Posts by Rod David
Pre-market Tour (recording & summary)
The overnight slide that had originated just before Europe’s opens has extended sharply lower pre-open. This morning’s 2167.25 bias-down signal and its 2162.25 target are far exceeded down to 2157.50. Rallying back above the target and preferably also above 2164.25 through the open would suggest this morning will recover. Otherwise, a renewed bias-down target of 2155.00 might seem optimistic compared to how much room below there is, not to mention a potential air pocket.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Pivot point.
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…
The front-month rolled forward to Dec at Thursday’s open, and it got a lukewarm greeting. Gapping down almost 5 points from Wednesday’s 2179.00 cash session close remained in negative territory throughout the day. The morning probed under the prior session’s low, triggering bias-down. So much for the luke. The balance of the session warmed enough to restrain its pessimism and to avoid trending down. But there was no recovery, and the morning’s 2167.25 bias-down target was left outstanding.
Overnight action’s new info…
Ranging narrower than 2 points hovered just above Thursday’s ~2170.00 lows, until Europe’s opens approached. The range’s break extended down to test and retest 2167.25. Ranging back up to 2169.50 has resolved down to lower lows testing 2165.00..
If, then…
The overnight drop has neutralized the only “unfinished business” left outstanding from Thursday, at 2167.25. Thursday’s “ineffectual pessimism” just got pretty effectual. Potential for isolating the selling to overnight was limited since Wednesday morning’s Pivot Reversal setup had created a bearish context likely to persist into this morning. No traction was gained by Thursday’s drop, so trending Friday morning must begin by gapping under Thursday’s lows. And this being a Friday, the morning’s bias is likely to persist through the noon hour. Any bullish potential depends on rallying through the open.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2170.75 would suggest the 2167.25 bias-down signal will not trigger at 10:15. Exiting the open under 2164.25 would be likely to trigger bias-down.
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2185.75 | 2177.75 |
| …would target | 2191.25 | 2183.25 |
| Bias-down: under | 2175.25 | 2167.25 |
| …would target | 2170.25 | 2162.25 |
| 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 gap down remained in negative territory throughout the day. The session probed under the prior session’s low. It would have been more pessimistic to actually close under the prior low, so Thursday’s session was “ineffectual pessimism.”
This tends to resolve in one of two ways. A bearish resolution would gap down for a delayed confirmation of what originally had been ineffectual. The bullish resolution would gap up and trend higher, however durable or temporary that might be. Since no traction was gained Thursday, trending at all Friday morning must begin by gapping beyond Thursday’s range anyway.
The only “unfinished business” left outstanding is below at 2167.25. Testing it overnight could be recovered before the open, but Wednesday morning’s Pivot Reversal already makes a Friday morning recovery unlikely. So, Friday’s two likeliest scenarios are either gapping down and trending lower into the weekend, or else a weak rally effort that fails, and reverses down through the afternoon.
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 Sep Contract (EC, ETF: (FXE, UUP))
Tuesday’s retest of Friday’s 1.1215 spike high had held, but was still likely to test 1.1300 before reversing back down. And 1.1300 was probed Thursday up to 1.1330 in reaction to ECB news, before reversing back down into negative territory under 1.1255. That only filled the gap back to Wednesday’s close, but back under 1.1225 should trigger a much deeper drop.
Gold Dec Contract (GC, ETF: (GLD))
.Simply closing negative Wednesday had signaled the bounce had ended. Closing under 1343.00 would signal momentum reversing down. Presumably, the decline targeting 1296.00-1297.00 has been reinstated, albeit not necessarily in a straight, uninterrupted path.
Silver Dec Contract (SI, ETF: (SLV))
Thursday morning resumed sliding gradually to break under the 19.85 pullback limit that was still being tested at Wednesday’s close, and then to extend under the 19.75 sell signal.
30-year Treasury Dec Contract (US, ETF: (TLT))
There was no bullish reason to dip any deeper Thursday after Wednesday’s false break above 171-02 had already filled the gap back down to Tuesday’s 170-21 close. But Friday’s open gapped down to and through the 170-00 sell signal and extended down sharply to 168-12, proving that support had been chipped away. Holding 168-22 as resistance would allow this leg to extend down to 167-28.
Crude Oil Oct Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Wednesday’s post-close surge to 45.80 resistance could have served by proxy for retesting Sunday night’s 46.53 high, but it was thoroughly retested overnight anyway. And that greeted Thursday morning’s delayed EIA report, which pushed price much higher to test 47.55. Closing back under 46.15 would start to signal momentum reversing down
Natural Gas Oct Contract (NG, ETF: (UNG, UNL))
A couple of factors had suggested the 4th-day reaction of the four-day sequence was only delayed, and that Thursday would behave bullishly to compensate. In fact, the open gapped up above 2.71 and extended intraday to 2.82, needing only to close above 2.74 to signal momentum reversing up.