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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 Dec Contract (EC, ETF: (FXE, UUP))
Thursday’s dip had filled the gap back down to Tuesday’s close, preserving the pattern’s opportunity to extend through its 1.1370 buy signal. The alternative would be to retrace the entire pattern back down to its 1.1285 low, which is where Friday’s gap down opened. A rally would still be credible, but only if begun without delay coming out of the weekend.
Gold Feb Contract (GC, ETF: (GLD))
Friday’s gap down to 1237.00-1240.00 was as much selling pressure as would be appropriate for a temporary pullback before resuming the rally. But not immediately rejecting that deep of a dip is essentially signaling the rally’s momentum has lapsed, if not already reversing down.
Silver Mar Contract (SI, ETF: (SLV))
Uptrending support coincided Friday at 14.70, and gapping down under it extended to fill the gap back down to Tuesday’s 14.60 close. That gap was created while filling the prior session’s gap, so there isn’t any bullish reason for its retest. Any further delay to resuming the rally would be bearish.
30-year Treasury Jan Contract (US, ETF: (TLT))
Thursday’s close was too deep to maintain the rally’s momentum, which had been hanging on only by default. Immediately recovery 143-08 Friday would have reinstated it, but the session only ranged flat-to-higher. There is no active signal.
Crude Oil Jan Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Friday continued fluctuating in the basing pattern without breaking higher into the weekend, and likely at least to blip-down and stretch the rubber band before snapping back up into a rally.
Natural Gas Jan Contract (NG, ETF: (UNG, UNL))
Greeting Thursday’s EIA report from a position of weakness absorbed its gap up, which was reversed back down to uneven. The reversal extended down overnight and gapped open to fresh lows Friday attacking 3.80. There is no active signal.
Mid-day Update… A late break.
Morning’s support being tested.
The 2625.00 post-open low was well above the overnight low.
But it held a test of Tuesday’s late low. And so did a mid-morning drop, after an interim bounce attacked 2641.00. Oh, and this is Friday.
Usually, Friday’s sponsorship is evident by the morning’s end. If trending is attempted, then either it is successful, or it is not. And if not, then that sponsorship is done for the day. It’s a function of Friday Factors, which are behaviors specific to two days of impending illiquidity.
So, breaking under 2625.00 as this morning’s bias environment lapsed was unusual. The dip tested 2610.00 and avoided triggering this afternoon’s bias-down. Which hasn’t prevented a fresh low from testing 2607.50.
The late decline is credible, this being a Friday. If the decline is valid, then it could be substantial — not only down to this afternoon’s 2603.00 bias-down target and Monday’s 2588.00 low, but potentially much lower into and out of the weekend. Absorbing the late extra dip back above 2622.00 would still have potential back up to positive territory.
Look ahead: Economic Calendar – for Mon Dec 17, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Monday’s two econ reports are relatively high-profile, but not reliably influential to price action. Nevertheless, any noticeable reaction to the pre-open report will likely be duplicated in reaction to the post-open report.
Empire State Mfg Survey
8:30 AM ET
Housing Market Index
10:00 AM ET
Afternoon Bias
| FRI afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2621.25 | 2625.25 |
| …would target | 2627.75 | 2631.75 |
| Bias-down: under | 2608.00 | 2612.00 |
| …would target | 2599.00 | 2603.00 |
| Signal status: NO-BIAS | . | |
| NEW: BIAS VIDEOS… INTRO // EXAMPLE | ||
1. At 1:20, 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 1:20 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 1:20 would invoke a grace period through 1:30 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 1:30 after invoking the grace period would trigger “noN-bias,” with no bias influence.
Post-open Review… Restrained optimism.
Post-open bounce stops short of its potential.
Eking higher from the 2617.25 overnight low go to 2631.50. Dipping into and out of the open tested Tuesday’s 2625.75 low by 3 ticks and bounced. Two more pullbacks also recovered on the way to probing the 2638.75 bias-down target by 1 point, retracing 61.8% of the overnight drop.
RSIs diverged negatively, and the next pullback didn’t stop until probing the opening low down to 2623.00. But having held a test of Tuesday’s low as support through the opening 15 minutes, its retest after 10:15 was likely to hold, too. Which it did, now reacting up to 2636.00.
Holding support, and stopping pessimistically short of touching yesterday’s 2641.25 “higher prior lows” suggest that sellers are marginalized for the morning. Probably. But not maintaining its recovery above 2636.00 keeps the door open just enough.
Back under 2627.25 would give another downleg a chance to form. Otherwise, fresh highs could recover positive territory.