Posts by Rod David
Post-open Review… Keep it coming (for now).
Overnight rally extends post-open.
It could have gone either way. It usually goes the other way. Otherwise, it goes this way.
Not every setup has a binary resolution that will trend in one direction, or the other. But often a single-minded, relentless overnight trend will reverse at the open. Not reversing tends instead to extend the trend almost as relentlessly. A third option is very unlikely.
This morning’s choice was to extend.
So, having pulled back already from 2087.50 to 2083.00, post-open action surged through its 2085.25 buy signal to probe a fresh high. And still hovering or extending more than halfway through the opening 15 minutes of volatility, reversing down became very unlikely. Inverting the bearish WedEX was required by noon Friday, so this rally only invalidates it.
Higher highs touched 2092.50, taking RSIs overbought. Reacting down is overlapping a 2087.25 sell signal by a couple of ticks. Back above 2089.50 would resume the rally, next targeting 2094.50.
Extending higher after this morning will be more difficult as Fed Chair Yellen’s Senate testimony tomorrow morning comes into view. Rate hike rhetoric between FOMC meetings suggests the market will be challenged by bearish headlines. That’s a difficult proposition to attract new buyers.
Pre-market Tour (recording & summary)
The 2087.50 overnight high has not extended, but neither has it been rejected. The open is being greeted by strong overnight buying pressures.
That could be a problem for the rally, since relentless, single-minded overnight trending often reverses post-open. A last-minute dip to 2083.00 might allow at least a snap back up to 2088.00. But that’s not required before a bearish WedEX influence emerges.
Not already reversing down through the opening 15 minutes of volatility often extends the overnight trending intraday. But ranging narrowly is not likely.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Correxit?
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…
Gapping down a little Friday to 2068.00 extended down a lot to the morning’s 2053.25 low. The balance of the session “rallied” to 2065.25 in a series of higher highs and higher lows, albeit never leaving negative territory. The last hour dipped a little and then a lot to eventually touch 2057.75. That was still 2 points too high to consider WedEX.fulfilled its bearish signal.
Overnight action’s new info…
Poll results showed the Brexit “remain” support rising sharply. Sunday night’s open gapped up to 2071.00 and extended steadily overnight up to 2087.50. That’s back to last Friday’s close, which last Monday morning had probed only momentarily before extending the prior week’s decline.
If, then…
Has the rally’s corrective phase been exited, or is the overnight rally refueling sellers? The potential rally we discussed this weekend has been triggered by a favorable poll, and not by simply delaying the Brexit vote. Anti-Brexit forces had regained so much ground so quickly, that its sponsors would be foolish to delay the vote. So, the rally gets the best of both worlds. And knows it. Two questions now are whether the rally extends intraday, as the bearish WedEX influence arrives at the open. Trending down from the open should be obvious early, or it won’t be relevant.
First Trade…
[Click here to view the Bias parameters] The bias-up parameters are far below current ranging. However, exiting the open at 9:45 above 2089.25 would be likely to extend higher this morning. Exiting the open under 2079.50 would be likelier to trend back down.
Globex chaRTroom link
The overnight Globex session has opened. Perhaps even better for anti-Brexit forces, polls now show Brexit’s brief single-digit lead has inverted to a substantial lead for remain.
This is not entirely identical to the bullish scenario described during yesterday’s Saturday Review. But it’s similar, and the open has gapped up and extended 9-13 points. A double-thrust remains possible, but not necessarily likely
Monitor overnight action in the chaRTroom, where I’ll be checking in later to add levels if indicated.
Saturday Review’s recording (for 6/18/16) …
First, let me apologize again for the inadvertent sending of 40 emails when the new site design was updating. Its cause is known, so don’t worry about it repeating…
Testing the decline’s target allows a bottom to form. It also allows the decline’s sponsorship to refuel. Which one does Thursday’s bounce represent, and how can we detect the difference and position for it?
This weekend’s Saturday Review addresses those questions and more. Along the way, we apply examples of similar setups to compare and contrast current conditions. Stock requests were reviewed.
