Posts by Rod David
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2801.50 | 2802.00 |
| …would target | 2808.00 | 2808.50 |
| Bias-down: under | 2791.00 | 2791.50 |
| …would target | 2785.25 | 2785.75 |
| Signal status: NO-BIAS, TESTED BIAS-DOWN SIGNAL | . | |
| BIAS VIDEOS… INTRO // EXAMPLE | ||
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)
Globex gapped up to 2799.50 had extended only momentarily to 2803.50. Its retracement down to to 2794.50 was necessary to find sponsorship capable of trending to fresh highs. Monday’s 2808.00 open was no more eager to extend than was Sunday night’s gap up. It eventually probed higher to test its 2813.50 target, but the bias environment lapsed back under the open’s range. And that put into play a deeper pullback, still.
In fact, the highs reversal extended through the close to within 2 ticks of the 2794.50 Globex low. It already seemed disappointing to have retraced Sunday night’s open, despite having recovered Globex’s gap up and extended it higher both pre-open and post-open. Falling through the close isn’t surprising, but ONLY falling through the close would be.
Extending down overnight is necessary to reinstate the Isolation setup. It had required closing Monday back under 2790.75, but exiting Tuesday’s open under 2788.00 would suggest the interim rally was rejected. Otherwise, a new reversal setup would be needed. Meanwhile, Monday’s open gapped up above all prior highs, and would want to be retested from below to neutralize its attraction above.
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))
Still no bullish reason to extend the correction any deeper, but also no need to further delay resuming last week’s confirmed breakout to fresh recovery highs.
Gold Apr Contract (GC, ETF: (GLD))
Narrow flat-to-lower ranging at or around the buy signal left it outstanding, but intact, and still likely to be triggered.
Silver Mar Contract (SI, ETF: (SLV))
Monday morning’s test of the buy signal held and was retraced into the afternoon to end negative, but not reversed down as the buy signal remains intact.
30-year Treasury Mar Contract (US, ETF: (TLT))
Friday’s gap up that had rejected Thursday’s gap down was able only to probe its 146-16 buy signal but not trigger it. Monday’s gap down doesn’t invalidate the buy signal or trigger a sell signal, and it could be only a defensive pullback ahead of Tuesday’s first of the Fed Chair’s two-day Congressional testimony. His opening remarks remain embargoed until 9:45 am ET.
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Friday’s gap up to prior highs had not closed higher, leaving the pattern vulnerable to a deeper pullback testing 55.85-56.05. Opening there Monday probed lower intraday to attack 55.00, needing to recover 55.10 without delay to resume the rally.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Closing above the 2.70 buy signal Friday extended higher immediately by gapping up Sunday and Monday. Extending higher intraday to 2.82 barely qualifies as a confirmed breakout, with room for a healthy pullback down to 2.74.
Mid-day Update… Turnabout is fair trade.
Something big may be happening here… PLUS INSTRUCTIONAL VIDEO.
The likely objective to resuming last night’s rally was 2813.50. It was tested and retested at the morning bias environment’s high, very soon after triggering its 2808.75 buy signal.
The window lapsed back under the open’s high.
The elements of this setup all but require a fresh post-open low. That’s the structural reward, just for isolating the bias environment’s probe above the open’s high. The calculable reward derives from the interim swing, and measures out to 2802.00. Neither objective is required, especially if another timing window were to probe fresh highs.
BONUS: Watch this 4-minute video description of the Risk:Reward assumptions that suggested selling into the 2806.75 bounce limit test on the way down.
But the reversal did extend down, until testing its likely 2802.00 target. Oversold RSIs there don’t require a retest because they printed during the noon hour. The low bounced 1 tick short of the 2801.25 bias-down target, but not high enough to avoid triggering the 2806.25 bias-down signal. Having met its target to within 3 ticks, it won’t become unfinished business if left unmet. But it’s meanwhile an attraction.
More so, the morning high’s rejection may yet evolve into a reversal of the overnight rally. Back under 2801.00 would start to signal another downleg underway probably targeting 2791.00. Otherwise, recovering 2809.00-2810.00 through a relevant window would suggest another upleg underway
Look ahead: Economic Calendar – for Tue Feb 26, 2019
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Three housing sector reports in the same morning offer opportunities for surprising differentials between them, or for validating surprises. The Fed Chair’s semi-annual Congressional testimony begins with the Senate. His opening remarks are customarily embargoed until the hearing begins, and then volatility reigns for awhile as the Q&A progresses.
Housing Starts
8:30 AM ET
Redbook
8:55 AM ET
S&P Corelogic Case-Shiller HPI
9:00 AM ET
FHFA House Price Index
9:00 AM ET
*Consumer Confidence
10:00 AM ET
*Jerome Powell Senate testimony, day-one
10:00 AM ET
Richmond Fed Manufacturing Index
10:00 AM ET
7-Yr Note Auction
1:00 PM ET