Posts by Rod David
The First Trade… Not going gently.
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 morning’s 10-point rally to 2118.00 was doomed to failure for having originated after Monday’s rally gained no traction for its efforts. The second consecutive close at or under 2110.75 prevented putting into play higher objectives than 2116.00-2119.00, which held its test. The overnight “new Globex trend extreme” and morning’s bias-up target also held their tests.
Overnight action’s new info…
Tuesday afternoon’s reaction down extended until probing more than 1 point back under Monday’s 2108.00 close, touching what is this morning’s 2106.50 bias-down signal. Firming since then has recovered to attack 2114.00.
If, then…
All outstanding objectives are met, buying pressure is being satisfied as quickly as its targets are triggered, and no higher targets are being put into play. But sellers haven’t yet retaken control, perhaps the one thing the rally has left going for it. Still, reasserting itself too early would create the same trap as yesterday, since the rally once again failed to gain traction for its efforts.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2111.50 would be unlikely to trigger the 2114.75 bias-up signal at 10:15. Exiting the open above 2116.00 would be likely to trigger bias-up.
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2116.25 | 2114.75 |
| …would target | 2121.75 | 2120.25 |
| Bias-down: under | 2108.00 | 2106.50 |
| …would target | 2103.00 | 2101.50 |
| Signal status: LATE 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)
Not bullish. The rally’s next higher objective at 2110.75 was tested Monday but held through the close. That prevented putting into play the next higher objective at 2116.00-2119.00. Tuesday’s close at or under 2110.75 marked the second consecutive session to hold its test. Also not bullish.
Extending higher this morning wasn’t likely because yesterday’s rally gained no traction. Not a solid base for probing into the next higher objective’s 2116.00-2119.00 range. And 2110.75 once again held through the close. Once again, no higher objective was put into play, AFTER fulfilling more upside objectives. Becoming bearish.
The long, long, long-standing objective to retest last Fall’s SPX 2013.50 high — which equates currently to 2016.00 — was neutralized. That was also the overnight “new Globex trend extreme” and it was neutralized quickly the same day. Satisfying buying pressure as fast as it forms doesn’t attract new sponsorship.
Reversing this sort of a setup can unfold quickly, so beware. Not already reversing down sharply Tuesday makes me suspect that a Wreversal Wednesday lies ahead. But only closing above 2119.00 would begin to neutralize the bearish factors listed above.
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… Slow-motion slide.
Gradually reacting down from the highs.
This afternoon’s noN-bias signal didn’t enhance volatility. But the bias environment has lapsed, without maintaining a probe above the noon hour’s 2117.25 high.
The final hour’s entry was piercing the bias environment’s 2115.25 low. And now the 3:10-3:20 timing window is trending to fresh afternoon lows at 2113.50. Sellers are gaining traction. After fulfilling and holding tests of any upside attractions. By a premature rally that had originated from an unstable base.
That last item’s consequence should probe negative territory. That’s another 5-6 points lower. And usually that’s just the beginning. Closing above the bias environment’s 2117.00 high might be the only remaining possible bullish signal.
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 slightly Tuesday ranged narrowly within the prior two sessions’ range. The confirmed breakout requires at least an eventual third higher close, which is in-play so long as 1.1310 holds as support.
Gold Aug Contract (GC, ETF: (GLD))
Monday’s second consecutive higher close above Friday’s surge was not optimal confirmation since all of the session’s legs overlapped Friday’s highs. But gapping down Tuesday bounced upon attacking the 1236.50 pullback limit, filling the gap back up to Monday’s 1247.00 close. Now 1236.50 becomes a sell signal.
Silver Jul Contract (SI, ETF: (SLV))
Gapping back down Tuesday was recovered to attack Monday’s test of 16.50 resistance. Last week’s Island Reversal pattern must still be retested at the lows. Closing first above 16.60 would signal a bigger rally underway first.
30-year Treasury Sep Contract (US, ETF: (TLT))
Monday night’s pullback came within 4 of ticks of the 165-16 pullback limit before rallying Tuesday morning to attack Friday morning’s 166-22 high. Retesting the 167-00 high is likely before a durable decline begins, but closing under 165-16 would signal a downleg underway already.
Crude Oil Jul Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Gapping up Tuesday on news once again ignored the bigger distributive pattern forming that had held three consecutive tests of its 49.00 sell signal. It also ignored Monday’s “ineffectual optimism.” Not already reversing down Tuesday evening or at Wednesday’s open would be likely to test a fresh high at 51.45.
Natural Gas Jul Contract (NG, ETF: (UNG, UNL))
The fourth session of a 4-day alternating setup Tuesday was unlikely to maintain its probe of fresh highs. Beginning the session by gapping down would form a “pivot reversal” setup after rejecting fresh highs, although closing action was still overlapping Monday’s close.