Posts by Rod David
The First Trade… Holding on.
Proper context can start the day with a solid win and make all the difference.
CHARTROOM LINK
(pre-open Market Tour begins at 8:55 ET)
Through the prior close…
Gapping up on the FBI’s Clinton news formed a “session-long rally” setup. It was less reliable for having formed over a weekend. But intraday timing windows complied, anyway, with all but one probing above its prior timing window’s high. The exception was the final hour, which dipped 5-1/2 points from attacking 2125.00. Rallying 10-1/2 points through to test 2130.00 could be dismissed for barely probing fresh highs while the position-squaring window had begun lapsing.
Overnight action’s new info…
Gapping back down slightly at the Globex open extended through the afternoon’s mid-day “lower prior highs” defined by 2123.50, and into the late pullback’s consolidation at 2121.25. The drop was fully retraced to retest 2130.00. Another reaction down is now attacking 2123.50.
If, then…
Continued compliance with Monday’s “session-long rally” would probe higher this morning, if not actually trend. The next higher attractions 2134.00 and 2138.00. But not gaining traction yesterday requires gapping up to launch any durable trend. So, rallying without gapping up would be likely to reverse down this afternoon. Neither gapping up nor rallying could repeat the overnight pullback, but probably not hold support at Monday’s mid-day “lower prior highs” that already held overnight. So, a pullback would more likely target 2118.25, and possibly 2113.50 before suggesting yesterday’s rally is actually reversing down.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2121.25 would be likely to trigger the 2123.50 bias-down signal at 10:15. Exiting the open above 2127.00 would be unlikely to trigger bias-down.
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2137.50 | 2132.50 |
| …would target | 2142.75 | 2138.00 |
| Bias-down: under | 2128.25 | 2123.50 |
| …would target | 2123.25 | 2118.25 |
| Signal status: BIAS-DOWN | 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)
The gargantuan character of Monday’s rally was attributed as much to its catalyst as to its timing, The FBI weighed in favorably on Clinton, after a relentless two-week decline from 2150.00 had fulfilled its 2082.00 target. That perfect storm may be responsible for fulfilling a session-long rally, despite the setup’s intervening weekend which often renders the setup unreliable.
But intraday timing windows complied with the session-long rally template by there being only one exception to each probing its prior timing window’s high. Essentially, that was the final 60-90 minutes which pulled back.
Surging to fresh session highs into the close at 2130.00 was isolated to after the position-squaring window had begun lapsing. Dismissing that would allow the session to comply fully with the session-long rally template. Continuing to comply would suggest Tuesday morning will probe higher, possibly trending, next attracted to 2134.00 and 2138.00.
A pullback could test Monday’s mid-day “lower prior highs” down to 2123.50 without even hinting of reversing the trend. Dipping deeper to 2118.25 would start to threaten, but still have room down to 2113.50.
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… We found the exception.
Final window is dipping.
Each timing window of a session-long rally tends to probe its prior timing window’s high. There’s usually one exception. The likeliest candidate was the noon hour, but that wasn’t it. It seems to be the second likeliest candidate, which is the final 60-90 minutes..
The noon hour and bias environment each probed their prior timing window by a single tick, attacking 2125.00. That’s a single tick more than the final 60-90 minutes, which has slid to 2119.50.
A pullback’s objective is at least 2118.25, if not also 2113.50. Testing either would still not reverse the trend back down. And if the session-long influence remains intact — its influence today possibly being more coincidental — then tomorrow morning should recover to probe above today’s highs.
Fresh highs would next target 2134.00 and possibly 2138.00. Simply sliding into another downleg is possible, albeit unlikely after today’s rally.
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))
Ranging around the 1.1100 target had never broken higher, but an Ascending Triangle had formed through Friday, thanks to its inside day. Nevertheless, gapping down under the range’s low Monday and extending down intraday signals a reversal targeting 1.1000 and potentially also 1.0965. It’s likely only a temporary corrective leg since it had originated from a failed Ascending Triangle.
Gold Dec Contract (GC, ETF: (GLD))
Gapping down Monday extended to actually test the 1284.00 pullback limit that was narrowly avoided at Thursday’s open. Regardless, Friday was the opportunity to reject Thursday’s intraday recovery, so Monday’s dip should prove to be only a retest of the pullback low. Otherwise, confirming the break would target at leas 1266.00 and probably 1252.50.
Silver Dec Contract (SI, ETF: (SLV))
Gapping back down Sunday night extended lower Monday morning to attack or test the 18.05 pullback limit which had held Thursday’s gap down. It’s probably too late to confirm the original break since it wasn’t rejected immediately Friday.
30-year Treasury Dec Contract (US, ETF: (TLT))
Gapping down Monday back under the 163-02 bounce limit has no more traction than the probes above it — until closing under 162-16. Regardless, extending down would be in-line with expectations to better form a bottom by probing under it again, probably to 160-10.
Crude Oil Dec Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Already having bounced early Friday from the decline’s 43.75 target, opening firmer or gapping up Monday was free to extend higher. So, the session’s restrained optimism does suggest that actually rallying could be very productive, regardless of its vulnerability to the decline eventually extending.
Natural Gas Dec Contract (NG, ETF: (UNG, UNL))
Gapping up slightly Monday was not the rejection of Wednesday’s gap down that would launch a credible recovery. Closing above 2.88 and 2.91 remain the minimum requirement to being signaling the decline has ended and that momentum may be reversing up.