Posts by Rod David
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2367.75 | 2366.00 |
| …would target | 2374.00 | 2372.25 |
| Bias-down: under | 2358.75 | 2357.00 |
| …would target | 2354.00 | 2352.25 |
| Signal status: BIAS-DOWN, BIAS-DOWN 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)
Thursday’s “outside day” encompassed all of Wednesday’s range, and all but Tuesday’s first-minute gap up. That gap up had surged through the open. But Thursday’s gap up quickly reversed back into the range, and through it, for a 14-point drop.
So, add that to the list? Thursday’s 14-point post-open drop puts the rest of the list to shame –Tuesday’s 9-point drop from its morning high and 7-point drop through its close, and Wednesday’s 6-point drop after FOMC Minutes. That’s a lot of big, isolated drops within a 9-10 point range, during a brief 3-day window.
Something all of the drops have in common is their retracements. Thursday’s drop was retraced to within 2 points of its post-open origin. That’s larger than any of the prior drops. Their shallower recoveries each soon failed, so Thursday’s incomplete recovery suggests that optimism is healthily restrained. And that’s potentially bullish from a contrarian perspective.
Thursday’s late dip wasn’t productive early enough to be predictive of further selling pressure. It may have only stretched the rubber band to snap back up Friday. Regardless, the burden of proof is on sellers either to gap down substantially Friday or trigger bias-down to avoid probing higher highs.
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))
Unlike last week’s instance of a similar setup, Wednesday’s key-reversal did not extend higher overnight. Thursday morning did firm a little above or around its 1.0565 bounce limit.
Gold Apr Contract (GC, ETF: (GLD))
Early-morning comments triggered a surge that gapped up Thursday to fresh highs. And having just retraced Tuesday’s recovery by 61.8% Wednesday, the correction has likely refueled the rally to put its 1259.00 target into play. Closing under 1243.50 would signal instead that momentum is reversing down.
Silver Mar Contract (SI, ETF: (SLV))
Gapping up Thursday fulfilled the longstanding 18.18 objective. Closing above prior highs would also put into play an extended target at 18.72. Closing under 17.95 would signal that momentum is reversing down, instead
30-year Treasury Mar Contract (US, ETF: (TLT))
Another close at 151-11 Wednesday resulted in another overnight rally back to 152-26 resistance. Another bounce wasn’t required in order to resume the decline, but it’s interesting the redundant bounce didn’t extend higher and only ranged narrowly above 151-11 — ineffectual optimism.
Crude Oil Apr Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Gapping down Wednesday to the 53.58 sell signal and only fluctuating narrowly at it all day was reversed overnight to gap up Thursday. Attacking Tuesday’s prior highs up to 55.00 still didn’t extend higher, so no breakout formed.
Natural Gas Apr Contract (NG, ETF: (UNG, UNL))
Rallying even further overnight exacerbated the non-strong position that greeted Thursday morning’s EIA report. Two tests of 2.80 resolved down to 2.71, still likely to test Tuesday night’s 2.64 low.
Mid-day Update… A big bite at the apple
Another sell-off absorbed?
Holding a test of the 2362.75 bias-up signal had put into play an offsetting test of the 2354.25 bias-down signal. Fulfilling it had no particular timing, and could have taken longer than yesterday’s morning’s 2366.00 objective that was met pre-open.
But a dive to 2353.00 fulfilled the objective during this morning’s bias environment, and held it. It was only overlapped, and its RSIs made higher lows or diverged positively, so no lower objective was put into play. Testing this morning’s 2348.25 bias-down target was only potential, and still is.
Now a bounce has tested this afternoon’s 2362.00 bias-up signal to 2363.50. The signal held, triggering another no-bias. A drift or drop could test the 2353.50 bias down signal, and lower after the bias environment lapses.
Not yet resuming the decline coming out of the bias environment would be likelier to retest today’s high. Another attempt to sell-off wouldn’t have as much potential for holding and recovering.
Look ahead: Economic Calendar – for Fri Feb 24, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: One of Friday’s post-open reports is influential to price action. It’s also high-profile, especially with its influence on Fed decision-making.
New Home Sales
10:00 AM ET
*Consumer Sentiment
10:00 AM ET
Baker-Hughes Rig Count
1:00 PM ET