Posts by Rod David
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))
Not yet triggering the 1.1333 buy signal kept the pattern vulnerable to overnight probes of lower lows, which was most glaringly exploited by ECB comments Friday morning. But that didn’t prevent recovering back up to 1.1333 and remain postured to break higher.
Gold Feb Contract (GC, ETF: (GLD))
Rallying back above the 1317.00 buy signal to its highest levels at 1322.00 into Friday’s open. A pullback to 1317.00 was recovered to fresh highs after the close. A second consecutive higher close would confirm the breakout from a multi-session range.
Silver Mar Contract (SI, ETF: (SLV))
Thursday’s breakout under the multi-session range couldn’t be confirmed Friday if there were any near-term potential for filling the gap back up to the 2-week old 16.16 open above all prior highs. Friday’s gap up quickly attacked the lowered 15.70 buy signal. Its post-open pullback filled the gap back down to Thursday’s close before resuming the rally to fresh highs.
30-year Treasury Mar Contract (US, ETF: (TLT))
Thursday’s gap up to the 146-16 buy signal was still being tested at the close despite probing through it intraday. It was still being tested Friday morning, although the bigger picture has formed a bullish Ascending Triangle with two highs that stopped pessimistically short, which is potentially bullish from a contrarian perspective.
Crude Oil Mar Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Probing higher into Friday’s open gapped up to fresh 2-week highs and extended higher intraday to attack fresh highs for the month. The breakout has no reason to further delay extending higher from the multi-month inverted Head & Shoulders pattern we’ve been tracking.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Overnight lows at 2.55 that recovered to close above 2.60 would help to define a low forming, but closing above 2.70 is still needed to signal the low has launched an upleg.
Mid-day Update… Prove it.
Afternoon shifting between influences.
This afternoon’s bias environment shuts the door on two of this morning’s bullish influences, and opens the door to another.
The bullish Globex-flip setup triggered easily. Its influence applies either to this morning, or else through the following morning. The difference is identified during the interim afternoon. If this afternoon extends the rally, then it’s likely also to extend the following morning. But not extending the rally this afternoon would leave the following morning without the Globex-flip influence.
This morning’s other bullish influence is a usual Friday Factor. The morning’s bias signal tends to persist through the noon hour on Fridays. This morning’s bias-up was renewed. That didn’t translate into extending the trend, but a reversal was avoided. That inhibition is now done.
The opposite of bullish is not “bearish.” It is “not bullish.” Bearish requires its own signal. Enter the bearish WedEX.
Thursday’s gap down held under two prior relative lows to invert Wednesday’s bullish WedEX by proxy. The setup became bearish. Its influence spans Friday afternoon through Monday morning. Had the overnight rally extended higher this morning, I wouldn’t be surprised at the setup failing. It may yet, but all of that overnight buying pressure failing to extend post-open leaves the door below wide open — even without the bearish WedEX.
Meanwhile, notice the difference between NQ and ES in the nearby charts. Even the overnight rally is not broad. This afternoon’s bias-up didn’t trigger, despite being attacked to within 3 ticks during the noon hour. If trading a buy signal this afternoon, consider using smaller unit sizes and/or shallower targets.
REMINDER: This being a holiday weekend, there is no Saturday Review. Be sure to make stock chart requests by this afternoon.
Look ahead: Economic Calendar – for Mon Feb 18, 2019
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: U.S. markets are closed in honor of President’s Day. Globex opens normally Sunday night and Monday, but closes early intraday.
Globex normal open
Sun 6:00 PM ET
Globex close
1:15 PM ET
Globex normal open
6:00 PM ET
Afternoon Bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2771.25 | 2771.00 |
| …would target | 2778.50 | 2778.25 |
| Bias-down: under | 2760.00 | 2760.00 |
| …would target | 2753.50 | 2753.50 |
| Signal status: NO-BIAS | . | |
| 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.
Post-open Review… Paradigm shifted.
Overnight rally extends through the open.
Market Tour was recorded while the 2744.50 earlier Globex high was serving as support, after having recovered from probing yesterday’s 2730.25 overnight low. A bullish Globex-flip setup needed only to maintain that much of a recovery. But China trade headlines triggered the rally’s resumption.
By the time of my pre-open comments, the nearest buy signal was 2757.75. It was triggered just minutes later by a surge up to 2769.00. The open held up, and has already been rewarded by a fresh high at 2773.00 as more China trade headlines hit.
This being a Friday, the morning’s bias signal tends to persist through the noon hour. That doesn’t require extending higher, or that extending higher be steep. Being a bias-up, a reaction down could test the 2753.00 bias-up signal as support. But the Globex-flip setup suggests the rally will persist through the morning.
None of which affects the bearish WedEX influence due this afternoon. The setup can’t be inverted again, and can only be invalidated by not trending down during the afternoon bias environment and final hour. Meanwhile, trend extremes aren’t normally associated with expirations, and a new trend extreme close on a Friday all but requires another trend extreme close before a reversal down is credible.