Posts by Rod David
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2282.75 | 2278.75 |
| …would target | 2288.00 | 2284.25 |
| Bias-down: under | 2274.50 | 2270.75 |
| …would target | 2268.00 | 2264.00 |
| 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)
Wednesday’s close was the third consecutive to end at 2275.00. Following Monday’s opening plunge, that might seem like stability. No, it is indecision. The longer that strong-handed buyers don’t sponsor a recovery, the likelier that another downleg to lower lows will be required. Unless Thursday’s open were to maintain a gap up, a test of 2248.50 has become likelier.
FOMC is now history. Earnings announcements have tapered off. BOE announces its policy statement Thursday morning, and then headline risk can pause. That is, until Thursday afternoon, when markets may become paralyzed by anxiousness ahead of Friday’s Employment Situation report.
Actually, volatility preceding FOMC wasn’t very restrained. Neither was volatility following it. Two attempts to break lower each failed — but, from above the morning’s low, which makes the pattern distributive and not accumulative. So, Thursday afternoon volatility can’t be ruled out. Unfortunately, I will be unavailable after noon to annotate it in the chaRTroom.
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))
Tuesday’s gap up to prior highs that closed higher needed confirmation from a second consecutive higher close. Gapping down Wednesday didn’t make that likely. Tuesday’s close above prior highs at 1.0815 still represents a gap wanting to be filled, and likely to be filled, until rejecting it by closing under a prior low like 1.0750.
Gold Apr Contract (GC, ETF: (GLD))
Wednesday’s dip back under the 1206.50 sell signal by almost $7 avoided producing a new downleg, since it was recovered through the close. Closing back above Tuesday’s 1218.00 high would target 1235.00 and potentially also 1259.00.
Silver Mar Contract (SI, ETF: (SLV))
Tuesday’s test of the 17.63 objective and its fulfillment of a fresh recovery high close, was not extended Wednesday. This doesn’t equate to rejecting it, and a higher close Thursday would still have room up to 18.18 or 18.72.
30-year Treasury Mar Contract (US, ETF: (TLT))
Extending the corrective bounce Monday and Tuesday to 151-05 did not change whether it was only a correction. Sliding Wednesday morning back under Monday’s low to 149-23 greeted the FOMC Minutes with downside momentum, and after having expended a lot of buying pressure without gaining any traction for the effort.
Crude Oil Mar Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Weak reactions to production and inventory reports offered another opportunity to resume the decline, which Tuesday’s open had otherwise isolated to Monday night. The session held a test of the 53.50 buy signal.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Already having fulfilled the 3.12 objective Tuesday, closing back above 3.15-3.20 could signal the decline’s momentum has lapsed. Probing it overnight was nevertheless reversed by Wednesday’s open, and not recovered again.
Mid-day Update… The market’s eager for a catalyst.
FOMC news and its reaction on their way.
This morning’s rejection of the bias-up signal wasn’t decisive enough to rely on an offsetting test of the bias-down target. Testing only the 2270.75 bias-down signal down to 2268.25 may have satisfied selling pressure. May have.
Meanwhile, this afternoon’s 2275.00 bias-up signal was touched but not triggered. As much buying pressure as could be expended without reversing the trend up was expended. Not a position of strength.
Greeting the 2:00 FOMC news from under 2270.75 would be likely to extend down. Perhaps this morning’s 2265.25 bias-down target is met, after all — and broken on the way to testing 2248.50.
A bullish reaction would be likelier if the news were greeted from above 2277.00-2278.50. Regardless, note that earnings and tomorrow’s BOE statement are still going to inhibit sponsorship.
Look ahead: Economic Calendar – for Thu Feb 2, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Jobless Claims on Thursday has a chance to influence price action this week, since it comes one day prior to Friday’s payrolls. Otherwise, none of Thursday’s several reports have any reliable track record for influencing price action.
.Challenger Job-Cut Report
7:30 AM ET
*Jobless Claims
8:30 AM ET
Productivity and Costs
8:30 AM ET
Gallup Good Jobs Rate
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
EIA Natural Gas Report
10:30 AM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET