Posts by Rod David
Pre-market Tour (recording & summary)
The 2149.75 overnight high’s reaction down to unchanged had bounced off of 2144.00. That reached 2147.25 before reversing down to a fresh overnight low at 2143.00. And not only a fresh overnight low, but also testing yesterday’s late last relative low.
Isolating the probe above yesterday’s highs to the overnight action would be a big first step to trending down sharply intraday. Despite all of the bullish elements I describe in this morning’s Tour, that could make the difference today between extending the recovery, and resuming the decline.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Banking the turn.
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…
Monday’s 2145.75 gap up above last week’s range formed an anchor setup. Reacting down into its noon hour low held last week’s “lower prior highs” down to 2140.50. Bouncing through the afternoon eventually recovered enough to touch the opening print, stopping pessimistically short of touching fresh highs. The close qualifies as a breakout from a multi-session range. The breakout wasn’t optimal, since the session never actually broke its intraday pattern of lower lows and lower highs..
Overnight action’s new info…
Monday afternoon’s recovery gradually extended higher overnight. Slowly retracing Monday’s anchor setup never seemed optimistic, let alone impatient. The final upleg began at Europe’s opens, and probed above yesterday morning’s anchor to within 1 tick of the rally’s 2150.00 objective. The only sort of sentiment extreme has been by sellers, sliding quickly back down to unchanged at 2144.50 as while Italian bank Monte Paschi plunges.
If, then…
Extending Monday’s rally overnight doesn’t necessarily dismiss the potential to form a bearish “session-long decline” setup. It would be triggered by gapping down back under Monday afternoon’s 2142.25. The trigger wasn’t very far away as of Monday’s close, and not much further when fulfilling the 2150.00 objective overnight — which has been retraced entirely. There’s no assurance of retesting the overnight high, let alone extending through it. Probing positive territory post-open would prevent isolating the overnight optimism, and help to avoid what could otherwise be a very bearish day.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2149.00 would be likely to trigger the 2148.00 bias-up signal at 10:15. Exiting the open under 2143.75 would be unlikely to trigger bias-up.
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2154.00 | 2148.00 |
| …would target | 2159.00 | 2153.00 |
| Bias-down: under | 2147.25 | 2141.25 |
| …would target | 2141.50 | 2135.50 |
| Signal status: NO-BIAS, BIAS-DOWN SIGNAL TESTED | 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)
Monday’s noon hour dip held last week’s “lower prior highs” down to 2140.50. Bouncing through the afternoon eventually recovered to touch the 2145.75 opening print. Trading there within 3 minutes of the close, after having probed intraday both above and below makes the breakout vulnerable to failure.
Monday’s close came after trending down intraday, so it wasn’t an optimal breakout of a multi-session range. One bearish open would form a “session-long decline” setup, after trending up into one close, and then gapping down back under the prior afternoon’s 2142.25 low. The vulnerability to reversing down dissipates if Tuesday’s open isn’t already behaving bearishly. Monday’s opening anchor setup still suggests the intraday pullback will recover and extend higher next targeting 2150.00.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
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))
Gapping up Monday didn’t extend intraday, as the decline’s 1.0865 target remains outstanding just under Friday’s low.
Gold Dec Contract (GC, ETF: (GLD))
Initially recovering from an overnight dip under 1266.00, Monday eventually dipped back down to the overnight lows, suggesting the bounce is stopping short of its potential to 1283.50 and resuming an attack on the lows.
Silver Dec Contract (SI, ETF: (SLV))
Monday’s gap up above prior highs also tested 17.80 resistance that had yet to be touched. Holding it keeps alive potential to attack recent lows before a credible rally leg can begin.
30-year Treasury Dec Contract (US, ETF: (TLT))
Firming slightly overnight to 165-10 was reversed into negative territory Monday, testing the 164-08 level that keeps alive the bottoming pattern, let alone bounce potential to 165-30 and 166-19.
Crude Oil Dec Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Probing fresh relative lows Monday under 50.00 still didn’t immediately attract sponsorship to extend at least a corrective leg. But a downleg remains likely so long as 50.80 is not recovered.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
Friday’s break under the 3.14 pullback limit resolved in another gap down Monday that extended to new lows for the month under 2.86. Friday’s break from a two-day range suggests that Monday confirmed it, now requiring at least a third eventual lower close. The two-day range wasn’t optimal, so a new low close might be avoided — but I would still hesitate buying weakness.