Posts by Rod David
The First Trade… Relative calm.
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…
Thursday’s gap down and extension lower had tested the 2043.00 target down to 2040.75. A corrective bounce to 2049.00 was prepared to retest the lows and potentially form a durable bottom. Satisfied sellers and a little upward momentum were leveraged by tragic news that softened Brexit’s bearish influence. The balance of the session rallied relentlessly to 2071.50. No traction was gained.
Overnight action’s new info…
After initially firming up to 2074.75, price has dipped a little into negative territory at 2065.25. Each end of the overnight range is within 3 ticks of this morning’s bias-up and bias-down signals.
If, then…
Could a retest of 2043.00 today still form a bottom as would have been done by holding its retest yesterday? Probably not without probing even lower first, to compensate for the delay. That effort would meanwhile open the door to resuming the decline. Ending the week at fresh lows is rarely rejected immediately Monday. And this afternoon will be confronted by bearish WedEX influences. Probing fresh highs this morning is possible before reversing down later. The unlikely scenario would extend higher durably.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2070.00 would be unlikely to trigger the 2074.75 bias-up signal at 10:15. Exiting the open under 2063.00 would be likely to trigger the 2065.00 bias-down signal
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2083.00 | 2074.00 |
| …would target | 2089.25 | 2080.50 |
| Bias-down: under | 2073.75 | 2065.00 |
| …would target | 2068.25 | 2059.25 |
| 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)
The decline’s 2043.00 target had been met, and probed to its maximum room for noise down to 2040.75. It was retraced by 61.8% of the post-open slide back up to 2049.00. The balance of the session could have been spent retesting 2043.00 to form a durable bottom, or to extend down.
But simply retracing 61.8% of the opening slide had started tracking another template. Entering the afternoon’s bias environment above the open would open the door to extending well into positive territory.
The recovery extended to 2071.50, 29 points off the low. But it’s not bullish. Extending any higher wouldn’t have made it bullish. The low was not retested during another timing window, and the open’s gap down was not retested from above.
All of which can be done Friday, but not as reliably to hold and form a bottom. Meanwhile, extending higher Friday morning is possible, but not durably (and probably not by gapping up) due to a bearish WedEX.
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… Capitulation, shmapitulation.
Probing higher and higher highs.
Renewing the bias-up signal above its 2058.00 target didn’t prevent initially dipping. But it wasn’t likely to extend, and in fact held an attack on 2055.00. The bias environment ultimately probed higher to attack 2066.00.
The actual bias environment exit was overlapping the noon hour’s 2062.75 highs despite having probed 3 points highs. The final hour’s entry was back under the bias environment’s 2065.75 high despite probing more than 1 point higher. And now the 3:10-3:20 window has avoided extending to fresh highs.
Buyers aren’t gaining traction for today’s effort, they’re simply being fulfilled. None of which is a sell signal. Tomorrow’s open could still extend the rally by gapping up. Otherwise, a retest of 2043.00 remains likely.
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 again Thursday was not necessarily more counter-trend action, since Wednesday’s low had stopped optimistically short of actually filling the gap back to Monday’s close, and then filling the gap back up to Tuesday’s close had neutralized its attraction above. Bouncing intraday offers one more opportunity to bottom, by recovering from a retest of Thursday’s gap down.
Gold Aug Contract (GC, ETF: (GLD))
Wednesday’s post-close reaction to FOMC extended sharply higher overnight to probe the 1312.00 target to attack 1317.00. Its reaction recovered to fresh post-open highs attacking 1319.00. The next reaction down slid to 1293.00, and then lower to 1285.00 after the close. Thursday’s gap up to 1308.60 will need to be retested.
Silver Jul Contract (SI, ETF: (SLV))
Already meeting the 17.60 target before Wednesday’s close, extending higher overnight created more room for a pullback without beginning to signal momentum reversing down. But 17.60 was probed back down to 17.40.
30-year Treasury Sep Contract (US, ETF: (TLT))
Surging at Thursday’s open extended easily through the 170-16 resistance but stopped short of touching the 171-22 target before reversing back down intraday under 170-16.
Crude Oil Jul Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Trending down overnight easily fulfilled the decline’s minimum objective at 47.25 before extending to test 46.15, likely on the way to test “lower prior highs” at 45.40..
Natural Gas Jul Contract (NG, ETF: (UNG, UNL))
Reaction to Thursday’s EIA report was muted, as a lot of buying pressure continues being expended simply to hover at the highs. Extending higher to the 2.70-2.75 target is likely to hold and to reverse down.