Posts by Rod David
The First Trade & Pre-open Tour Recording… Paralyzed by anxiousness.
Proper context can start the day with a solid win and make all the difference.
DAILY SCHEDULE
First, watch the pre-open Tour recording HERE <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A
Through the prior close…
Thursday’s open had reversed down from probing Wednesday’s 2690.00 high to probe 5-6 points under the 2681.75 earlier Globex low. The reversal formed a potentially bearish Globex-flip setup, but it never confirmed under Wednesday’s 2674.25 last relative low. . The reversal was delayed so long it had developed a Too-late to break setup that offered an opportunity to recover. The recovery opportunity was exploited by a morning-long rally up to 2708.00, meeting the rally’s next higher target at 2701.00. was met. Perhaps inhibited ahead of the post-close AMZN earnings and anxiousness ahead of Friday’s pre-open Employment Situation report, the balance of the session ranged flat-to-lower down to 2693.00. Late comments regarding China trade negotiations triggered a surge attacking 2708.00 through the close.
Overnight action’s new info…
Sympathy with AMZN’s reaction to its warning was overcome by more China trade headlines that pushed price up to attack 2712.00 until the Globex open. Gapping back down to 2708.00 ranged sideways, nearly recovering while also eking out a deeper pullback to 2701.00. A relatively narrow 2701.00-2708.00 range has since contained price action, perhaps paralyzed by anxiousness ahead of this morning’s Eployment Situation report.
If, then… (notes to accompany the Tour recording)
Thursday’s late surge was early enough to have recovered 2701.00 before coming within 3 minutes of the cash session close. Closing above 2701.00 puts into play the next higher objective at 2756.00. Despite the catalyst for its recovery being a headline, 2701.00 doesn’t seem to be at risk of an opening rejection. Nevertheless, a second consecutive confirming close today is vital to maintaining the upside momentum. Otherwise, today could be devoted to only backing-and-filling, without reversing the trend back down, which would have room to 2656.00-2666.00.
First Trade…
[Click here to view the Bias parameters] No preliminary indications are considered before an Employment Situation report.
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2712.25 | 2711.00 |
| …would target | 2720.75 | 2719.50 |
| Bias-down: under | 2699.75 | 2698.75 |
| …would target | 2692.25 | 2691.25 |
| Signal status: LATE BIAS-UP | . | |
| 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’s open was greeted by two potentially bearish setups, the Globex-flip and the Too-late to break. Globex-flip formed by maintaining the open back under the 2681.75 earlier Globex low. But it never confirmed back under Wednesday’s 2674.25 last relative low. And the Too-late setup’s reaction back to the overnight range wasn’t rejected. Sellers didn’t exploit the setups.
The rally’s sponsors smelled blood in the water and swarmed, launching a rally up to 2708.00 by noon. The rally’s next higher target at 2701.00 was met. The balance of the session ranged flat-to-lower down to 2693.00, perhaps inhibited ahead of the post-close AMZN earnings and anxiousness ahead of Friday’s pre-open Employment Situation report. Late comments regarding China trade negotiations triggered a surge attacking 2708.00 through the close.
Closing above 2701.00 puts into play the next higher objective at 2756.00. Thursday’s late surge was early enough to have recovered 2701.00 before coming within 3 minutes of the cash session close. But the late surge was a headline reaction, so a second consecutive confirming close is vital. Reacting down has room to 2656.00-2666.00 before starting to signal the rally is ending.
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 Mar Contract (EC, ETF: (FXE, UUP))
Wednesday afternoon’s surge up to 1.1545 in reaction to FOMC fulfilled the confirmed breakouts requirement for at least an eventual third higher close. Its optimal 1.1520 pullback limit was probed Thursday morning back down to the 1.1485 prior target. .
Gold Feb Contract (GC, ETF: (GLD))
Wednesday’s post-close surge in reaction to FOMC had fulfilled the rally’s next higher objective at 1326.50, and it was maintained overnight and probed above 1331.00. Thursday’s gap up to 1328.50 above all prior highs will need to be retested eventually from below.
Silver Mar Contract (SI, ETF: (SLV))
Already firming Wednesday afternoon ahead of FOMC, the rally persisted overnight to fresh highs that extended higher at Thursday’s open up to 16.20. The open’s 16.13 gap up above all prior highs will need to be retested eventually from below.
30-year Treasury Mar Contract (US, ETF: (TLT))
Resuming Wednesday’s late break without hesitation after the close extended higher overnight to gap up above 146-00 and extend further Thursday morning to 146-28. The confirmed breakout now requires there to be at least an eventual third higher close. Pullbacks must hold 146-08/1467-16 to maintain near-term upside momentum.
Crude Oil Mar Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Ranging narrowly sideways overnight broke higher Thursday morning to 55.37. But the afternoon reversed down sharply back down to “lower prior highs” at 53.80, which Wednesday’s open had gapped up above. A deeper pullback must hold 53.30 to maintain the breakout’s momentum.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Thursday’s EIA report wasn’t greeted from a position of strength, especially not after two consecutive sessions had printed fresh intraday lows. Falling back down to last Friday’s 2.80 low was redundant having been a test of early January lows. Closing above 3.05 is needed to indicate a bottom has formed, but the pattern is otherwise at risk of extending down.
Mid-day Update… Decision point.
Next higher objective met.
Consolidating around this morning’s 2695.00 bias-up target tried reversing down, after a violated pullback limit tried resolving up too quickly.
Both attempts failed. The rally resumed finally at the bias environment exit.
The next leg extended to 2708.00, slicing through the rally’s 2701.00 next higher target at noon. Price action since then has fallen back down to attack 2695.00.
Today’s upside momentum may have lapsed. Downside momentum hasn’t necessarily taken its place. Which might seem an odd conclusion, since this afternoon’s 2699.25 bias-down just triggered — albeit late. Sellers still get a benefit of the doubt, especially if the bias environment lapses under its 2699.25 bias-down signal or 2691.25 bias-down target.
Regardless, closing above 2701.00 would put into play the rally’s next objective at 2756.00. Only closing back under yesterday’s 2690.00 high would start to signal momentum reversing down more substantially.