Posts by Rod David
Market Wrap (recording & summary)
Thursday’s sellers had gained traction, suggesting that Friday morning would probe lower. But Friday morning gapped up and extended higher, triggering the 2346.75 bias-up and fulfilling its 2352.25 target. Nevertheless, not gapping up Friday above Thursday afternoon’s 2352.25 high had itself suggested a repeat of Thursday morning’s failed rally.
In fact, Friday morning’s bounce peaked at almost the same time and resolved down to fresh session lows, as did Thursday’s. Both drops gained traction, albeit differently. One difference is that Friday’s drop left “unfinished business above” at the afternoon’s 2345.50 bias-down signal. Probing under it prematurely was “no-bias trending” that required being retraced.
And it was retraced, after the drop had extended to within 3 ticks of the unfinished business below at 2331.00. Then another headline leveraged the position-squaring window, triggering another knee-jerk reaction up. Its 13-point surge probed 2345.50 by almost 2 points Unfinished business above AND below was neutralized within minutes of each other.
The balance of the session ranged choppily sideways. But it left an interesting pattern behind, projecting interesting action ahead. We’ll review it in detail at this weekend’s Saturday Review.
Details and other markets coverage are discussed in the post-market Wrap recording 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))
Overnight weakness touched the week’s “lower prior highs” down to 1.0805-1.0810, which is natural support capable of launching another upleg to 1.0900.
Gold Apr Contract (GC, ETF: (GLD))
A slightly deeper pullback overnight still stopped at least $3 short of the likely 1239.50 pullback limit before firming Friday. Regardless of the pullback, the upside attraction to at least one more higher close remains in-play.
Silver May Contract (SI, ETF: (SLV))
Friday extended to fresh relative highs testing 17.80, extending the break above 17.50 up toward its 17.90 target.
30-year Treasury Jun Contract (US, ETF: (TLT))
Attacking the 150-04 pullback limit reacted back up to Thursday’s 151-00 area high, keeping alive the potential for extending to 152-00.
Crude Oil May Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Thursday’s restrained optimism was appropriate for a bottoming pattern, but there’s no bullish reason for to further delay rallying if a bottom is valid.
Natural Gas Apr Contract (NG, ETF: (UNG, UNL))
Thursday’s reaction up from touching the 2.99 sell signal Thursday extended Friday to test what had been the 3.08 pullback limit. There is no bearish reason to delay an actual break lower if a top is forming.
Mid-day Update… Dueling headlines.
Knee-jerk reactions exploiting noon hour noise.
Piercing the 2352.50 bias-up target immediately reacted down to eventually test 2348.50. Anything lower would have qualified as a lower low, the first since the open, if not also since the overnight low. A buy signal above 2351.00 was soon tested.
None of which prevented a negative knee-jerk reaction to a headline, plunging more than 7 points to 2343.50. But a timely reversal before noon would have been more credible. Reacting to a headline is weak-handed. And originating during the noon hour is vulnerable to being only noise.
In fact, a surge attacked 2350.00 several minutes later. Its catalyst was also a headline, and it also originated during the noon hour. So, extending the bounce into a recovery isn’t assured. But triggering either bias is likely to extend. And triggering no-bias could still range choppily.
Look ahead: Economic Calendar – for Mon Mar 27, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Like last Monday, the new week is greeted by only a non-influential Fed survey, and Charlie Evans.
Dallas Fed Mfg Survey
10:30 AM ET
3-Month Bill Auction
11:30 AM ET
6-Month Bill Auction
11:30 AM ET
2-Yr Note Auction
1:00 PM ET
*Charles Evans Speaks
1:15 PM ET
Afternoon Bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2355.50 | 2351.75 |
| …would target | 2360.50 | 2357.00 |
| Bias-down: under | 2349.00 | 2345.50 |
| …would target | 2344.00 | 2340.25 |
| Signal status: LATE BIAS-DOWN | 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.