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Saturday Review’s recording (for 1/12/19) …No shortage of catalysts.
Yearly earnings begin this week, which also includes monthly expirations. All against the backdrop of a government shutdown and ongoing trade negotiations with China. Do those bricks comprise the proverbial Wall of Worry that this recent rally has been climbing? And if this rally is only a temporary corrective bounce, then where is it likely to end, and how will we know it has ended? These questions and more are answered during this week’s Saturday Review.
The following stock requests were reviewed in this order:
JPM, WFC, WDC, GE, GS, MS, RYE, FDX
transcript
Rod David: -=-=-=-
Rod David: Welcome to Saturday Review. Please post questions and comments as they occur to you.
jp: gm
Bill G: gm
David B: Good Morning
—————– (01/12/2019 09:36) —————–
Mark G: gm
—————– (01/12/2019 09:47) —————–
ljr iPad: pivot reversal applies to stocks too?
ljr iPad: :)
—————– (01/12/2019 10:01) —————–
David B: because of option expiration will it still leave questions unanswered either up or down?
David B: because of what option expirations can do
—————– (01/12/2019 10:04) —————–
Bill G: This option ex unusual since the following Mon is a holiday.
—————– (01/12/2019 10:05) —————–
ljr iPad: stocks: JPM WFC earnings tues morning.
Mark G: FWIW general perception that the rally may persist thru March with VIX coming down fast until we get China resolution & brexit news that may turn things around
David B: will some of the earlier reports to earnings and reactions important on how the market reacts for the next move?
ljr iPad: GS: earnings wed morning.
David B: yes
ljr iPad: MS: thurs morning
ljr iPad: thx
—————– (01/12/2019 10:09) —————–
David B: if we see bad news react positive means they were priced in?
—————– (01/12/2019 10:11) —————–
Mark G: AAPL’s warning followed by a very bearish day, Similar warning by smb else now may not have that effect
—————– (01/12/2019 10:13) —————–
ljr iPad: would news related pop or drop need to be retraces? ie shutdown or China?
—————– (01/12/2019 10:14) —————–
Mark G: right
Mark G: I mean a dip that is being bought
—————– (01/12/2019 10:18) —————–
David B: WDC,GE
—————– (01/12/2019 10:29) —————–
Bill G: RYE equal wt energy etf. At resist?
—————– (01/12/2019 10:33) —————–
Bill G: pbl or stop on GE?
—————– (01/12/2019 10:34) —————–
David B: FDX
—————– (01/12/2019 10:41) —————–
Bill G: Near .382 of May high and 50day ma also
—————– (01/12/2019 10:45) —————–
Mark G: more reliable pivot reversal would start reversing aftre 11:30?
—————– (01/12/2019 10:49) —————–
David B: yes
Mark G: thx much
Bill G: Have a good one
David B: Thanks
Saturday Review Link
Be sure to join us by 9:30am ET for this weekend’s Saturday Review. After discussing the bigger picture and gaming out strategies for playing next week’s likelier opening setups, we’ll do instant analysis of any stock charts that you request… See you there!
Morning Bias
| MON morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2600.50 | 2600.50 |
| …would target | 2607.50 | 2607.50 |
| Bias-down: under | 2583.75 | 2584.25 |
| …would target | 2575.50 | 2576.00 |
| Signal status: LATE BIAS-DOWN SIGNAL, BIAS-DOWN TARGET MET | . | |
| BIAS VIDEOS… INTRO // EXAMPLE | ||
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)
Ultimately, Friday’s session offered nothing predictive or insightful to the bigger picture. It was an Inside Day, and almost exclusively developed in negative territory.
The pre-open setup we had anticipated and discussed during the Market Tour did develop, albeit slowly. Waiting so long to break the overnight range proved unable to extend, recovering back into the overnight range.
The morning’s bias-down triggered, but held tests of its 2581.00 target down to 2577.00. The bias-up signal’s resistance broke higher as the bias environment lapsed. But only to briefly fill the gap back Thursday’s 2594.00 futures close by 2 points. Another dip coming out of the noon hour was too late to trigger bias-down. Bouncing from there eventually filled the gap back to Thursday’s 2596.75 cash session close.
Nothing about Friday’s session indicates the uptrend has ended and that 2606.00 can’t be tested soon. By the same token, nothing indicates much momentum to extend through its room for noise up to 2626.00, or to maintain any intraday probe of fresh highs. And being an Inside Day, let alone shallow, gapping down under its afternoon low would be disqualified from forming a reversal setup.
Details and other markets coverage are discussed in the post-market Wrap recording here.
JOIN US AT 9:30 ET FOR SATURDAY REVIEW.
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 having corrected Wednesday’s surge on Thursday, Friday’s open gapped up. But it was soon reversed to fresh pullback lows. While the breakout isn’t confirmed, its reaction down has room to 1.1510 before suggesting Wednesday’s surge won’t be revisited soon.
Gold Feb Contract (GC, ETF: (GLD))
Friday’s Flat-to-higher narrow ranging wasn’t predictive, but also doesn’t confirm any recent selling efforts, which keeps alive near-term potential to resume the rally targeting 1319.50.
Silver Mar Contract (SI, ETF: (SLV))
Fluctuating narrowly around unchanged Friday was still just under recent highs that have yet to be rejected, suggesting at least some probe of fresh highs is coming.
30-year Treasury Mar Contract (US, ETF: (TLT))
Holding the 145-08 pullback limit allowed bouncing to test the 146-04 buy signal, which was tested Friday morning. Tested, and held, as did Monday’s test of its 147-12 buy signal. Recovering 146-04 Monday would target 147-12, whether as only a temporary corrective bounce or to resume the rally. Closing under 145-08 would launch a more substantial decline.
Crude Oil Feb Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Already having retraced 61.8% of the prior consolidation’s range, fresh highs overnight testing 53.30 couldn’t afford to hesitate extending. But the open was met in negative territory and soon tested 51.20, with room to test 51.00 before signaling a deeper reaction down underway.
Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
After absorbing Thursday’s EIA report, Friday flat-to-higher ranging suggests that sellers are reducing their pressure. Another nickel higher to close above 3.15 would start to seal a bottom.