Posts by Rod David
Post-open Review… Easy does it.
Gap up eventually extends through overnight highs.
Pre-open action had pulled back to 2138.50, apparently eking out a last bit of selling pressure. Post-open action quickly firmed back up to test the 2141.50 bias-up target.
Not quickly resolving down aggressively was already unlikely to extend down later. Just as importantly, not quickly rallying aggressively was likely to have reserved its buying pressure, so that last Thursday’s 2144.50 high could be exceeded.
And 2144.50 was exceeded. A 5-point surge started after exiting the first 15 minutes of volatility, momentarily touching 2146.75. Retesting 2144.50 essentially fulfills the renewed bias-up target. But retesting 2144.50 so slowly also makes the next higher objective likely, too.
That next higher objective begins at last Thursday’s 2149.00 “lower prior highs” up to 2150.50 and slightly higher. Avoid violating a pullback — currently testing one at 2145.00 — and the rally is likely to persist through the morning. Back under 2141.25 would signal momentum reversing down.
Pre-market Tour (recording & summary)
The open is being greeted with the overnight rally still fluctuating at or above this morning’s 2141.00 bias-up target. Several points of room under it could be probed post-open before even suggesting that momentum may be reversing down — but reversing down is likely to be done aggressively, if the overnight rally is being reversed. Just backing-and-filling or hovering in positive territory would more likely reflect restrained optimism, which would be more bullish from a contrarian perspective.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Not for lack of trying.
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…
Friday had gapped down back under 2134.00 and slid to attack 2123.00. Bouncing 10 points was retraced by an afternoon dip retesting 2123.00. RSIs were borderline oversold as support was chipped away, but the balance of the session retraced its midday bounce. Resistance held at 2134.00, so the distributive signal remains intact. Distributive action persists, resistance held when it had an opportunity to recover, and any unfinished business is below..
Overnight action’s new info…
Sunday night can be characterized as optimistic. Its flat open didn’t wait long before price suddenly spiked up 8 points to 2141.00. The wait was a lot longer before extremely narrow ranging around 2139.00 suddenly surged again to probe higher into Europe’s opens. Twice testing 2144.00 has come within 1 tick of Thursday morning’s 2144.50 high, and its overbought RSIs, both times reacting down under 2141.00.
If, then…
Friday afternoon’s buyers gained no traction, so rallying this morning requires gapping up, which is currently indicated. But it could face a new challenge if Thursday morning’s 2144.50 high were to hold a test as resistance — especially if its reaction were to exit the open back under Thursday’s 2140.00 and/or 2137.50 closes. Exiting the weekend with extreme sentiment can often be a sentiment extreme, and rallying ahead of this week’s FOMC and BOJ statements may be difficulty. Otherwise, successfully negotiating Thursday’s highs would next target “higher prior lows” beginning at 2149.00 to above 2150.50.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2143.50 would be likely also to exceed the 2141.50 bias-up target through 10:15 to renew the bias-up signal. Exiting the open above 2138.00 would be likely to trigger the 2136.00 bias-up signal at 10:15, unless Thursday morning’s 2144.50 high were tested first,.
Correction: Sunday night’s ACTUAL Globex link…
I apologize for the error: The last email’s link was to yesterday’s Saturday Review.
Sunday night’s Globex link…
Trading will resume in several moments. Terror scares in New York, New Jersey and Minnesota greet the Globex open. Their effect on price action will be interesting, but otherwise irrelevant. I’ll check-in for anything requiring comment. You can monitor in the chaRTroom here.