Posts by Rod David
The First Trade… All out of gaps?
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…
Tuesday’s session was essentially identical to Monday. Both gapped up to new highs, recovered a post-open dip back up to new highs through the morning, and triggered no-bias through the afternoon. Each also dipped before the close, although Tuesday’s 5-point dip from 2149.00 was shallower and less pessimistic than Monday’s 7-point dip, and stopped short of its 2141.00-2143.00 target area. Meanwhile, the minimum requirement of Friday’s confirmed breakout was fulfilled, for at least a third higher close. And intraday sponsorship once again failed to gain traction for their effort .
Overnight action’s new info…
Tuesday’s late slide extended to touch 2142.00 before midnight. Narrow ranging ended with Europe’s opens, first jumping to 2147.00, and then attacking 2149.00.
If, then…
Closing slightly above the rally’s next higher 2143.00 objective nevertheless put into play even higher objectives, so long as 2143.00 maintains its recovery today. That will be difficult without gapping up above yesterday’s highs, since the rally otherwise won’t likely extend this morning — not after yesterday’s sponsorship failed to gain traction. Yesterday’s highs are being attacked, but not yet probed. It’s not yet too late, and there are still a couple of pre-open catalysts. Not gapping up could still probe higher this morning, but then we would expect the rally to start topping here.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2143.00 would be unlikely to trigger the 2141.00 bias-down signal at 10:15. Exiting the open above 2150.50 would be likely to trigger the 2149.25 bias-up signal.
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2156.00 | 2149.25 |
| …would target | 2161.00 | 2154.25 |
| Bias-down: under | 2147.75 | 2141.00 |
| …would target | 2141.50 | 2134.75 |
| Signal status: NO-BIAS, TESTED BIAS-UP 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)
There was much too much similarity between Monday and Tuesday’s patterns. Similar patterns that appear sequentially tend to resolve differently. But Tuesday was Monday’s doppelganger.
So, it was a second consecutive session for not gaining traction. This time, the afternoon hovered optimistically throughout. Wednesday is vulnerable to the same intraday gyration and resolution as was Tuesday.
Meanwhile, an up/down-crash count has emerged. It’s at least 10 consecutive trending sessions, with 1-2 non-consecutive counter-trend sessions. S&Ps don’t fit the set-up neatly, but NDX and the Dow are there.
Closing above 2143.00 puts into play the next higher objective, which could reach 2168.00. Of course, that’s subject to a second consecutive higher confirming close Wednesday, And the second session of B\limited afternoon volatility isn’t helping.
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… Deja vu, all over again.
Narrow afternoon ranging. Like yesterday.
If similar setups that appear sequentially should resolve differently, then today’s pattern is in for a surprise. Gapping up, recovering a gap down, and afternoon no-bias signals — both yesterday and today — ranged sideways through the afternoon bias environment.
Yesterday resolved down, relatively little. Today should either resolve down a lot, or else resume the rally.
Extending the range into the close is possible. But it’s unlikely since no traction was gained at the bias environment exit or the final hour’s entry.
Regardless, closing above 2143.00 would put into play higher objectives, which we’ll discuss in detail during the post-market Wrap. Closing under 2143.00 would have implications, too, depending on how substantial the margin.
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 up Tuesday to the recent range’s upper-end doesn’t invalidate the likelihood for breaking under the range’s lower-end and retesting the post-Brexit lows. A bigger detour would be suggested by closing above 1.1155.
Gold Aug Contract (GC, ETF: (GLD))
The required retest of Friday’s 1336.30 spike low was fulfilled by Tuesday’s sharp drop to 1331.00. Extending lower to test 1329.00 isn’t necessary before recovering 1348.50 to resume the rally.
Silver Jul Contract (SI, ETF: (SLV))
The 22.15 post-Brexit higher still requires an eventual retest, which remains likely so long as 19.90 holds as support — especially if held while Gold completes its pullback .
30-year Treasury Sep Contract (US, ETF: (TLT))
Gapping down Tuesday to the 174-10/174-24 range’s upper-end didn’t consider it much of a pullback limit, and instead extended below it intraday to test 173-08. It’s still a valid sell signal, although gapping down isn’t a very reliable end to the topping pattern which we’ve been discussing.
Crude Oil Aug Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
There was no bearish reason to gap up Tuesday and probe above 46.00 resistance, whose test Monday morning had been productive already by reacting down to prior lows. Back above 47.75 would suggest a bigger detour underway, but otherwise, closing back under 45.25 would resume the decline. .
Natural Gas Sep Contract (NG, ETF: (UNG, UNL))
Monday’s dip wasn’t rejected overnight, but it wasn’t extended, so the 2.85 buy signal remains unchanged.