Posts by Rod David
Market Wrap (recording & summary)
Was there a shortage of catalysts Tuesday for trending? Not early in the morning. Gapping up held a test of 2388.00, and plunged 7 points to test 2382.00. Was there no shortage of catalysts for being range bound? The balance of the session fluctuated in a 5-1/2 point range between the two early extremes.
We discussed this possibility during this weekend’s Saturday Review. Enough exchanges are closed globally to constrain liquidity, which inhibits trending. Quarterly earnings coming from AAPL didn’t prevent and afternoon slide, but probably inhibited it from breaking the morning’s lows.
Bouncing into the close stopped short of touching the noon hour’s high. That high had stopped short of touching the open’s high. And the afternoon’s interim dip had stopped short of touching the morning’s low. The resulting pattern is a Symmetrical Triangle, which depicts equally-matched opponents, and the potential for a false break before reversing more substantially in the opposite direction.
Gapping up high enough could break free from that attraction. Meanwhile, closing again under 2388.00 has kept the door open to at least probing fresh lows.
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))
Tuesday’s narrow inside day still hasn’t fulfilled a likely probe of fresh highs, and it’s already too late to reject at least a fresh high except to correct the rally.
Gold Jun Contract (GC, ETF: (GLD))
Initially trying to extend this week’s drop probed a couple of dollars under Monday’s low to attack 1252.50. Closing above 1259.00 would signal the drop had ended, but under 1251.50 could extend it considerably.
Silver Jul Contract (SI, ETF: (SLV))
Firming ahead of Tuesday’s open touched the 17.02 resistance before dipping to momentarily pierce under Monday’s low down to 16.80. The break did not trigger a collapse, leaving open the potential for recovering sharply in the Up/Down-crash setup.
30-year Treasury Jun Contract (US, ETF: (TLT))
Tuesday extended the bounce to a full point off of Monday’s low taht fulfilled the ~151-21 target. A second consecutive higher close Wednesday above the 152-08 bounce limit would confirm the trend had reversed up, at which point pullbacks must hold 152-14.
Crude Oil Jun Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
The bottoming potential may be done as Tuesday dipped back to Thursday’s low, which at least Monday’s dip had managed to avoid. And momentum never reversed up by closing above 49.30 or 50.00, although that would still get a benefit of the doubt for extending higher.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Initially bouncing Tuesday up to 3.27 was reversed back under Monday’s low to 3.19, and back under the 3.21 sell signal whose prior confirmation already requires at least one close under 3.11.
Mid-day Update… Trending still trapped.
Recovering the open’s dip held resistance.
This morning’s 7-point plunge down to 2381.75 had consolidated into the bias environment lapsing. Rallying through the noon hour touched 2388.00, and held.
Testing 2388.00 wasn’t rejected — its 2-point reaction down hasn’t even probed its pullback limit by 3 ticks. But this afternoon’s 2386.50 bias-up signal didn’t trigger. And it could have. Not only did bias-up not trigger, but neither did no-bias. This is a noN-bias environment.
noN-bias means the bias-up signal isn’t required to define the window’s upper-end, although it often does. Nevertheless, a fresh high above 2388.00 would be credible for resuming the noon hour’s rally. This morning’s 2391.00 bias objective did become “unfinished business above.”
Meanwhile, back under 2385.00 would be credible for resuming the morning’s drop. Not only to its 2382.50 bias-down signal, but through yesterday’s ~2381.00 lows to 2377.25.
Look ahead: Economic Calendar – for Wed May 3, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: This week is is rare for containing both an FOMC policy statement on Wednesday, and payrolls on Friday. The pre-open ADP report offers me an opportunity to gauge the market’s sentiment toward Friday’s report. And the reaction to a pre-open report is often duplicated in reaction to post-open reports — of which two are high-profile, if not also influential to price action. High-profile post-close earnings include FB.
MBA Mortgage Applications
7:00 AM ET
*ADP Employment Report
8:15 AM ET
Gallup U.S. Job Creation Index
8:30 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
*FOMC Meeting Announcement
2:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2390.50 | 2386.50 |
| …would target | 2395.75 | 2391.75 |
| Bias-down: under | 2386.50 | 2382.50 |
| …would target | 2381.25 | 2377.25 |
| 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.