Posts by Rod David
The First Trade… Calm before another storm?
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…
After rallying throughout the morning from 2169.00 at Monday’s open, the afternoon was contained by its 2182.00 bias-up signal. Not actually probing it — not stretching the rubber band tightly — avoided a steep reaction back down. But there was a modest reaction which eventually extended down to 2178.25. No traction was gained
Overnight action’s new info…
The downward slope of last night’s shallow 4-point range differs from the prior two narrow overnight sessions that had ranged sideways. Not that much downside was covered after firming to attack 2181.00. Extending yesterday’s late-afternoon slide has tested 2177.00 as support.
If, then…
Resuming Monday morning’s rally requires gapping up Tuesday above Monday’s 2182.00 high. That’s not currently indicated, nor is it being attempted, but it’s not too far away. And the two prior narrow overnight ranges began trending immediately at the open. Extending Monday’s late afternoon reaction down would not be required to probe under Monday’s intraday range. But their retest would be likely to break lower.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2177.00 would be unlikely to trigger this morning’s 2174.25 bias-down signal at 10:15. Exiting the open under 2171.50 would be likely to trigger bias-down.
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2184.50 | 2182.75 |
| …would target | 2189.50 | 2188.00 |
| Bias-down: under | 2175.75 | 2174.25 |
| …would target | 2169.75 | 2168.00 |
| Signal status: noN-BIAS, TESTED BIAS-DOWN SIGNAL | 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)
Today’s market Wrap was held one hour early at 3:03 PM ET…
Monday afternoon’s 2182.00 bias-up signal was finally touched, but too late for its resistance to crumble. Not actually probing it — not stretching the rubber band tightly — avoided reversing the trend back down. Its reaction did test the noon hour’s 2179.25 low and bounce back into the afternoon range. The last half-hour was greeted by a slightly deeper test that fluctuated widely around the noon hour low.
No traction had been gained by the afternoon timing windows. So, resuming the morning’s rally requires gapping up Tuesday above Monday’s 2182.00 high. Extending down overnight need not resume last week’s decline, but retesting last week’s lows would likely break lower. Monday’s bounce was not the product of accumulation. It was only follow-through from Friday’s oversold test of support from filling the three-week old gap back down to 2160.00.
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))
Gapping down Monday to close under support qualifies as a breakout, not confirmation of Friday’s intraday reversal that had also contained a fresh relative high. A second consecutive lower close Tuesday would confirm a new downleg underway, likely targeting fresh lows.
Gold Aug Contract (GC, ETF: (GLD))
Recovering from a fresh low testing 1317.00 before Monday’s open didn’t change that Wednesday’s confirmed breakout requires at least an eventual third lower close. The leg itself is likely targeting 1296.00-1297.00.
Silver Sep Contract (SI, ETF: (SLV))
Wednesday’s confirmed breakout requires at least an eventual third lower close, helping to absorb Monday’s initial strength and keep alive the decline’s momentum. Its 17.35 target was attacked to within 2 cents overnight before bouncing through Monday morning, which may have robbed the decline of near-term momentum.
30-year Treasury Sep Contract (US, ETF: (TLT))
Friday’s close under the prior week’s lows was followed by gapping up Monday back above the prior week’s lows. Extending higher through the noon hour probed above 171-22, and closing above it could invalidate the break. But 172-15 must be recovered through the close to avoid fresh lows under 169-30.
Crude Oil Oct Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Gapping down Monday helps to confirm 48.35 resistance held its test on Friday. But closing under 46.60 is still needed to signal momentum extending down.
Natural Gas Sep Contract (NG, ETF: (UNG, UNL))
Gapping down Monday comes from a position of strength, after Friday’s unnecessary higher close. Gapping down, even slightly, creates new “unfinished business above” back up to Friday’s close, which can at least impede attempts to reverse down. But closing under 2.84 would likely test 2.78, whose break would trigger a deeper detour down.
Mid-day Update… There’s a fork in this road. Take it.
SPECIAL NOTE: MARKET WRAP WILL BEGIN ONE HOUR EARLY AT 3:03 PM ET.
This morning’s noN-bias environment was almost followed this afternoon by another. But the 2182.00 bias-up signal was not probed in time to trigger, touched in time to invoke the grace period, or exceeded in time to invalidate its signal.
This is a no-bias environment, and 2182.00 should define the range’s upper-end. Until the bias environment begins lapsing at 2:30, or at least comes within view.
Probing above 2182.00 prematurely would be “no-bias trending” that is doomed to failure. Probing higher after 2:15 would be free to extend higher, aggressively, targeting 2187.00-2188.00.
Back under 2179.75 would start to signal the rally potential had failed. A higher sell signal would become calculable after probing fresh highs. Regardless, triggering a sell signal could easily target 2171.50, but not so easily target fresh post open lows.