Posts by Rod David
Morning Bias
| MON morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2476.00 | 2473.50 |
| …would target | 2481.25 | 2478.75 |
| Bias-down: under | 2468.00 | 2465.50 |
| …would target | 2461.00 | 2458.50 |
| Signal status: NO-BIAS, TESTED BIAS-UP SIGNAL | FAQ | |
| INTRO VIDEOS #1 and #2 | ||
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)
Duplicating Thursday’s plunge on Friday would have confirmed the pattern I warned of in the morning’s Market Tour. That is a lopsided Head & Shoulders, its asymmetry due to the right side developing much faster than the left.
Simply extending Thursday’s drop through Friday’s close would have been bearish, as well. But for a different reason — another attempt at confirming a trend change, after Thursday’s attempt had been absorbed.
One day does not a pattern make, let alone an exception. Thursday’s sessions have learned that lesson, since neither of the two bearish patterns was confirmed on Friday.
Often, failed bearish behavior has a bullish consequence. Had Friday not been an inside day and first probed fresh lows, then much higher objectives would have become targeted. Instead, upside potential to 2484.00 and 2490.00 remains intact. None of which need develop immediately on Monday. Only gapping down sharply Monday could overcome that.
Meanwhile, Friday’s intraday rally reached an important target after the N. Korea missile missed its. that was 2470.50, whose recovery would have left no excuse to further delay extending to fresh highs. Instead, Friday’s close was similar to Thursday’s late test of “higher prior lows” that resulted in an overnight retracement. Gapping up sharply is needed to overcome another intraday pullback.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Join us for this weekend’s Saturday Review at 9:30am ET. We’ll review the bigger picture, and do instant chart analysis of your requests. The link will be emailed early in the morning.
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 Sep Contract (EC, ETF: (FXE, UUP))
Still testing above the 1.1735-1.1755 objective Friday, and retesting its room for noise up to 1.1810. Another negative close would confirm the topping pattern, with a close under 1.1650 launching the reversal down.
Gold Aug Contract (GC, ETF: (GLD))
Holding the 1257.00 pullback limit enabled the rally to exceed its 1259.70 target, which is the new pullback limit. Closing under it would reverse the trend down.
Silver Sep Contract (SI, ETF: (SLV))
Closing Thursday around the 16.60 pullback limit avoided its failure. But Friday’s strength stopped short of filling Thursday’s 16.78 gap up, which should still be tested before any durable downleg could begin.
30-year Treasury Sep Contract (US, ETF: (TLT))
Friday’s weaker open was reversed back up sharply in reaction to the morning’s econ reports. The 152-26 buy signal was triggered on the way to attacking the 153-16 inflection within 1 quarter-point. Also for having filled the gap back up to Wednesday’s 153-24 close, there is no bullish reason to further delay the recovery from extending.
Crude Oil Sep Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Still avoiding a reversal down allowed Friday to continue firming toward the next higher objective at 50.10. Any interim dip has room down to 47.25 without reversing the trend down.
Natural Gas Sep Contract (NG, ETF: (UNG, UNL))
Thursday’s restrained optimism above its 2.95 buy signal was constructive, but it can’t persist indefinitely without undermining the bullish pattern. So,m Friday morning’s ranging there .
Mid-day Update… Settling in, but not settling down.
No-bias afternoon underway.
This morning’s reaction down from 2469.00 had triggered the 2465.50 bias-down signal late, and then extended to 2462.00. That had firmed back up to 2465.00 when news broke that N. Korea had resumed its effort to destroy the Sea of Japan. That triggered a knee-jerk reaction down to touch the 2461.50 overnight low.
Which triggered a knee-jerk reaction back up to 2465.00 and through it. The noon hour was entered at 2468.00.
This morning’s 2458.50 bias-down target is unfinished business below. But there’s no timing to its eventual test. Especially with this being a Friday, now a Friday afternoon. This afternoon’s no-bias signal won’t be of much help, and the balance of the session may simply persist in negative territory.
Having said that, back above 2468.25 would being signaling another recovery attempt underway. Natural resistance lies above at yesterday’s 2473.00-2475.00 close. There is otherwise room down to 2458.50, but any lower when the bias environment lapses could slide sharply into the weekend.
Look ahead: Economic Calendar – for Mon Jul 31, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Monday’s post-open PMI is released privately to its institutional customers several minutes early. The market’s reaction tends to be duplicated when the number is released publicly.
*Chicago PMI
9:45 AM ET
Pending Home Sales Index
10:00 AM ET
Dallas Fed Mfg Survey
10:30 AM ET
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET
Farm Prices
3:00 PM ETFS