Posts by Rod David
Market Wrap (recording & summary)
Closing flat Tuesday with the opening print seemed too little reward for having recovered from Monday night’s drop — regardless of the wide intraday range. That’s why Tuesday night’s drop to lower lows wasn’t surprising. Keep that in mind.
Tuesday night’s drop to 2780.50 was recovered enough for a post-open surge to 2792.50. None of which absolved the same weak-handed sponsorship that was likely to resolve down. And it did, collapsing to test the next lower objective at 2777.00 and retesting it by 2 points.
Everything under the morning’s 2784.25 bias-down target was a knee-jerk reaction to China trade headlines, an artificial catalyst likely to be retraced. Its timing was ultimately isolated to the bias environment, inhibiting another timing window from repeating the effort. The intraday recovery eventually reached 2796.25, back in positive territory and above the open’s initial high.
So, was that enough reward for having absorbed the open’s collapse? Not necessarily. The cash session close was still overlapping Tuesday’s 2791.50 open and close. Post-close action extended up to 2797.25, but that’s post-close action. Thursday’s open should already be in rally mode unless another downleg is underway.
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 Mar Contract (EC, ETF: (FXE, UUP))
Having just fulfilled its minimum third higher close to satisfy last week’s confirmed breakout, another session of backing-and-filling Wednesday would not necessarily undermine the rally. But the bullish pattern shouldn’t further delay fresh highs Thursday and preferably also into the weekend.
Gold Apr Contract (GC, ETF: (GLD))
The reaction down from meeting last week’s target extended even deeper Wednesday, filling a gap at 1323.00 and testing “lower prior highs” at 1318.50. A new buy signal can be calculated at 1326.50 that would target 1345.00-1347.00.
Silver Mar Contract (SI, ETF: (SLV))
Fresh lows at 15.65 now allow a close back above 15.80 to trigger a rally leg targeting 16.16. Another lower close to the current pullback would be difficult to launch a near-term recovery.
30-year Treasury Mar Contract (US, ETF: (TLT))
Tuesday’s probe back above the 146-12 buy signal had closed at its intraday upper-end, leaving no room for delay to extending higher for a bullish resolution. Reacting down instead Wednesday was vulnerable to rejecting the larger recovery attempt, and price extended down sharply to attack 145-18. Almost any lower close Thursday would shift the pattern to distributive and the trend to down.
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Tuesday’s post-close reaction to API had spiked up to touch the 56.15 buy signal. Already firming before Wednesday’s open, the morning’s reaction to its EIA report extended the recovery to fill the gap back up to Friday’s 57.25 high close, still having no reason to further delay resuming the rally to new highs.
Natural Gas Apr Contract (NG, ETF: (UNG, UNL))
Wednesday’s gap down dipped to 2.73 filled the gap back to Friday’s close and reversed back into positive territory at 2.80. Thursday’s EIA report is being greeted from a position of strength.
Mid-day Update… Getting interesting.
Recovery from significant support is almost fully rejected.
The post-open collapse down to 2777.00 held a retest down to 2775.00 while 1-minute RSI diverged positively. 
Their 2782.00 interim high was recovered as price action grinded back up to 2790.75 during the noon hour. Surging out of the noon hour reached 2795.00.
But this afternoon’s 2792.75 bias-up signal was being overlapped at both 1:20 and 1:30 to avoid triggering. This is a noN-bias environment. Not bias-up with a target in-play, and not no-bias resisted by its bias-up signal. There is no restriction against extending higher, and sellers are all but marginalized.
Another downleg could get underway, but it would be difficult. It can’t be overstated how meaningful it is to isolate the open’s test of significant support. And overbought RSIs at the 2795.00 high would inhibit reversing down.
Still, a recovery can’t be signaled until the close, and even another fresh session high would remain vulnerable to being rejected. But maintaining another fresh high through the bias environment lapsing would become extra-vulnerable to a bullish short-squeeze through the close.
Look ahead: Economic Calendar – for Thu Feb 28, 2019
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Thursday’s calendar is busy and varied, with multiple Fed speakers. Only the PMI report is reliably influential to price action, and that’s often seen when released privately to its institutional subscribers several minutes before being released publicly.
Richard Clarida Speaks
8:00 AM ET
GDP
8:30 AM ET
Jobless Claims
8:30 AM ET
*Raphael Bostic Speaks
8:50 AM ET
*Chicago PMI
9:45 AM ET
EIA Natural Gas Report
10:30 AM ET
Kansas City Fed Manufacturing Index
11:00 AM ET
*Patrick Harker Speaks
12:15 PM ET
*Rob Kaplan Speaks
1:00 PM ET
Farm Prices
3:00 PM ET
Afternoon Bias
| WED afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2792.75 | 2792.75 |
| …would target | 2799.50 | 2799.50 |
| Bias-down: under | 2782.75 | 2783.00 |
| …would target | 2777.50 | 2777.75 |
| Signal status: noN-BIAS, STILL TESTING BIAS-UP SIGNAL | . | |
| BIAS VIDEOS… INTRO // EXAMPLE | ||
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.