Posts by Rod David
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2274.50 | 2269.25 |
| …would target | 2280.25 | 2275.25 |
| Bias-down: under | 2266.50 | 2261.50 |
| …would target | 2261.75 | 2256.50 |
| Signal status: NO-BIAS, TESTED BIAS-UP 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 frustratingly narrow 3-4 point range finally started breaking as the 3:37-3:52 position-squaring window opened. And it wasn’t only noise, as fresh post-open highs were probed up to 2267.25. The breakout’s late timing and its shallow measurement undermine its credibility. But maintaining through the close suggests it’s not a false breakout.
Regardless, the proof of a false breakout, or not, will be similar to conditions established for the prior close. The bullish scenario is likely to be an overnight rally, gapping up to extend to new highs intraday targeting 2278.25. The alternative is likely to have stretched the rubber band, so that Thursday morning can snap back and trend down to fresh lows under 2248.50.
WedEX did not form a setup. Its several inputs seldom all present, but a signal can be derived anyway. Its basis is required, which can be trending or intraday probing of a relevant prior high or low. That has not formed in this week’s narrow range so far. Gapping open substantially on Thursday could qualify by proxy.
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))
Already gapping down Wednesday from Tuesday’s opening gap up isn’t likely to suddenly launch a new downleg. There’s also a likelihood for even the most bearish scenario to still at least touch 1.0750.
Gold Feb Contract (GC, ETF: (GLD))
Narrow ranging overnight around 1212.00 persisted through Wednesday morning. Tuesday’s fulfillment of the “unfinished business above” may have ended the rally, but its opening print above all prior highs should still be tested from a pullback.
Silver Mar Contract (SI, ETF: (SLV))
Tuesday’s gap up above all prior highs was extended to a slightly higher close Wednesday that confirms the breakout, and requires at least an eventual higher close. The gap back down to 16.95 and 16.75 can be tested as support while maintaining the higher objective.
30-year Treasury Mar Contract (US, ETF: (TLT))
Gapping down Wednesday under 152-22 extended down intraday through the gap back to Friday’s 152-04 recovery close, and through it to 151-22. Closing back above 152-04 would keep the door open to yet again retesting recent highs. Meanwhile, the dip has room down to 151-10 before sealing a top.
Crude Oil Feb Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Tuesday afternoon’s retest of the morning’s 52.50 pullback limit’s test was already bordering on overkill. Probing under it overnight and gapping down Wednesday to 51.50 threatens the entire corrective bounce and its 53.80 and 54.80 gap fill objectives.
Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
Gapping down Wednesday stopped short of the nearby gap close wanting to be filled at 3.23 before bouncing to range sideways through the morning. So long as 3.50 isn’t recovered, even the gap down to 3.19 can be filled on this pullback.
Mid-day Update… Anxiousness attack?
Another narrowing range.
This morning’s recovery had attacked the 2266.00 bias-up signal. It didn’t trigger, but did define the window’s upper-end. Its lower-end was a dip down to 2261.50.
Several more bounces each have returned down to 2261.50. The interim bounces are lower and lower, forming a Descending Triangle. The pattern was free to break lower coming out of the noon hour. That window came and went, with 2261.50 holding as support.
Beige Book is scheduled at the top of the hour. I can’t attribute the hesitation to its impending release, since it hasn’t been that influential for awhile. Anyway, the narrowing range began too early for it to be associated directly.
Maybe it’s the final hour’s scheduled appearance by Fed chair Yellen. Finally releasing the Beige Book data could be enough to allow some reaction. But I would be concerned about the lack of volatility if the session ends with this range persisting.
Look ahead: Economic Calendar – for Thu Jan 19, 2017
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Thursday morning’s ECB policy statement is already a weighty event. It’s usually followed by a press conference by Mario Draghi, whose comments often have a reliably wild whipsaw effect during the next half-hour. Other high-profile and influential items follow through the morning.
*ECB policy statement
7:45 AM ET
Housing Starts
8:30 AM ET
Jobless Claims
8:30 AM ET
*Philadelphia Fed Business Outlook Survey
8:30 AM ET
Bloomberg Consumer Comfort Index
9:45 AM ET
*John C. Williams Speaks
10:00 AM ET
EIA Natural Gas Report
10:30 AM ET
EIA Petroleum Status Report
11:00 AM ET
10-Yr TIPS Auction
1:00 PM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET