Posts by Rod David
The First Trade… Flat and happy.
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…
Tuesday’s open greeted the new week by surging back to Friday’s high, but holding its bias-up signal. Diving to the offsetting test of its bias-down signal formed the session low, all contained within Friday’s range. Recovering back up to the morning’s highs only ranged narrowly through the afternoon between 2180.50-2181.50. A late breakout was too late to be strong-handed sponsorship, but it extended up to 2186.25.
Overnight action’s new info…
Yesterday’s last-minute surge did not extend even a single tick higher, nor has it been rejected. But it has been retraced, although not immediately. A narrow 2-point range holding 2184.00 expanded suddenly to 3 points at Europe’s opens, dipping back down to 2182.75. Recovering back up to 2186.25 was reversed back into the range, and now back down to fresh lows at 2182.25.
If, then…
Tuesday’s lateness of its breakout doesn’t preclude extending higher, even without gapping up. But either scenario is less likely. Less likely, but still possible. However, extending much higher than a morning rally would be unlikely. And reversing back down would be likely. All of which applies to a rally attempt, which is not required, assured, or even likely. Meanwhile, having trended up into Tuesday’s close, gapping down back under Tuesday afternoon’s 2180.50 low could form a session-long decline. The setup would marginalize sellers buyers for the day, and could fill the gap at Thursday’s 2169.00 close down to 2166.00.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2180.50 above would be unlikely to trigger the 2177.75 bias-down signal at 10:15.
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2190.25 | 2189.00 |
| …would target | 2196.75 | 2195.50 |
| Bias-down: under | 2179.00 | 2177.75 |
| …would target | 2173.75 | 2172.50 |
| Signal status: NO-BIAS | 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)
Tuesday afternoon’s narrow ranging between 2180.50-2181.50 finally broke out. But not until the position-squaring window had begun lapsing at 3:52. And it didn’t extend above the noon hour’s 2183.50 high until having come within 3 minutes of the cash session close. Not to mention that the narrow ranging didn’t gain any traction.
None of which precludes extending higher. Or extending higher without first gapping up. But extending higher from this base would be very vulnerable to the same rejection as prior probes of the area above. More so, extending higher without gapping up.
Gapping down deeply enough would be bearish. Having trended up into Tuesday’s close, gapping down Wednesday under Tuesday afternoon’s 2180.50 low could form a session-long decline. While that would marginalize sellers for the day, it could be contained by the gap back down to Thursday’s 2166.00 close.
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… Turning inside, out?
Window opening to get unstuck from Friday’s range.
The afternoon’s 2183.50 bias-up signal was touched during the noon hour, but not triggered. A sell signal at 2180.50 was touched twice during the bias environment, but also not triggered. The narrow range is persisting into the final hour.
Extending beyond either end of the range through the 3:10-3:20 proxy window would be credible for extending. Probing higher would still be vulnerable to slinghotting back down into the range, if not also through it to fresh lows.
Otherwise, today’s price action should remain within Friday range. Regardless, having failed to gain traction in either direction today, trending tomorrow morning would require gapping open beyond either end of today’s range.
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))
Retracing all of Friday’s initial spike up before the weekend, back down to 1.1155, was not itself a new sell signal, and it didn’t prevent Tuesday from surging back up to the spike’s 1.1260 peak. But closing back under 1.1175 is needed to reinstate the downtrend.
Gold Dec Contract (GC, ETF: (GLD))
Gapping up Tuesday to 1336.50 extended sharply higher intraday to 1354.00-1357.00, extending the decline’s bigger detour which had been signaled Thursday by closing above 1312.70-1315.30. But Tuesday’s extension wasn’t necessary, since Friday had closed back under 1329.00. Closing back under 1343.00 would reinstate the 1296.00-1297.00 objective. Closing first above 1362.00 would suggest an even bigger rally underway.
Silver Dec Contract (SI, ETF: (SLV))
Stopping short Friday of filling its gap back up to 19.48 didn’t prevent extending higher during the holiday to gap up to 19.65 and extend through the prior outstanding gap at 19.85, testing 20.20. Friday’s breakout above 19.00 was confirmed already during the holiday, so Tuesday’s extension fulfilled it. Closing back under 19.75 would signal that the bounce had ended.
30-year Treasury Dec Contract (US, ETF: (TLT))
Friday’s reaction to the Employment Situation had filled the gap back down to 168-28, although that wasn’t required. Its reaction up extended Tuesday to test the 170-02 buy signal as resistance. Anything in between continues to be the unpredictable sloppy and choppy ranging.
Crude Oil Oct Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Testing 46.50 during the Labor Day holiday was retraced entirely back into negative territory Tuesady under 44.00. But the 44.20 bounce limit was still being tested into the close, so the decline has no excuse to be delayed.
Natural Gas Oct Contract (NG, ETF: (UNG, UNL))
Friday didn’t confirm Thursday’s break under 2.82, but that didn’t prevent Tuesday from gapping down to test 2.71. This sequence is the first three of a four-session setup. The fourth session would also fail to confirm Tuesday’s break. This is only useful if Wednesday were to gap down or probe lower, which would be likely to recover.