The following stock requests were reviewed in this order (the last two are available separately by clicking on them):
GDX, ALB, ECPG, GROW, HTM, AAPL, MERC, POT, PRAA, ABTL, AMZN, BWLD, CACC, EQIX, INTC, POOL, UPS, BBRY, CSCO
06/18/2016 09:31:22 Mark Glezer: gm
06/18/2016 09:31:23 sm: audio good
06/18/2016 09:31:23 David B: Good morning
06/18/2016 09:32:20 Mark Glezer: yep
06/18/2016 09:32:23 David B: yes
06/18/2016 09:32:25 sm: : )
06/18/2016 10:06:08 sm: Sorry to ask this again…why is it that the unified move higher of all three markets would be a bearish indicator in the current context?
06/18/2016 10:09:39 David B: has the market discounted enough should there be a brexit? it does no seem so. would you expect a big rally if no exit?
06/18/2016 10:13:29 sm: Does that move higher need to test the highs…or would a test of the 61.8 rettracement of the downleg be adequate?
06/18/2016 10:16:40 MK: .0005% chance that leave actually wins
06/18/2016 10:16:44 sm: In other words, if the markets display a unified move higher into the 61.8 level, would that be a time for caution, or is a unified test of the highs required to send the bearish message?
06/18/2016 10:16:48 MK: its ridiuclous that this keeps happening
06/18/2016 10:17:08 MK: short gold
06/18/2016 10:17:13 MK: i think is the trade over long markets
06/18/2016 10:17:17 MK: if remain wins
06/18/2016 10:18:15 MK: yes rounding up
06/18/2016 10:18:21 MK: Exactly
06/18/2016 10:20:35 sm: Answer has been muddled
06/18/2016 10:20:56 MK: Long List
06/18/2016 10:21:01 MK: ALB
06/18/2016 10:21:06 MK: ECPG
06/18/2016 10:21:08 MK: GROW
06/18/2016 10:21:11 MK: HTM
06/18/2016 10:21:12 MK: MERC
06/18/2016 10:21:19 MK: POT
06/18/2016 10:21:20 MK: PRAA
06/18/2016 10:21:24 MK: Short List
06/18/2016 10:21:29 MK: ABTL
06/18/2016 10:21:30 MK: AMZN
06/18/2016 10:21:32 MK: BWLD
06/18/2016 10:21:36 MK: CACC
06/18/2016 10:21:41 MK: EQIX
06/18/2016 10:21:43 MK: INTC
06/18/2016 10:21:45 MK: POOL
06/18/2016 10:21:50 MK: UPS
06/18/2016 10:26:03 MK: =)
06/18/2016 10:27:57 MK: if it gets to 94 its going to 100 no?
06/18/2016 10:29:59 MK: so i’ll stop out on aclose under 22.50
06/18/2016 10:38:18 MK: OH can you do Bitcoin
06/18/2016 10:38:45 MK: bought a bunch at 450
06/18/2016 10:38:54 MK: already banked my principal
06/18/2016 10:39:10 MK: yes
06/18/2016 10:40:10 MK: ha
06/18/2016 10:50:15 MK: Autos
06/18/2016 10:52:33 MK: You talked me out of it in late march
06/18/2016 10:52:44 MK: selling it
06/18/2016 10:52:54 MK: i’m inclined to ignore your advice now =)
06/18/2016 10:54:23 MK: what is the 161.8
06/18/2016 10:54:32 MK: thanks
06/18/2016 10:54:53 MK: meh ignore INTC
06/18/2016 10:54:57 MK: thats a boring chart
06/18/2016 11:00:49 MK: have a good one
06/18/2016 11:00:57 David B: thanks
06/18/2016 11:01:01 MK: i missed the general market tour
06/18/2016 11:01:05 MK: i’ll watch recording
06/18/2016 11:01:10 MK: and ask questions on monday
06/18/2016 11:01:40 Josey: Ty