Posts by Rod David
The First Trade… Back, and forth, and back again.
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 open was in recovery mode from having probed Sunday night lows overnight, failing to reach the 2095.00 objective that had been put into play Wednesday afternoon. Two attacks on 2114.50 were held and reversed up sharply, to and through the relevant 2134.00 level, testing 2144.50 as the afternoon bias environment began lapsing. A sell signal at 2140.50 was probed twice, never deeper than its first 3 minutes, not until after the cash session close.greeted by three main influences. Overbought RSIs were left outstanding at the high, but buyers otherwise gained no traction.
Overnight action’s new info…
The pattern of substantial swings into expiration is still playing out. Thursday’s late sell signal under 2140.50 extended down without delay to its 2134.75 and 2132.25 objectives, which retraced the afternoon’s 1:20 print AND its bias-down signal. Then volatility disappeared, as price ranged narrowly back up to 2136.00. Europe’s opens broke the mood, triggering a couple of downlegs that have now tested support at this morning’s 2127.00 bias-down target.
If, then…
Not gapping up limits the potential for a morning rally, since yesterday’s buyers gained no traction. Maintaining a gap down under 2134.00 helps to reject the single close above it yesterday, which threatened the ongoing distribution pattern. The close must also reject any intraday probe above 2134.00, with the aid of only a slightly bearish WedEX. That, and the overnight decline’s momentum, which seems to be snapping back down after yesterday’s rally had stretched the rubber band. But regardless of opening level, the most reliable directional indicator will be how the first 15 minutes of volatility resolves its gap down.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2125.00 would be likely also to exceed the 2127.00 bias-down target through 10:15 to renew the bias-down signal, next targeting 2121.25. Exiting the open under 2130.50 would be likely at least to trigger the 2132.75 bias-down signal at 10:15. Exiting the open above 2134.75 would be unlikely to trigger bias-down.
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2150.50 | 2143.50 |
| …would target | 2156.00 | 2149.00 |
| Bias-down: under | 2139.75 | 2132.75 |
| …would target | 2134.00 | 2127.00 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET EXCEEDED | 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)
Thursday’s session was greeted by three main influences. They are the 2134.00 dividing line that indicates whether sellers are retaking control, the 2095.00 retest of Sunday night’s low that was attempted Wednesday night, and the not-bullish WedEX that Thursday’s open failed to further define.
Each is described in detail during the post-market Wrap. Also discussed are two new elements. The first is overbought RSIs left outstanding at Thursday’s 2144.50 high. Retesting it could extend to “higher prior lows” from Monday afternoon at 2049.00, which itself could be probed up to 2050.50. Second is that Thursday’s rally gained no traction. Gapping up could compensate for that, which the unfinished business above at Thursday’s overbought RSIs could incite.
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… No room for noise.
No-bias trending retraced to a critical level.
This afternoon’s 2132.25 bias-down signal finally held as support after invoking the grace period. Late no-bias allowed room for noise up to the 2139.75 bias-up signal, which a buy signal above 2134.75 essentially put into play.
The 2139.75 bias-up signal was tested, and then exceeded, with room for noise above it to 2143.50. Its test was overlapped up to 2144.50. Overbought RSIs there require a retest. A dip recovered to within 1 tick of 2144.50. Any higher would have put into play 2149.00, which is “higher prior lows” from Monday afternoon’s rally.
Instead, another dip is now testing the afternoon’s 2139.75 bias-up signal. The probe above it required being retraced, since its timing had made it “no-bias trending.” Often, the bias timing window’s 1:20 pm print is also retraced. And that was the 2132.25 bias-down signal.
The extra retracement under 2139.75 isn’t required. But it’s being attempted now. And despite overbought RSIs at the 2144.50 high requiring a retest, the rally hasn’t gained traction, so at least a corrective dip is possible.
Also relevant will be whether the close is back under 2134.00. Closing above it today won’t (yet) invalidate the two prior sessions having closed under it. But closing under it after having probed above it intraday would help to confirm that sellers remain in control.
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 Sep Contract (EC, ETF: (FXE, UUP))
Thursday morning’s surge retested 1.1265 resistance. Again. And it held. Again. Chipping away at its resistance doesn’t yet assure breaking higher. But not yet reversing down Friday morning would make a break higher much likelier.
Gold Dec Contract (GC, ETF: (GLD))
Sliding sharply Thursday morning thoroughly tested support down to 1312.00, and reversed up sharply to attack 1324.50 resistance. It’s the new bounce limit, and reversing its test back down under 1313.00 would next target the 1296.00-1297.00 objective still outstanding.
Silver Dec Contract (SI, ETF: (SLV))
Spiking up at Thursday’s open to 19.25 was reversed down to 18.88, but not to extend down. In fact, recovering into positive territory essentially ranged around unchanged and 19.00. Retesting prior lows should get underway before the weekend or else a bigger corrective bounce would become very likely.
30-year Treasury Dec Contract (US, ETF: (TLT))
Retesting Tuesday’s 164-22 low Thursday down to 164-17 didn’t extend down, but still needed to be recovered into positive territory and above 165-30 to signal that a bottom had formed.
Crude Oil Oct Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Did Thursday form a bullish Pivot Reversal? Gapping up slightly was reversed down from 44.21 to almost fill the outstanding gap at 43.22. It was attacked to within a nickel while piercing its bar by 2 cents. Regardless, reversing back above the morning’s high attacked 44.35. Any initial strength Friday would be credible for extending sharply higher intraday. Otherwise, almost any delay would be likely at least to probe fresh lows down to 43.25 42.25.
Natural Gas Oct Contract (NG, ETF: (UNG, UNL))
Wednesday’s reversal down from its 2.98 pre-open fresh high to 2.85 extended only slightly lower to 2.83 before the EIA report triggered a recovery up to 2.95. The 3.04 target remains in-play, although a second consecutive higher close Friday would help to confirm.