Posts by Rod David
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2417.50 | 2416.50 |
| …would target | 2422.50 | 2421.50 |
| Bias-down: under | 2409.00 | 2408.00 |
| …would target | 2402.50 | 2401.50 |
| 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)
Firming into Wednesday afternoon’s bias environment already had started suggesting sellers were done. Not only for probing higher, but also for the probe’s timing. The 2404.25 bias-down signal was hardly attacked, and tested only after being too late to trigger. More so, that was in reaction to new from the Beige Book release.
Rallying through the position-squaring window recovered to unchanged. Overlapping unchanged around 2411.00 into the cash session close was then probed through the futures close up to 1 point above last Thursday and Friday’s 2413.75 closes. It’s not very different from Tuesday’s drop being recovered to unchanged, and probing it only when it didn’t matter.
Wednesday’s recovery was probably inhibited by not having dipped deeply enough. The 2402.75 low stopped at least 1 tick optimistically short of actually filling the week-old cash session gap, and at least 1 points short of the futures close. Potential to “lower prior highs” at 2399.00 remains alive. Extending higher Thursday requires the same setup, gapping up above prior highs — now 2415.00-2417.00.
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 Jun Contract (EC, ETF: (FXE, UUP))
Rallying overnight and firming post-open tested the 1.1255 bounce limit Wednesday, which must hold to maintain potential for another downleg to the next lower corrective target at 1.10995. Above 1.1285 would start signaling another upleg underway.
Gold Aug Contract (GC, ETF: (GLD))
Gapping up Wednesday instead of extending Tuesday’s gap down all but ensured retesting Friday’s high up to 1277.00-1278.25 before the Ascending Triangle pattern can collapse. Extending higher intraday attacked the bounce target’s lower-end.
Silver Jul Contract (SI, ETF: (SLV))
Tuesday’s out-performance was offset by greeting Wednesday baking-and-filling. Ultimately, the session closed flat, not confirming the rally is intact.
30-year Treasury Sep Contract (US, ETF: (TLT))
[Rolling coverage forward to Sep which trades at a 1-11 discount to Jun] With still no bullish excuse to delay extending the rally effort, Tuesday night’s backing-and-filling was recovered ahead of Wednesday’s open and extended to fresh highs through the morning, still targeting 154-02.
Crude Oil Jul Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Touching both ends of the 49.25 and 49.85 range Tuesday had failed to trigger trending either way. Wednesday’s pre-open slide resolved the delay by gapping down and trending lower through the morning to test 47.75. A second consecutive lower close on Thursday would confirm at least an eventual third lower close outstanding.
Natural Gas Jul Contract (NG, ETF: (UNG, UNL))
Tuesday’s break under 3.30 extended down sharply Wednesday to 3.06, compensating for the delay in finally fulfilling the longstanding objective. Regardless of its degree, the second consecutive lower close from a multi-session range confirms the breakout, and now requires at least one more eventual lower close.
Mid-day Update… Don’t get too comfortable.
Range-bound ahead of the 2:00 Beige Book release.
The first half-hour’s 12-point dive to fresh relative lows at 2402.75 has since consolidated. The 2410.50 minimum likely bounce target was attacked to within 1 tick. The narrowing range has formed a Symmetrical Triangle centered just under 2408.50.
This is a no-bias environment. Trending under its 2404.25 bias-down signal is unlikely, and would be called “no-bias trending” that requires being retraced. So, back under 2405.75 would could still test “lower prior highs” at 2399.00, while being likely to recover.
Breaking lower after the bias environment starts lapsing would still be capable of recovering from 2399.00. But it’s recovery wouldn’t be required, which makes it less likely. Fresh lows can be avoided altogether by rallying out of the bias environment above 2410.50.
Look ahead: Economic Calendar – for Thu June 1, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: The holiday-shortened week has both Challenger and ADP reporting the same day, along with Jobless Claims. And that’s only the first two reports. Divergences among them, or confirming an outlier, would likely shake things up. And any reaction to a pre-open report would likely be duplicated by a post-open report.
John Williams Speaks
Wed 7:30 PM ET
Challenger Job-Cut Report
7:30 AM ET
*ADP Employment Report
8:15 AM ET
Jobless Claims
8:30 AM ET
Productivity and Costs
8:30 AM ET
Gallup Good Jobs Rate
8:30 AM ET
*PMI Manufacturing Index
9:45 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
*ISM Mfg Index
10:00 AM ET
Construction Spending
10:00 AM ET
EIA Natural Gas Report
10:30 AM ET
EIA Petroleum Status Report
11:00 AM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET