Posts by Rod David
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2263.00 | 2259.00 |
| …would target | 2268.00 | 2264.00 |
| Bias-down: under | 2257.25 | 2253.25 |
| …would target | 2252.00 | 2248.00 |
| Signal status: NO-BIAS | 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.
Post-market Wrap (recording & summary)
Thursday afternoon’s no-bias environment had probed 2 points above its 2256.00 bias-up signal. This was no-bias trending that required being retraced, at least to the signal, if not also to its 2255.00 1:20 print. It was reversed down to 2253.00.
2253.00 was also the upper-end of a shallow consolidation at session lows. Its support is at least obligatory, and it did produce a reaction up to 2256.00. But until also recovering the 2258.00 high, the 2253.00 support is only obligatory, and the bounce only temporary. Not immediately recovering 2258.00 Friday would target fresh lows at 2249.50.
Trending is difficult in a low-volume environment, and when participation is evaporating at an exponential pace because of the impending three days of illiquidity. Trending that does get started in this environment is difficult to stop during a timing window, let alone to reverse — especially during the same timing window.
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… Done, or done?
Ending volatility, or resuming the decline.
This morning’s test of the 2252.25 objective was retraced up to 2258.00. That was through the noon hour and during the bias environment. The no-bias environment’s 2256.00 bias-up signal needed to define the window’s upper-end, which it did, attracting price back down to it as the bias environment lapsed.
And then lower. The 3:10-3:20 proxy window extended down to 2253.00. The only lower support is obligatory, it’s the upper-end of the shallow consolidation off the morning’s low. Any lower would resume the decline, next targeting 2249.50.
It’s late, and it’s thin, so extending down isn’t as reliable today as it would be earlier in the day, or in the week. Meanwhile, bounces should be limited to 2256.00.
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))
Probing higher overnight was mostly retraced before Thursday’s open, which extended higher again to and through the overnight high to attack 1.0545. The gap back down to Tuesday’s 1.0435 low close should still be filled before a durable rally can get underway.
Gold Feb Contract (GC, ETF: (GLD))
Thursday’s fluctuation around unchanged didn’t suggest any new buying sponsorship had arrived which would otherwise help to prevent extending the decline to its next lower objective at 1118.00. Meanwhile, a bounce must hold 1147.00-1149.00 to keep the lower objective in-play.
Silver Mar Contract (SI, ETF: (SLV))
Initially dipping Thursday morning only attacked Tuesday’s 15.75 opening gap down which requires a retest, before reversing into positive territory. Essentially all of the bounce was rejected, still needing to test the “unfinished business below” to help complete a bottom forming.
30-year Treasury Mar Contract (US, ETF: (TLT))
Slightly higher highs overnight at 149-11 were retraced into Thursday’s open and then extended down slightly intraday down to 148-12, as at least one more lower close remains outstanding before a durable bottom can form. Meanwhile, the potential for a more substantial corrective rally should be considered on a close above 149-22.
Crude Oil Jan Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Dipping Wednesday back down to the 52.50 buy signal and then deeper overnight and intraday. Recovering back above 53.00 was only nominal compared to the outperformance the pattern needs to produce immediately to indicate the buy signal’s retest had held.
Natural Gas Jan Contract (NG, ETF: (UNG, UNL))
Higher highs overnight at 3.62 were somewhat retraced into Thursday’s open, and then retested into the morning’s EIA report. While the reaction didn’t extend up, the pullback held 1-2 cents above 3.49 to avoid reversing momentum down.
Mid-day Update… Morning’s over.
Trending requirement satisfied.
Overnight action as compared to yesterday’s intraday action had made this morning likely to trend. Either the probe under yesterday’s lows would be maintained and extend, or it would be rejected and reversed.
It wasn’t rejected. Also, clean bias-down didn’t trigger at 10:15. And bias-down still hadn’t triggered at 10:30. But that wasn’t necessarily bullish, and the drop extended to this morning’s 2252.25 bias-down target.
2252.25 was overlapped while being pierced by 3 ticks and never broke lower. The noon hour bounced, but only to within 3 ticks of this afternoon’s 2256.00 bias-up signal. This is a no-bias environment.
Resuming the decline would have room down to its 2250.50 bias-down signal through 2:30 — under 2249.50 would suggest 2243.00 is also in-play. Otherwise, recovering above 2256.00 as the bias environment starts lapsing would target fresh post-open highs, like 2262.00 or higher.