Posts by Rod David
Market Wrap (recording & summary)
Wednesday’s open was greeted unchanged from Tuesday’s 2385.00 close. Trending narrowly avoided triggering the 2388.00 bias-up signal. But the bias environment firmed above it anyway. And then surged to test the 2394.00 bias-up target. It was all retraced by a knee-jerk reaction to news. Until the afternoon bias-up signal triggered, and its target was met to within 3 ticks. That also reacted down on another headline.
Headlines trigger weak-handed sponsorship. Whether coinciding with resistance, or leveraging a fulfilled target, the reaction is artificial. By preventing an organic reversal, its reversal is only temporary. Which probably delayed truly punishing the morning’s doomed rally. Breaking lower through the position-squaring window finally probed under the morning’s lows, and into negative territory.
Thursday may yet extend the reversal down. Two consecutive closes above 2375.00 have put into play new highs, so the rally can rest on its laurels. Briefly. There is no shortage of catalysts — Thursday’s econ calendar is busy and high-profile, albeit not very influential after the pre-open Durable Goods. The quarterly earnings tap is still flowing.
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))
Gapping down Wednesday to Tuesday’s 1.0920 open prevented forming an Island. Dipping into Monday’s range was recovered back up toward Tuesday’s above 1.0960.
Gold Jun Contract (GC, ETF: (GLD))
Remaining under pressure through Wednesday remained in proximity to the pullback’s 1261.00 area target. That was tested in reaction to tax reform headlines, which reacted up back above 1266.00.
Silver May Contract (SI, ETF: (SLV))
Trending down throughout Wednesday to a fresh pullback low then blipped-down on tax reform headlines, before firming.
30-year Treasury Jun Contract (US, ETF: (TLT))
Choppy ranging Wednesday didn’t didn’t reverse momentum up, suggesting the 151-22 pullback objective remains in-play so long as 153-12 isn’t recovered.
Crude Oil Jun Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Wednesday’s reaction to EIA surged to a fresh recovery high at 50.20, which was consolidated into the close.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Gapping up Wednesday just under the 3.21 “higher prior lows” sell signal extended higher to 3.28. At least an eventual third lower close remains outstanding, so the one-day reversal isn’t greeting Thursday’s EIA report from a position of strength.
Look ahead: Economic Calendar – for Thu Apr 27, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: The calendar gets busy again on Thursday. Yet, other than the ECB statement and Draghi’s press conference, only the pre-open Durable Goods report has any reliable track record for influencing price action. The post-open housing sector report may trigger a reaction, but only to the extent that it disagrees with Tuesday’s three reports.
*ECB Policy statement
7:00 AM ET
*Durable Goods Orders
8:30 AM ET
International Trade in Goods
8:30 AM ET
Jobless Claims
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
Pending Home Sales Index
10:00 AM ET
EIA Natural Gas Report
10:30 AM ET
Kansas City Fed Manufacturing Index
11:00 AM ET
7-Yr Note Auction
1:00 PM ET
Farm Prices
3:00 PM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET
Mid-day Update… Dodging rocks and hard places.
Headline politely waits for target to be met.
Not triggering the 2388.00 bias-up signal didn’t prevent testing its 2394.00 bias-up target, piercing it by 3 ticks. Drifting down had barely managed to 
violate the pullback limit when a headline triggered a slide to 2386.25.
Being a knee-jerk reaction to news, the drop is now being recovered. So far, up to 2392.00, a 61.8% retracement back to the high. And the high does require a retest, having originated from overbought RSIs.
That attraction above is competing with the instability of this morning’s rally. Yesterday’s rally gained no traction and this morning’s open didn’t gap up. So, extending higher anyway tends only to stretch the rubber band for a reversal down.
Back under 2386.00-2387.00 would start to signal that reversal underway. Meanwhile, there remains potential to retest session highs.
Afternoon Bias
| WED afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2393.75 | 2390.00 |
| …would target | 2398.50 | 2395.00 |
| Bias-down: under | 2388.75 | 2385.25 |
| …would target | 2382.75 | 2379.50 |
| Signal status: BIAS-UP | 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.