Posts by Rod David
The First Trade… A broken string.
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)
REMINDER: I am away from the screens today after 2:00 pm ET, and tomorrow after noon.
Through the prior close…
Wednesday’s noon hour test of 2160.00 support produced an obligatory bounce. Like late-Friday’s bounce from testing 2160.00, strong-handed sellers never regained control intraday. Once again, the bounce’s 2170.75-2171.50 target area was fulfilled. Buyers did not gain traction for the effort, but sellers missed the opportunity for breaking support on Wednesday before a three-day holiday. “Unfinished business below” was left outstanding at 2156.50.
Overnight action’s new info…
The consequence of Wednesday’s missed opportunity seems already to be developing. Rallying ahead of Europe’s opens then surged to test 2177.00. Its reaction down touched 2171.50 and has tried bouncing again.
If, then…
Gapping down under Wednesday afternoon’s last relative low of 2163.50 would have started to reject the recovery attempt. Today’s econ calendar is one of the busiest ever, with plenty of influential catalysts. That’s not currently indicated, although formidable at resistance 2177.00 is intact. But having failed to gain traction yesterday afternoon, gapping up above yesterday’s highs is the only credible start to extending higher this morning.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2177.00 would be likely to trigger the 2173.00 bias-up signal at 10:15. Exiting the open under 2170.75 would be unlikely to trigger bias-up.
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2174.00 | 2173.00 |
| …would target | 2179.50 | 2178.50 |
| Bias-down: under | 2165.50 | 2164.50 |
| …would target | 2159.75 | 2158.75 |
| Signal status: NO-BIAS INVALIDATED | 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)
Wednesday’s noon hour test of 2160.00 support produced an obligatory bounce. Like late-Friday’s bounce from testing 2160.00, strong-handed sellers never regained control. Both bounces targeted the same 2170.75-2171.50 area, which both fulfilled.
But Wednesday’s bounce accomplished nothing toward reversing the trend up. It didn’t gain traction or reverse the trend up, and holding a test of resistance only neutralized the attraction above. Meanwhile, the afternoon’s 2156.50 outstanding bias-down target became “unfinished business below.”
Wednesday’s bounce did potentially marginalize sellers through the holiday. Not already breaking lower this far before a three-day weekend suggests that a break lower is at least delayed. To be sure, recovering from a probe under Friday’s low would have been optimal. And gapping down Thursday could serve by proxy to resume the decline. Otherwise, gravitating back up into the weekend is possible before resuming the decline.
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… Hope springs.
Support bounce gets carried away.
RSIs improved into the noon hour’s test and retest of 2160.00. Its test Friday afternoon had ended a multi-session decline, and launched a substantial corrective bounce. Its retest is vulnerable to extending down, and likely to extend down eventually.
Not today, apparently.
Exiting the bias environment above the noon hour high probing 2166.00 was not confirmed at the final hour entry. The 3:10-3:20 proxy window had probed fresh session highs up to 2169.00, but the bias environment high was still being overlapped at 3:20. No upside traction.
None of which prevents extending higher, anyway. A sell signal at 2163.50 was only touched, expending all available weak-handed selling pressure. Buy signals were triggered, targeting the 2170.75-2171.50 area. It’s being attacked now to within 1 tick, while RSIs diverge negatively.
Presumably, this is not a recovery, but a corrective bounce. And the decline remains vulnerable to resuming without delay, if not likely.
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))
Wednesday’s shallow gap down bounced quickly back into Tuesday’s range, and soon tested the 1.1175 sell signal that Tuesday had broken under. Holding it as resistance didn’t undermine the break’s momentum, still targeting fresh lows.
Gold Dec Contract (GC, ETF: (GLD))
Sliding sharply again Wednesday to 1307.00 keeps alive the decline’s momentum and its 1296.00-1297.00 target, which is in-play so long as bounces were to hold 1316.00 as ressitance.
Silver Dec Contract (SI, ETF: (SLV))
Avoiding a probe of lower lows Wednesday without reversing up doesn’t negate the outstanding requirement for at least an eventual third lower close. Holding up while Gold slides sharply may find heavy rotation into Gold when its downside target is met, which would enable Silver to retest Sunday night’s low.
30-year Treasury Dec Contract (US, ETF: (TLT))
Rolling coverage forward to Dec, at about a 1-14 discount to Sep… Wednesday’s choppy, sloppy ranging at least ranged more narrowly, just around Tuesday’s range, but still short of its 171-02 buy signal.
Crude Oil Oct Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Two days of ineffectual optimism that had tried avoiding a break under 46.60 were greeted by Wednesday’s gap down that extended sharply lower in reaction to EIA. The pattern next targets 41.45 on a second consecutive lower close Thursday.
Natural Gas Oct Contract (NG, ETF: (UNG, UNL))
Tuesday’s test of the 2.82 sell signal was already suspicious. Wednesday’s immediate bounce back up to what had been the 2.88 pullback limit would confirm by closing above it, which would greet Thursday’s EIA from a position of strength.