Posts by Rod David
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2296.75 | 2292.00 |
| …would target | 2302.25 | 2297.75 |
| Bias-down: under | 2288.00 | 2283.50 |
| …would target | 2282.50 | 2277.75 |
| Signal status: NO-BIAS, TESTED BIAS-DOWN SIGNAL | 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)
The immediate rally that was required by Monday’s close was perhaps a little too immediate. Overnight action had already tested Friday’s 2294.00 prior high. And post-open action was still testing its resistance — not rejecting it, but not overpowering it, either. Maintaining the overnight rally, and Tuesday’s gap up, triggered bias-up. But it was never any more productive than its pre-10:15 high, and was rejected back under the pre-10:15 low.
The consequence was to test 2286.50. It was met during the noon hour, and it supported the afternoon range. Like the morning’s 2294.00 resistance, the 2286.50 support avoided breaking, and also avoided reversing. Breaking lower overnight would target a test of 2280.75.
Recovering an overnight dip by Wednesday’s open to isolate it, or avoiding an overnight dip altogether, could launch the rally leg that had been threatened at Tuesday’s open. Not already somehow rallying at Wednesday’s open would keep the door open to a deeper 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))
Gapping down Tuesday to 1.0690 tested the same level that had barely held two weeks prior. Closing any lower would seal a top, targeting 1.0550 so long as 1.0750 isn’t recovered.
Gold Apr Contract (GC, ETF: (GLD))
Probing only slightly higher overnight still maintained Monday’s post-close test of the 1235.00 target. The next higher potential objective at 2259.00 is not in-play, but the second consecutive higher close does now require at least an eventual third higher close.
Silver Mar Contract (SI, ETF: (SLV))
Still fluctuating choppily around prior highs Tuesday morning resolved up to a fresh high to trigger a breakout, putting into play 18.18.
30-year Treasury Mar Contract (US, ETF: (TLT))
Monday’s close above the 151-11 maximum bounce limit was extended higher overnight to test 152-00.That was still retraced to gap down and probe lower post-open Tuesday. But attacking 150-24 was deep enough to snap back up to even higher highs at 152-17, next targeting 153-12.
Crude Oil Mar Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Extending Monday’s dip overnight gapped down under uptrending support and the recent relative low at 52.60, then trended down sharply to attack the month-old low at 51.70. A second lower close Wednesday would confirm a new downleg is underway.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Monday’s bounce extended slightly higher overnight to gap up Tuesday. The 3.12 bounce limit held its test. Clolsing back under 3.06 would now resume the decline next targeting 2.91.
Mid-day Update… Rally takes a detour.
Sliding into and out of the noon hour.
The open’s gap up dipped just long enough to probe 1 point under this morning’s 2291.25 bias-up signal. then it quickly recovered to probe the overnight high by 1 point up to 2295.00. The bias-up signal triggered, but price only ranged narrowly back down to 2292.00 until the bias environment lapsing came within view.
Then price slid under the pre-10:15 low. That might not have been relevant, except price had never probed above the pre-10:15 high. Exiting the bias environment back at or under the open’s low invalidated the bias-up. Its target did not become “unfinished business above.”
That pattern created sell signals under 2290.00 targeting 2286.50. It was probed during the noon hour by 1 point. The afternoon’s 2288.00 bias-down signal was still being tested for long enough to trigger noN-bias.
Holding the test of 2286.50 allows the dip to be no more than a temporary detour before resuming the rally. Isolating the dip to the noon hour would have been helpful, but the reaction up was too shallow if not also too late. Regardless, the rally need not resume today, but it’s still possible so long as no fresh lows are probed.
Look ahead: Economic Calendar – for Wed Feb 8, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Wednesday’s mid-morning EIA report is the only post-open report, which might enable it to be more influential than normally.
MBA Mortgage Applications
7:00 AM ET
EIA Petroleum Status Report
10:30 AM ET
10-Yr Note Auction
1:00 PM ET