Posts by Rod David
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2345.50 | 2341.75 |
| …would target | 2351.00 | 2347.25 |
| Bias-down: under | 2337.25 | 2333.50 |
| …would target | 2331.50 | 2327.75 |
| Signal status: BIAS-UP, BIAS-UP TARGET MET | 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)
Tuesday morning’s first reaction down was normal. The gap back up to Monday’s 2345.00 close was the opening surge’s objective, and it had just been filled to within 2-3 ticks. The reaction down was excessive, all the way back to the morning’s 2337.75 bias-down signal that already had held a test to avoid triggering. It held again. Its offsetting test of 2347.25 was in-play.
Tuesday morning’s second reaction down wasn’t abnormal. It originated precisely as the bias environment began lapsing at 2341.00. And it extended precisely into noon. It was also excessive, and that made it unusual. But still not abnormal, ending almost the same minute as testing the morning’s 2332.50 bias-down target (albeit by 2 points).
Trending back up through the noon hour and afternoon bias environment recovered to test 2341.00. Actually recovering 2341.00 into the final hour or proxy window would have been bullish. More bullish than not bothering to test 2341.00 — twice — without even closing above it. Then the unusual, not abnormal, intraday decline could have been dismissed. Unfinished business above could have been addressed.
But the afternoon’s recovery was a little slow, especially in not recovering 2337.75 earlier, and in holding a test of 2341.00 later. That means keeping the door open to another downleg, which wouldn’t be so unusual at this stage. And that also means tolerating little or no delay before extending the recovery Wednesday, and preferably extending it relentlessly.
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))
Friday morning’s spike up was already attacked Monday, but Tuesday’s open gapped above it to the 1.0725 bounce limit, and extended through it to test 1.0760. The 1.0550 target below is moot unless reinstated by gapping down Wednesday back under 1.0725.
Gold Jun Contract (GC, ETF: (GLD))
Tuesday morning’s gap down initially extended to 1280.50, before reversing to rally sharply up to the 1294.00 target that had been tested already Sunday night and Monday morning. Its confirmed breakout would target 1311.00, and pullbacks must now hold 1290.70 as support.
Silver May Contract (SI, ETF: (SLV))
Gapping down to and through 18.30 Tuesday morning slid sharply before recovering into the close to at least attack 18.30. There is no bullish excuse to further delay its actual recovery, which should extend to fresh highs well above 18.55 resistance.
30-year Treasury Jun Contract (US, ETF: (TLT))
Monday’s retest of the 153-11 pullback limit had held, and was recovered entirely to Monday’s ~154-00 highs at Tuesday’s gap up, which extended sharply higher intraday to 155-04.
Crude Oil May Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Fresh pullback lows under the 52.70 sell signal were recovered temporarily Tuesday morning, but then returned to session lows, targeting 50.65.
Natural Gas May Contract (NG, ETF: (UNG, UNL))
Further weakness Monday night tested the 3.13 sell signal, which was retested again later Tuesday morning. Its break would be credible for extending down, and would invalidate any potential for a bigger corrective bounce to 3.27.
Mid-day Update… Dragged down, and up.
Bias exit’s drop neither extended nor recovered.
This morning’s 2337.75 bias-down signal held its test easily through 10:15. That put into play an offsetting test of the 2347.25 bias-up target — essentially last night’s high. Meanwhile, the gap back to yesterday’s 2345.00 close had been filled to within 2-3 ticks. Its natural resistance had already triggered a reaction down.
The reaction down extended. The 2337.75 bias-down signal was tested as support into 10:30 to avoid invalidating the 10:15 bias signal. The last opportunity to invalidate the morning’s bias signal would be to enter the noon hour under its bias-down target. Plunging out of the morning’s bias environment exit tried to do exactly that.
The plunge attacked 2330.00 at noon, but was still overlapping the 2332.50 bias-down target. Still not enough to invalidate the morning’s bias. Another higher offset is now outstanding at 2347.25.
Regardless of the new “unfinished business above,” exiting the noon hour back above 2337.75 would have reversed momentum up. That didn’t happen. It’s being touched only now, along with the resistance of this afternoon’s 2337.00 bias-up signal.
Probing 2337.00-2337.75 during the next half-hour would be “no-bias trending” and doomed to failure. Delaying its probe until the bias environment would still be credible for extending higher into the close — preferably also recovering the morning’s 2341.00 last relative high into the final hour.
Otherwise, exiting the bias environment in decline would resume the earlier slide, and extend it down sharply to 2321.00 and lower.
Look ahead: Economic Calendar – for Wed Apr 19, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Reaction to Wednesday’s noon hour speaker might be reliable for foreshadowing the afternoon reaction to the Beige Book release.
MBA Mortgage Applications
7:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
*Eric Rosengren Speaks
12:30 PM ET
*Beige Book
2:00 PM ET