members-only
Saturday Review’s recording (for 11/3/18) …Warning shot, or correction?
On net, last week’s gain wasn’t substantial. But it a weekly gain had become rare, so there’s that. And Fridays close — even being well under its pre-open high — was much, much higher than Monday’s trend low. So, there’s that.
Whatever that is, it hasn’t accomplished enough to qualify as reversing the trend up. Perhaps it is a “warning shot across the bow” at bears that the turn is coming, or at least that it is forming. Or, likelier, perhaps it is only a correction, expending a maximum amount of buying pressure and refueling buyers without reversing the trend up.
This week’s Saturday Review describes each resolution, and their likely paths, while applying the rule sets of my methodology, which can be applied consistently across all liquid markets.
The following stock requests were reviewed in this order:
AAPL, BKNG, DATA, WDC, UA, NEWR, DIS, SYMC, SQ, WYNN, QCOM, TTWO, GE
transcript
Mark G: gm
David B: Good Morning
Rod David: Welcome to Saturday Review. Please post comments and questions as they occur to you.
—————– (11/03/2018 09:39) —————–
Mark G: Sat Review section that usually has link didn’t have today – just a recording from last Sat
Mark G: yes
Mark G: k
—————– (11/03/2018 10:06) —————–
Mark G: simply extending higher can leave the Q if the bottom is in still open
—————– (11/03/2018 10:08) —————–
Bill G: Will a rally from between the current price and 2683 still be considerered a corrective rally even if the rally extends above 2800.?
Mark G: can this H&S break falsely higher to retest its head & then reverse down?
—————– (11/03/2018 10:19) —————–
ljr iPad: stocks (all earnings this week). Looking for positions of strength/weakness to play the earnings event. Thx
ljr iPad: monday: BKNG
ljr iPad: tues: DATA, NEWR, DIS
ljr iPad: wed: SQ, WYNN, QCOMM
ljr iPad: thurs: TTWO
Bill G: Bigger picture it6 wstill could?
—————– (11/03/2018 10:22) —————–
Bill G: 2806 would still be short of a trend change longer term?
—————– (11/03/2018 10:29) —————–
David B: WDC – Does it look like this has completed a bottom?
David B: UA,SYMC
—————– (11/03/2018 10:36) —————–
David B: what level f pull back would be a concern?
David B: levl of a pull back
David B: yes
—————– (11/03/2018 10:48) —————–
David B: is symc a jan candidate?
—————– (11/03/2018 10:52) —————–
David B: what closing level for GE would indicate the selling is done?
—————– (11/03/2018 10:54) —————–
Mark G: RSI diverged positively in SQ on a retest but perhaps it already perfomred on this
—————– (11/03/2018 10:57) —————–
Bill G: Sorry another mkt question—The mkt has corrected about .382 of the distance from Mon low and Fri high. Would a rally from here be considered weaker then if the pullback extended closer to .618 before rallying? I’m thinking the mkt may be about to start the second leg of a corrective rally before starting at least another test of the low.
—————– (11/03/2018 11:09) —————–
ljr iPad: thanks for review and stocks. I’ll watch recording.
—————– (11/03/2018 11:14) —————–
Bill G: ok,thanks. Have a good one.
Mark G: thx much
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 | 2728.00 | 2728.50 |
| …would target | 2736.00 | 2736.50 |
| Bias-down: under | 2708.75 | 2709.50 |
| …would target | 2700.25 | 2701.00 |
| Signal status: NO-BIAS, TESTED BIAS-UP SIGNAL | . | |
| NEW: 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)
Thursday night’s 35-point surge was triggered after midnight by favorable China trade war news. Friday morning’s Employment Situation report couldn’t have been greeted much more optimistically. Especially not after gaining no traction for rallying into AAPL’s earnings, and then reacting only within the afternoon’s range and no lower. Potential to 2766.50 was attacked to within 1 tick.
The report didn’t trigger much of a reaction. But more important, there was no reaction left to trigger. And the favorable overnight China story was starting to fall apart. So did the market, which invalidated the morning’s bias-up signal, and trended down through the noon hour. Its 2700.00 target was probed by 6 ticks.
The balance of the session chopped higher. First to 2715.00 which was reacting down 11 points on the way to new lows. Next was another spike up to 2728.00 on China trade news. It was still negative territory, and a bias-down, so the balance of the session ranged sideways.
Details and other markets coverage are discussed in the post-market Wrap recording here.
JOIN US FOR SATURDAY REVIEW AT 9:30 am ET.
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))
Initially extending the bounce up to 1.1495 stopped short of “higher prior lows” 1.1515 before intraday action formed a bearish key-reversal that reversed into negative territory down to 1.1410. The lows require at least a retest, which closing back under 1.1400 would signal is underway.
Gold Dec Contract (GC, ETF: (GLD))
Friday’s narrow sideways ranging around 1235.00 doesn’t confirm Thursday’s steep rally, and keeps the door open to closing back under 1228.00 to resume the decline.
Silver Dec Contract (SI, ETF: (SLV))
An overnight dip initially attacked the 14.70 sell signal before rallying sharply Friday morning to attack 14.95. But that was only reversed through the afternoon to again attack 14.70.
30-year Treasury Dec Contract (US, ETF: (TLT))
A week of correlating to stocks’ direction seems to have disengaged Friday. This was despite initially probing under 138-04 more shallowly than Thursday test while stocks had gone higher. Nevertheless, crashing stocks were apparently looking elsewhere in their flight-to-safety, as fresh pullback lows fell to 137-12. Resuming the rally relies on not only avoiding a second consecutive lower close Monday, but also on Sunday night or Monday morning price action almost immediately rejecting Friday’s break to make it an anomaly.
Crude Oil Dec Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Already piercing Thursday’s lows Friday morning down to to 62.63, avoiding a new downleg depends on closing back above 63.35, and then not delaying a recovery leg.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
Gapping down from Thursday’s retest of the 3.25 buy signal bounced off of its 3.17 prior low, which had also become a sell signal if pierced. The reaction was steep and substantial, reversing back up through 3.25 to retest Thursday’s 3.29 high.