Posts by Rod David
The First Trade… Another narrow overnight range.
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…
A third consecutive narrow overnight range greeted Tuesday’s open, which once again resolved in immediate range expansion. Sliding through the morning touched the 2171.50 pullback limit, which was probed by 3 points into the afternoon bias environment’s exit. Although possible, collapsing was avoided by bouncing into the close, back up to the noon hour’s high. But no higher, which would have rejected the afternoon’s probe lower.
Overnight action’s new info…
Fourth time’s a charm? Yesterday’s late afternoon bounce has not extended a single tick. And another range narrower than 4 points has been fluctuating around unchanged.
If, then…
Tuesday afternoon’s low was similar to Friday afternoon’s low also being vulnerable to collapse.. Friday’s late bounce at least probed its noon hour high, and then probed higher overnight, enabling Monday morning’s rally. Last night’s ranging doesn’t reflect such eager buyers. Neither does it reflect eager sellers. Not gapping open either way this morning may leave unanswered whether yesterday’s reaction down has resumed last week’s decline, or if Friday’s bounce is going to extend higher first. But immediate range expansion would suggest at least one or the other will be attempted.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2170.00 would be likely to trigger the 2171.50 bias-down signal at 10:15. Exiting the open above 2177.00 would be unlikely to trigger bias-down. Exiting the open above 2182.00 would be likely to trigger the 2180.50 bias-up signal at 10:15.
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2182.00 | 2180.50 |
| …would target | 2189.50 | 2188.00 |
| Bias-down: under | 2173.00 | 2171.50 |
| …would target | 2167.50 | 2166.00 |
| Signal status: LATE BIAS-DOWN | 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’s slide into the afternoon’s bias environment exit could have collapsed from there. Touching the 2171.50 pullback limit had already produced a bounce during the morning. And the cusp between timing windows allowed new sponsorship to gain traction.
But new sponsorship did not arrive, and the market bounced into the close. The setup was similar to Friday afternoon’s low. Which makes sense, since the market is still trading off of that setup. The bounce into Monday’s high was its extension. The question now is whether the reaction down into Tuesday’s lows is about to accelerate into a new downleg, or else resume extending late Friday’s bounce.
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… Jumping on eggshells.
Probing fresh lows but not yet extending.
The 2107.75 bias-down signal had held as support until the bias environment came within view of lapsing. Breaking lower to 2168.50 had an opportunity to extend down. But it has reacted back up to 2171.50 resistance.
Resuming the slide should become a collapse, targeting a retest of Friday’s 2157.50 low and lower to 2141.50. Not exploiting the opportunity isn’t necessarily bullish, but recovering 2173.00 could launch another recovery leg targeting 2188.00.
Whether breaking lower or recovering, Friday afternoon’s low remains influential. The interim reaction up has been only a temporary correction. The correction can still extend, but breaking any lower here would target fresh lows.
This afternoon’s bias environment was exited under the noon hour’s low, but the final hour wasn’t entered lower. Trending down to fresh lows through the 3:10-3:20 proxy window (now opening) would signal that sellers were gaining traction.
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))
Gapping down Tuesday under the 1.1175 sell signal that had held a test Monday is also confirmation to the ongoing break that was triggered under 1.1295 and targeting 1.0870-1.0980.
Gold Aug Contract (GC, ETF: (GLD))
Gapping down and trending down intraday fulfilled the outstanding requirement for at least a third lower close, but it didn’t create a bottom that would otherwise suggest the 1296.00-1297.00 target doesn’t remain in-play.
Silver Sep Contract (SI, ETF: (SLV))
Gapping up slightly Tuesday, and spending the entire session in positive territory without extending higher is “ineffectual pessimism,” which suggest the decline’s momentum remains intact. Anyway, at least an eventual third lower close remains outstanding, including a more thorough touch of the decline’s 18.35 target so long as 18.85 isn’t recovered.
30-year Treasury Sep Contract (US, ETF: (TLT))
Closing above 171-22 Monday was of course followed immediately by gapping down Tuesday back under 171-22. Not substantially, and not with any predictive value. But the range continues to behave erratically.
Crude Oil Oct Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Gapping down a little Tuesday eventually extended down to touch 46.60 support, but didn’t yet break under to trigger a new downleg.
Natural Gas Oct Contract (NG, ETF: (UNG, UNL))
Rolling coverage forward to Oct, trading at a 3-cent premium to Sep… Despite having held the 2.88 pullback limit Monday, a deeper pullback Tuesday tested the 2.82 sell signal whose break would suggest a substantial detour from producing the required higher close that remains outstanding.