoon’s 2528.50 low could form a “session-long decline.” The trend otherwise remains up, next targeting 2541.50.
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))
Fresh lows overnight probed under 1.1760 which last week’s lows had stopped optimistically short of touching. Already bouncing Tuesday morning reflects a different version of that same optimism, which continues to be bearish from a contrarian perspective, so long as 1.1825-1.1845 holds as resistance.
Gold Dec Contract (GC, ETF: (GLD))
Gapping up Tuesday to form an Island Reversal was the only immediate recovery pattern, and it wasn’t even threatened before probing slightly lower intraday.
Silver Dec Contract (SI, ETF: (SLV))
Monday’s attack on the 16.50 target didn’t extend down Tuesday, as the session ranged choppily sideways at its lows.
30-year Treasury Dec Contract (US, ETF: (TLT))
Fresh lows overnight tested 152-00, the next step to fulfilling the required eventual third lower close of last week’s confirmed breakout. Producing it from a close back above 153-14 would have been bullish, but we’ll still monitor for a bottom forming.
Crude Oil Nov Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Monday’s tumble down to “lower prior highs” didn’t extend lower overnight. But closing above 51.75 is still needed to reverse the trend back up.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
Did Tuesday avoid a second consecutive lower close, which would have confirmed Monday’s breakout? Developing mostly within Monday’s range mitigates whether the close was actually lower, so almost any initial strength Wednesday would be credible for extending higher.
Mid-day Update… Stable and flat.
Narrow range persists.
Germany and China are both closed today. They’re also both asleep now. Or close to it. But this morning’s narrow ranging persists. The lack of volatility hasn’t attracted new sponsorship, so the market continues hovering at or under the 2529.50 overnight high.
The overnight high is a “new Globex trend extreme” that required intraday retest. Now the attraction above is neutralized. RSIs aren’t overbought, so there’s no other “unfinished business above.” Dropping from this pattern tends to begin suddenly.
Retracing ground is a lot easier than forging through untouched territory. Breaking higher would still be credible for extending since counter-trend sponsorship is no easier to attract. But the greater vulnerability is back down — this morning’s 2520.25 is “unfinished business below,” as is Monday morning’s 2509.50.
Look ahead: Economic Calendar – for Wed Oct 4, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: It’s payrolls week, which brings Wednesday’s high-profile ADP report. Not only is it reliable for triggering a price reaction, but it also allows us to gauge the sentiment ahead of Friday’s payrolls report. Meanwhile, Fed speakers start appearing this week like cockroaches. It started with one or two, but Wednesday and beyond they start crawling out of the woodwork in droves.
MBA Mortgage Applications
7:00 AM ET
*ADP Employment Report
8:15 AM ET
PMI Services Index
9:45 AM ET
ISM Non-Mfg Index
10:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
*James Bullard Speaks
3:00 PM ET
*Janet Yellen Speaks
3:15 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2531.75 | 2529.00 |
| …would target | 2537.25 | 2534.50 |
| Bias-down: under | 2528.00 | 2525.25 |
| …would target | 2523.00 | 2520.25 |
| Signal status: noN-BIAS, TESTED BIAS-UP SIGNAL | 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.