Posts by Rod David
Post-open Review… The white space wins.
Gapping up into untested territory finds natural resistance.
The overnight 2636.00-2648.00 range resolved up sharply to test 2655.00. Reacting down to 2649.00 had recovered entirely by the open, which then improved only momentarily to attack 2657.00. But the open only fluctuated around 2656.00.
A 10-point drop tested the 2647.00 bias-up signal, which held. So did a retest, triggering bias-up. Its 2653.00 bias-up target was met already, and it’s being tested again now up to 2655.00.
This is still a bias-up environment, so higher highs are likely. But it is difficult to attract sponsorship for trending ahead of the afternoon’s FOMC events. Meanwhile, the bias-up environment can retest its bias-up signal as support, which would become more vulnerable to breaking lower as the bias window lapses.
The First Trade & Pre-open Tour Recording… The range persists.
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…
Opening flat Tuesday at 2642.75 didn’t inhibit wide-ranging choppiness. Rallying up to 2650.00 and dropping down to 2638.25 was already volatile. But another bounce through 10:15 collapsed to within 3 ticks of overnight lows at 2629.25. Trending never arrived but the choppiness continued, perhaps inhibited ahead of AAPL’s post-open earnings. Dips recovered to 2644.00, and a late-afternoon dip to 2633.50 only recovered to within 2 points of unchanged at 2641.00. A retest of oversold RSIs at the morning’s low was left outstanding.
Overnight action’s new info…
AAPL’s earnings “surprise” wasn’t much, but it was the opposite of Monday and Tuesday’s warnings and misses. Its favorable response triggered a surge through the Globex open that probed Tuesday morning’s low by 1 point up to 2651.00. The pattern since then has largely tracked the prior night’s choppy ranging, probably becoming inhibited by this afternoon’s FOMC events, although last night’s range is actually widening. Reversing back down to 2637.50 bounced to 2647.00 and repeated; reversing down again attacked 2636.00 and bounced to now test 2648.00.
If, then… (notes to accompany the Tour recording)
Probing above Tuesday morning’s highs wouldn’t have been surprising. Yesterday’s post-close AAPL reaction might have fulfilled that potential, so repeating it this morning would likely extend at least a little further to test 2653.00. Sponsorship for much higher than that might be difficult to attract as this afternoon’s FOMC events grow nearer. Not probing higher, or quickly rejecting an early probe to avoid triggering bias-up, would create an attraction back down near yesterday’s low, which could retest yesterday’s low, but also lack sponsorship for digging any deeper before FOMC.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2648.50 would be likely to trigger the 2647.00 bias-up signal at 10:15. Exiting the open under 2645.00 would be unlikely to trigger bias-up.
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2648.25 | 2647.00 |
| …would target | 2654.25 | 2653.00 |
| Bias-down: under | 2634.50 | 2633.00 |
| …would target | 2629.25 | 2627.75 |
| Signal status: LATE BIAS-UP, BIAS-UP TARGET MET | . | |
| 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)
Tuesday’s flat open at 2642.75 eventually probed up to 2650.00, then reversed down to 2638.25. The reversal came in time to avoid triggering bias-up, but then a surge came in time to invalidate the no-bias. The no-bias objective was fulfilled anyway, as yet another reversal probed attacked overnight lows to within 3 ticks at 2629.25.
And that was it for Tuesday’s trending. An otherwise invalidated signal, nevertheless fulfilled. No other indications of sponsorship developed, and the balance of the session ranged choppily to barely probe positive territory. Perhaps inhibited ahead of AAPL’s post-open earnings.
An actual probe above Tuesday morning’s highs wouldn’t be surprising, as described during the Market Tour. Oversold RSIs at the low do require an eventual retest. Wednesday afternoon’s FOMC events may inhibit the morning’s volatility, but should enhance it in the afternoon.
UPDATE: AAPL earnings a little better than estimates, certainly not disappointing, and generating an upside reaction (for now).
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))
Monday’s test of the breakout’s 1.1485 target was also a second consecutive higher close in the pattern which requires at least an eventual third higher close. Tuesday was not it, as price shallowly backed-and-filled.
Gold Feb Contract (GC, ETF: (GLD))
The confirmed breakout finally probed above Sunday night’s highs, gapping up and hovering at fresh highs. While that fulfills the breakout’s minimum required third higher close, the pattern still has potential for extending to its 1319.50 target.
Silver Mar Contract (SI, ETF: (SLV))
Tuesday’s gap up to the downtrending channel’s high held its test intraday, just as Monday had held a test of the channel’s lower connector. Tuesday also fulfilled the confirmed breakout’s third higher close requirement, so the pattern isn’t required to extend any higher.
30-year Treasury Mar Contract (US, ETF: (TLT))
Recovering immediately again through 145-12 Tuesday not only rejected Monday afternoon’s rejection of the open’s similar setup, but also maintained the recovery and extended above Monday’s highs to signal at least a corrective bounce underway. Wednesday’s FOMC policy statement is being greeted from a position of strength.
Crude Oil Mar Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Monday’s gap down and intraday extension was likely an anomaly and unlikely to launch a new downleg. Tuesday’s gap up back to Monday’s open extended higher intraday to suggest as much, as well. A second consecutive higher close Wednesday would confirm, but it’s too late to qualify Tuesday’s recovery as greeting Wednesday’s EIA report from a position of strength.
Natural Gas Mar Contract (NG, ETF: (UNG, UNL))
Rolling coverage forward from Feb to Mar, and giving the pattern that session to coordinate the rollover for new parameters that could absorb Monday’s excessive drop.