Posts by Rod David
The First Trade… Shifting gears.
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…
Sunday night’s rally and Monday morning’s surge did their best to portray a “Game On” message. But it was “game over” as the surge peaked at the 2189.50 bias-up target before the morning bias environment’s exit. Ranging narrowly through the balance of the bias environment persisted through the noon hour and the afternoon bias environment. The final hour suddenly slipped 3 points to end the cash session at 2187.00, just above the opening range.
Overnight action’s new info…
Monday’s late dip extended down to greet the Globex open at 2186.00. That didn’t stop the decline, which extended down to 2183.00. Europe’s opens triggered a quick 2-point slide to 2181.00. Consolidating there for two hours suddenly spiked up to 2186.00. That has been retraced almost entirely.
If, then…
Yesterday’s 2184.75 opening gap overlapped prior highs, so it’s retest from below isn’t required. Yesterday’s 2187.00 close might require being retested eventually if today’s open were to create a gap. Filling the gap back down to Friday’s 2180.00 close without extending down would help the attraction above. But not assure it, as gaps outstanding below at 2172.00 and 2160.00 would be in-play. Meanwhile, in case today’s open gaps down, filling the gap back up to yesterday’s close has no assurance — and even less reason — to resume the rally. So, in every case, the burden of proof is on buyers.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2186.25 would be unlikely to trigger the 2190.00 bias-up signal at 10:15. Exiting the open under 2183.25 would likely at least to test the 2181.25 bias-down signal by 10:15. Exiting the open under 2179.00 would be likely to trigger bias-down.
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2193.00 | 2190.00 |
| …would target | 2198.50 | 2195.50 |
| Bias-down: under | 2184.25 | 2181.25 |
| …would target | 2177.25 | 2174.25 |
| 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)
Sunday night’s rally and Monday morning’s surge peaked before the morning bias environment’s exit. That’s not unusual, and hardly noteworthy. Except that price action suddenly flat-lined. The noon hour held the narrow range that had entered it, as did the afternoon bias environment.
I was away from screens for much of Monday’s final hour. But we held a pre-close “Wrap” one hour before the close.
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))
Monday’s firm open didn’t improve very much, which doesn’t suggest that testing 1.1175 support is yet done, and that it’s break remains possible.
Gold Aug Contract (GC, ETF: (GLD))
Firming Monday tested the decline’s 1348.00 bounce limit, which should hold as resistance to maintain this leg’s 1332.00 objective.
Silver Sep Contract (SI, ETF: (SLV))
Gapping up was reversed into negative territory only momentarily. But recovering from negative territory must be exploited by extending higher, or else at least a temporary probe lower remains likely.
30-year Treasury Sep Contract (US, ETF: (TLT))
Gapping down and sliding again Monday may have been bullish, having filled the gap back down to Thursday’s 121-29 close. And the drop originated from a position of strength, having closed Friday back above 172-26 and overlapping 173-04. But there should be little if any further delay to rallying, let alone backing-and-filling, to avoid a deeper downleg.
Crude Oil Sep Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Friday’s break above 43.35 extended higher Monday to attack 46.00. Closing higher is a second consecutive confirming close, requiring an eventual third higher close..
Natural Gas Sep Contract (NG, ETF: (UNG, UNL))
Briefly piercing above Friday’s range didn’t extend higher Monday. But it also didn’t immediately react bearishly to Friday’s “ineffectual optimism.” Further initial strength Tuesday would be likely to trend higher intraday.
Mid-day Update… And a reminder.
I WILL BE AWAY FROM SCREENS ALMOST ALL OF THE FINAL HOUR TODAY. MARKET WRAP WILL BEGIN EARLY AT 3:00 PM ET.
Gapping up to prior highs and extending higher through the open has not extended higher. Neither has it reversed down, not even as a corrective pullback.
Rather, the first hour’s test of its 2189.50 bias-up target began more than a 3-hour range around it. And it’s narrow, not even 2 points high.
Is it a bullish Flag continuation pattern? It’s possible, since it is forming entirely above all prior highs. The duration of its narrowness is disproportionate to the rally into it, so its first break higher would be suspicious until exceeding 2191.50, and its own 3-minute high.
Back under 2188.25 could target 2183.50 and then much lower. Of course, there’s no requirement to resolve today either way — but a 2-point range probably won’t persist.