Posts by Rod David
The First Trade… The lower-end.
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…
Thursday’s intraday drops each bounced sharply, and each bounce failed. Only one probed a fresh intraday high, retracing the drop from 2141.25 that was triggered by Draghi’s comments. That one resolved down deepest to 2126.50. Two more made lower highs resolved down, and the session ended at 2135.00. Newly created “unfinished business above” at 2141.50 lies under the previously created objective at 2145.50.
Overnight action’s new info…
Initially trying to bounce again was cut short quickly at 2138.50. The balance of the night has trended down in an orderly series of lower lows and lower highs. A 4-point bounce from 2128.75 is now retraced entirely, hovering a couple of points above yesterday’s lows.
If, then…
Thursday’s bounces weren’t the first to stop pessimistically short of resistance in recent days. That’s potentially bullish from a contrarian perspective, and it has proved bullish recently, so the same bullish resolution is still getting a benefit of the doubt. But the waiting period isn’t indefinite, and it’s pent-up buying pressure can become irrelevant if expiration isn’t exploiting it already soon after the open. Finding support at lower levels to launch a bigger rally would not be unusual — except for expiration, which is often single-minded in its intraday trending. Regardless of gapping down, trending up from the open remains possible, and still likelier, but also necessary to avoid potentially trending down into the weekend.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2133.00 would likely avoid triggering the 2130.50 bias-down signal at 10:15. Exiting the open under 2127.75 would likely trigger bias-down.
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2145.75 | 2139.75 |
| …would target | 2151.50 | 2145.50 |
| Bias-down: under | 2136.50 | 2130.50 |
| …would target | 2130.00 | 2124.00 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET MET | 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)
Absorbing drops is potentially accumulation. And accumulation is potential. It is stored energy, just waiting for its cap to be flipped and its carbonation to explode upward. The cap begins being flipped by probing prior highs. But Thursday’s pattern is of lower highs. Rising lows, too — which only increases the carbonated pressure.
The nearest attractions of “unfinished business” is above, at 2141.50 and 2145.50. There’s also a likelihood of extending to 2050.00. WedEX missed its chance to entrench that upside Wednesday, and only hovered under resistance. Pessimistically short of resistance, which is potentially bullish from a contrarian perspective. But irrelevant until next week if expiration doesn’t exploit it.
NOTE: THERE IS NO SATURDAY REVIEW THIS WEEKEND DUE TO TRAVEL. PLEASE REQUEST CHART ANALYSIS INTRADAY IN THE CHARTROOM.
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… Poised.
Another pullback, another recovery attempt.
The pre-open drop on Draghi’s comments were recovered entirely soon after the open. The mid-morning 14-point plunge was recovered entirely, too. Almost, actually, just 1 point short of the earlier bounce.
Now that recovery has pulled back 8 points, and recovered all but 2 points of it.
None of the drops are gaining traction. Whether they’re trapping shorts depends upon whether a recovery produces fresh highs. So far, only lower and lower highs. Only slightly lower highs, but lower and lower.
And now a new timing window has begun.
There remains potential to rally, just needing to be triggered above 2138.00-2139.75 through a relevant timing window — the only remaining candidate is the 3:37-3:52 position-squaring window. The alternative isn’t necessarily to fall, but back under 2134.50 could extend back down to this morning’s 2126.75 low.
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 ECB meeting was greeted after the decline’s 1.0994 objective had been met, but without having recovered to close above 1.1011 signaling a bottom forming. Surging sharply to 1.1065 was reversed down even more sharply to fresh lows at 1.0940. The next lower objective in-play is 1.0865 if Friday doesn’t reject Thursday’s break lower.
Gold Dec Contract (GC, ETF: (GLD))
Wednesday’s gap up above the 1266.00 buy signal had not extended higher intraday. That didn’t necessarily preclude extending higher, and neither does Thursday’s dip back down to the 1266.00 buy signal as support. But another attack on the lows first can’t yet be ruled out.
Silver Dec Contract (SI, ETF: (SLV))
Wednesday’s session-long fluctuation around prior highs had not gained any traction, stopping short of its 17.80 buy signal, Thursday’s dip isn’t necessarily bullish, but it does help to insert more “ineffectual pessimism” that is potentially bullish from a contrarian perspective.
30-year Treasury Dec Contract (US, ETF: (TLT))
Several days of chipping away at 164-08 resistance, and finally probing higher intraday, was probed even higher on Thursday. Holding above 164-08 allows extending the bounce to 165-30 or 166-19.
Crude Oil Dec Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Wednesday’s retest of the rally’s 51.50 target had ended the day overlapping its prior test as was expected. Already gapping down to and or through 50.80 Thursday is too abrupt of a start to be confident a new downleg is now beginning. But that continues to be the likely resolution.
Natural Gas Nov Contract (NG, ETF: (UNG, UNL))
Greeting Thursday’s EIA report from Wednesday’s test of the 3.14 pullback limit still allowed room for noise down to 3.09-3.11. Entering the weekend back above 3.14 is the minimum requirement to maintain any near-term upside potential, without requiring a deeper pullback.