Posts by Rod David
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2180.75 | 2178.75 |
| …would target | 2186.25 | 2184.25 |
| Bias-down: under | 2173.50 | 2171.50 |
| …would target | 2168.25 | 2166.25 |
| Signal status: LATE NO-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)
Wednesday’s last-minute 7-point bounce peaked 1 point short of 2177.00. Its recovery would have kept alive potential for the drop from Tuesday morning’s high to have been only a correction, prior to resuming the rally. Closing under 2177.00 instead suggests the drop has been the beginning of the end, completing the massive topping pattern we’ve been monitoring.
Having failed to close back above 2177.00, recovery potential can be reinstated by gapping back up above the 2180.50-2181.25 area. That wouldn’t ensure new highs, and would remain vulnerable to attempting another downleg. Wednesday’s attempt at a new downleg is still subject to confirmation from a second consecutive lower close.
The Schrödinger’s cat setup.
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… Paradigm shift.
Target met. Timing window lapsed. Direction down.
This morning’s 2177.00 bias-down target was met at the afternoon bias environment’s low. Its consolidation just broke lower, after entering the final hour.
Entering the final hour under 2177.00 would have been more clearly bearish. Despite probing it now down to 2173.75, it can recover. And closing back above it could launch a rally to new highs. Closing under 2177.00 — and under 2170.75 if touched — would launch a sizable new downleg.
The bias environment was exited under the noon hour’s low, but the final hour’s entry wasn’t lower, so traction isn’t assured. Bouncing into the close cannot be discounted.
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 Wednesday under the 1.1295 sell signal now needs a second consecutive lower close on Thursday under 1.1255 to confirm the corrective bounce has ended. Closing under 1.1170 would signal new lows in-play.
Gold Aug Contract (GC, ETF: (GLD))
Wednesday’s gap down to recent lows plunged sharply lower to fulfill the 1329.00-1332.00 target. Closing back above 1336.50 would signal the break was false, likely at least to fill the gap back up to Tuesday’s 1345.00 close. Closing under 1329.00 would instead target 1296.00-1297.00.
Silver Sep Contract (SI, ETF: (SLV))
Tuesday’s shallow bounce was reversed early Tuesday to test the 18.75-18.85 target area’s lower-end. Its break puts into play 18.35, which was tested Wednesday down to 18.55.
30-year Treasury Sep Contract (US, ETF: (TLT))
Wednesday morning’s dip attacked the 171-22 sell signal to within 6 ticks before bouncing back above the 172-16 buy signal. Closing above it would be credible for launching a recovery.
Crude Oil Oct Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Tuesday’s bounce up to 48.00 resistance reacted Wednesday by gapping back down to 47.45 and extending to Tuesday morning’s 46.60 low. Closing any lower would reinstate the reversal..
Natural Gas Sep Contract (NG, ETF: (UNG, UNL))
Tuesday’s break above 2.70 extended higher Wednesday’s to test 2.82. The second consecutive higher close confirms the breakout, now requiring at least an eventual third higher close.
Mid-day Update… Fork in the road.
REMINDER: I will be away from the screens on the afternoons of both Thursday and Friday, this week and next, Thank you for allowing me to be of personal assistance in a family matter.
This morning’s 2177.00 bias-down target became “unfinished business below” that will require being tested intraday. Not necessarily today. Reacting up 5 points from 2178.25 through the noon hour has dipped back down to 2180.50.
This being a no-bias environment, its 2177.00-2185.75 bias signals should try to contain trending if tested. Meanwhile, either signal can be tested, which would be triggered back under 2180.50 or back above 2182.25.
Trending after the bias environment lapses should either reject this morning’s drop, or else extend it. Bouncing into the close wouldn’t necessarily prevent another drop tomorrow. But dropping into the close would be likely to extend.