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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))
Reversing down overnight essentially confirms the two intraday tests of last week’s highs had held, and that a top may have finished forming. Regardless, a second consecutive lower close on Thursday is still needed for confirmation.
Gold Dec Contract (GC, ETF: (GLD))
Still hovering under the lower-end of the 1236.00-1241.00 bounce limit Wednesday means still not reacting back down. Attacking or testing the bounce limit’s upper-end and closing under its lower-end should launch a new downleg. Otherwise, early weakness could extend but must still close lower to confirm.
Silver Dec Contract (SI, ETF: (SLV))
Flat-to-lower ranging Wednesday essentially held around unchanged at 14.70. Closing back under 14.60 would now signal momentum reversing down to 14.35 and possibly lower.
30-year Treasury Dec Contract (US, ETF: (TLT))
Wednesday continued hovering narrowly above the 138-04 sell signal. Having avoided its break for four consecutive sessions, the potential has grown for extending the corrective bounce to 140-26.
Crude Oil Nov Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Greeting Wednesday’s EIA report from a position of weakness broke to fresh lows at 69.63, on-track for fulfilling the minimum requirement for at least a third lower close.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
The gap back up to 3.28 was tested Wednesday morning, and was still holding or being tested into the afternoon. Closing under 3.25 can now greet Thursday’s EIA report from a position of weakness.
Mid-day Update… A detour to the detour’s detour?
Morning slide is retraced entirely.
The Globex-flip setup produced its minimum requirement, to produce bearish behavior through the morning. Exiting the open under the 2813.25 earlier Globex low collapsed 30 points down to 2783.25. It was already retraced 61.8% when the bias environment began lapsing at 11:30.
That should have held if the bearish influence were going to persist through tomorrow morning, too. Instead, extending higher through the noon hour has returned to the lower-end of the 2819.50-2823.00 bounce objective.
Just piercing the 2819.50-2823.00 lower-end would be likely to test its upper-end. And that would likely probe the 2814.00 overnight highs. All of which would make the next higher objective at 2838.00 likely. Perhaps the FOMC Minutes reaction will trigger that — anxiousness ahead of it is not.
So, avoiding fresh highs this afternoon would keep alive another downleg that resumes retracing and reversing yesterday’s rally. Even if originating from higher, that’s the likely resolution to having broken out of the multi-session Ascending Triangle.
Look ahead: Economic Calendar – for Thu Oct 18, 2018
A midday look ahead in preparation for economic reports and events scheduled for the next trading day.
Highlights: Thursday’s Fed survey is the only Fed survey with a reliable track record for influencing price action. And any noticeable price action is likely to be duplicated in reaction to the high-profile post-open LEI. In between is a high-profile Fed speaker who might add to the price influence.
Jobless Claims
8:30 AM ET
*Philadelphia Fed Business Outlook Survey
8:30 AM ET
*James Bullard Speaks
9:00 AM ET
*Leading Indicators
10:00 AM ET
EIA Natural Gas Report
10:30 AM ET
30-Yr TIPS Auction
1:00 PM ET
Fed Balance Sheet
4:30 PM ET
Money Supply
4:30 PM ET
Afternoon Bias
| WED afternoon signal (triggered at 1:20 ET) | SPX | ES |
| Bias-up: above | 2810.25 | 2811.00 |
| …would target | 2816.75 | 2818.50 |
| Bias-down: under | 2797.50 | 2799.50 |
| …would target | 2789.50 | 2791.50 |
| Signal status: BIAS-UP, BIAS-UP TARGET MET | . | |
| 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… Globex flipped.
Opening setup plays out quickly.
Probing the prior session’s high overnight, but exiting the open under the earlier Globex low, forms a Globex-flip setup. This morning’s open was greeted by a bounce from 2804.00 attacking the 2813.25 earlier Globex low to within 1 tick. Trending down 19 points since then has tested 2792.50.
Along the way, the 2803.00 bias-down signal triggered cleanly. Its 2795.00 bias-down target was being tested at 10:15 to avoid renewing the bias-down signal, but this is still a bias-down environment.
The Globex-flip’s influence should last through the morning. Otherwise, its influence should last through tomorrow morning. So, trending down this morning without recovering this afternoon would very likely trend down tomorrow morning, too.
Absorbing and reversing the bearish influence is possible whenever it has developed so quickly. Back above 2800.75 would target a corrective bounce up to 2807.00. Exiting the bias environment much higher could resume the bounce for its 2838.00 potential.