Posts by Rod David
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2272.50 | 2266.00 |
| …would target | 2277.50 | 2271.25 |
| Bias-down: under | 2265.00 | 2258.75 |
| …would target | 2259.75 | 2253.25 |
| Signal status: NO-BIAS, TESTED BOTH BIAS SIGNALS | 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)
Extending higher into Thursday’s close retested Wednesday’s 2264.50 close. The open had done that already, and then reversed down for the morning. Should the afternoon’s retracement be any more bullish?
Possibly, since recovering the morning’s selling pressures suggests its sponsorship wasn’t strong-handed. Closing above the morning’s high would have been helpful, so a hold-long could have been more compelling, especially ahead of Friday’s Employment Situation report.
Since Thursday afternoon’s buyers didn’t gain traction, rallying Friday all but requires gapping up. By the same token, sellers should once again be obvious very early if they’re actually retaking control. That’s essentially Thursday’s opening setup — and sellers not retaking control didn’t prevent a temporary dip, anyway.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
Pre-close View… Threading a needle.
REMINDER: MARKET WRAP BEGINS AT 3:33pm ET.
The afternoon’s 2060.50 bias-up signal was overlapped in time to invoke the grace period. It held long enough to avoid triggering. Price during the no-bias environment didn’t drift back down toward its bias-down signal. It hovered.
And 2060.50 started breaking higher when the bias environment lapsing came within view. Actually, a couple of minutes earlier — not very premature, but not optimal. Extending higher to 2262.25 has reacted down to 2259.00.
The final hour was not entered any higher than 2260.50. The afternoon rally is still undermined. The alternative is not necessarily to decline, but the window is open.
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))
Thursday’s open gapped up to the 1.0505-1.0520 bounce limit and extended through Friday’s 1.0615 prior high. Closing higher would target 1.0755, and potentially higher, regardless of the recent low’s range requiring a retest as support.
Gold Feb Contract (GC, ETF: (GLD))
Not already reacting down Thursday from Wednesday’s test of 1167.00 was instead likelier to extend the rally. Gapping up to 1174.00 extended higher through the morning to fulfill the next higher objective at 1184.20. Closing back under 1180.50 would signal momentum reversing down.
Silver Mar Contract (SI, ETF: (SLV))
Wednesday’s sub-optimal confirmation of Tuesday’s breakout didn’t prevent extending higher Thursday to test 16.75. Not already extending higher at Friday’s open would be vulnerable to correcting back down under 16.20.
30-year Treasury Mar Contract (US, ETF: (TLT))
Reacting down sharply from an overnight test of the 151-12 target didn’t prevent another test intraday, or extending that test sharply higher to 152-22. Its 152-02 pullback limit must break to suggest the surge wouldn’t be confirmed, and back under 151-24 would signal momentum reversing down. Otherwise, the rally could extend to test 152-26.
Crude Oil Feb Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Gapping up and extending higher through 53.45 “higher prior lows” and filling the gap back up to Friday’s 53.70 close was nevertheless reversed back down from 54.10 to 52.80 by Thursday morning’s EIA release. That didn’t reverse momentum down, as 53.70 was recovered. But 54.25 wasn’t recovered, which would have targeted filling the gap back to Tuesday’s 54.80 gap up.
Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
Thursday’s EIA release wasn’t greeted from a position of strength, which would have doomed an initially favorable knee-jerk reaction up. Regardless of its path, the resolution was down, fulfilling the 3.19 target which held while RSIs diverged positively, A bottom is free to form.
Mid-day Update… Slippery oil.
Afternoon rally undermined by Crude Oil drop.
The gap back up to yesterday’s 2264.50 close was only filled this morning, never probed. That wasn’t the differential to rallying later — sellers had already failed to retake control when that was required. But the likelihood for an afternoon rally would have been greater without sellers even trying to retake control again. Which they did.
Reaction to this morning’s EIA release sent Crude Oil down. The market fell with it from 2263.00 to 2256.50. Probing lower down to 2254.00 was retraced entirely through the noon hour back up to 2256.50.
The 2260.50 bias-up signal didn’t trigger, despite invoking the grace period. Hovering at it until the bias environment lapses would be vulnerable to then breaking higher, and essentially fulfilling the bias-up target.
Exiting the bias environment back under 2256.50 and lower would confirm what exiting the bias environment under the morning’s bias-down signal had suggested — undermining the afternoon rally scenario and all but reversing momentum down.