Posts by Rod David
Market Wrap (recording & summary)
Tuesday’s open gapped down from Friday’s 2776.00-2777.00 close, but only to test its 2766.50 last relative low.
Immediately reacting up filled the gap back to Friday’s close. The bias environment exit converted the morning’s recovery into a new rally leg that fulfilled its 2784.00 objective at noon. Higher highs into the final hour at 2787.50 gained no traction, and the balance of the session dipped back down to unchanged through the futures close.
The cash session close and 3 minutes prior were both testing 2779.00-2780.00. That’s not deep enough soon enough to be confident that Tuesday failed to produce a second consecutive higher close. And that keeps alive Friday’s close above 2751.00/2757.00 to invalidate the two-month old rally still being only a temporary correction.
Just closing above 2751.00/2757.00 would have sufficed, had Tuesday not also probed fresh highs. That raised the burden of proof for a confirmation to close positive. Which wasn’t the most credible. So, gapping down or exiting a timing window back under Tuesday morning’s 2766.00 low would invalidate the confirmation. Otherwise, the rally’s next objective would be new highs — albeit not at all protected from beginning a corrective pullback.
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))
Repeated failed efforts to trend under 1.1333 finally faced the consequence of breaking higher, and extending intraday to test the 1.1375 buy signal that was avoided last week. A second consecutive higher close Wednesday would confirm the trend had reversed up.
Gold Apr Contract (GC, ETF: (GLD))
[Rolling coverage forward to Apr which trades at a 40-cent premium to Feb]… Rallying out of the weekend had already fulfilled the 3-week old 1328.30 gap up and also its likely 1333.00 objective before Tuesday’s open. The morning extended higher to 1345.00, qualifying as a breakout that could be confirmed by a second consecutive higher close Wednesday. Otherwise, a pullback to 1328.50-1333.00 would maintain upside momentum.
Silver Mar Contract (SI, ETF: (SLV))
Already probing above Friday’s 15.70 buy signal’s test overnight, Tuesday’s open extended through 15.82 resistance to confirm the 3-week old gap up at 16.16 is in-play, already attacking 16.00 intraday.
30-year Treasury Mar Contract (US, ETF: (TLT))
Still testing 146-16 through Friday’s close gave no hint how it would resolve through Sunday night or Monday, not until Tuesday’s next regular open when price surged back to prior highs at 147-05. The massive Ascending Triangle pattern has no bullish excuse not to resolve up much sooner rather than later. Closing back under 146-00 would instead resolve down substantially.
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Fresh highs coming out of the holiday weekend may be resolving the massive inverted Head & Shoulders pattern, subject to a second consecutive higher close on Wednesday for confirmation. Which would greet this week’s one-day delayed EIA report on Thursday from a position of strength.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Flat-to-higher ranging ahead of Tuesday’s open still needs to close above 2.70 to reverse momentum back up. Closing above 2.70 by Wednesday would greet Thursday’s EIA report from a position of strength.
Mid-day Update… Postured to confirm. But, tick-tock.
Rejecting fresh highs wouldn’t be bullish.
This moring’s bias-down signal was tested and held through the open, but its offsetting test of the bias-up signal was held through the bias timing window’s grace period. 
This setup usually produces an offsetting test of the bias-down signal, despite it having been tested first. But not this morning.
Perhaps that’s because the setup I just described was triggered by the 1 tick. The 2777.25 bias-up signal was attacked to within only 1 tick at 10:30. Actually touching it would have triggered noN-bias, which is more how the morning developed — shallow 5-6 point backing-and-filling that waited for the window to lapse.
And when the window began lapsing, the post-open recovery resumed. Surging 10 points from 2774.00 tested the morning’s 2784.00 bias-up target that I had suspected would be met anyway, but for having expended so much buying pressure so quickly this morning.
2784.00 has since held another 5-point pullback. Resolving up again is possible, all but marginalizing sellers for the day and confirming the trend remains up. Otherwise, fresh afternoon lows under 2778.00 would start to signal another rally effort had failed. Closing negative — if not also under this morning’s lows — would form a bearish Pivot Reversal unlikely to delay extending down.
Look ahead: Economic Calendar – for Wed Feb 20, 2019
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: No high-profile or influential reports are due Wednesday of this holiday-shortened week. But the afternoon’s FOMC Minutes should inhibit price action before its release, and have some effect on price action afterward.
MBA Mortgage Applications
7:00 AM ET
Redbook
8:55 AM ET
E-Commerce Retail Sales
10:00 AM ET
2-Yr FRN Note Auction
11:30 AM ET
*FOMC Minutes
2:00 PM ET
Afternoon Bias
| TUE afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2783.25 | 2783.00 |
| …would target | 2789.00 | 2788.75 |
| Bias-down: under | 2773.00 | 2773.00 |
| …would target | 2767.50 | 2767.25 |
| Signal status: NO-BIAS, TESTED BIAS-UP SIGNAL | . | |
| BIAS VIDEOS… INTRO // EXAMPLE | ||
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.