Posts by Rod David
The First Trade… Awaiting the number.
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 was the second consecutive session that overnight weakness extended to fresh lows through the open, only to reverse back up for the balance of the day. The open’s dip recovered from 2086.75 up to a last-minute touch of 2104.00. That fulfilled the required retest of Sunday night’s 2103.75 new Globex trend extreme. Tuesday’s 2100.00 gap up was retested, and still being overlapped into the close. The bias environment was exited above the noon hour’s high, but never got confirmation that the rally had gained traction for its effort.
Overnight action’s new info…
Volatility is often dormant ahead of the monthly Employment Situation report. Last night was no exception. An early blip-up made fresh highs up to 2105.00 (not qualifying as a new trend extreme), but price action since has ranged sideways. A touch of 2101.75 bounced back up temporarily to 2104.75. Its complete retracement has also bounced back, now touching 2105.00.
If, then…
Yesterday’s cash and futures sessions closes were above all prior intraday highs. But their structures were still overlapping the prior highs. The new high close isn’t necessarily disqualified from being a breakout, but it is in need of confirmation from a second consecutive higher close. Meanwhile, gapping up would be vulnerable to reversing down intraday, mostly through the open. Even trending up through the morning would be vulnerable to a late-afternoon reversal. Gapping down would be more vulnerable to extending down through the morning… NOTE: There is no Saturday Review this weekend, so post-market Wrap will be extended to discuss the bigger picture.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2106.25 would be likely to trigger the 2103.00 bias-up signal at 10:15. Exiting the open above 2111.00 would be likely also to exceed the 2109.50 bias-up target at 10:15 and renew the bias-up signal. Exiting the open under 2100.75 wold be unlikely to trigger bias-up.
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2105.00 | 2103.00 |
| …would target | 2111.50 | 2109.50 |
| Bias-down: under | 2097.50 | 2095.50 |
| …would target | 2090.00 | 2088.00 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET EXCEEDED | 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)
Patterns often are counter-intuitive. Hovering at 2101.00 through Thursday’s bias environment’s exit, instead of trending up, still reflected optimism. Extending up to 2102.25 into the final half-hour reflected pessimism for being only slightly higher.
But the multi-session pattern has recovered from its opening dip back up to its midweek low. And only back up to its opening dip. That’s restrained optimism, which keeps alive potential for reacting favorably to Friday’s pre-open Employment Situation report.
A next-to-last minute dip to 2099.25 reflected more pessimism, “ineffectual pessimism” whose reaction down held above prior lows. That potential pent-up buying pressure was already spent by a last-minute surge up to 2104.00. and that neutralized the outstanding Globex trend extreme’s attraction. None of which prevents a negative resolution or negative knee-jerk reaction to the news. but all of which suggests a bullish resolution from a contrary perspective.
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… One more wall of worry.
Fresh highs meeting resistance of pre-payrolls anxiousness.
Optimism ahead of tomorrow morning’s Employment Situation report has enabled today’s post-open recovery. Extending from its 2086.75 low up to 2101.25 is producing the first retest of Tuesday’s 2100.00 gap up.
Being a gap up above all prior intraday highs, filling it was required. Sunday night’s 2103.75 new Globex trend extreme requires an intraday retest, too. But its outstanding attraction can’t prevent the filled gap’s resistance from triggering a little more backing-and-filling.
Probing fresh highs now allows a little more backing-and-filling without being bearish. This new element to the chart structure can cut both ways — optimism ahead of tomorrow morning’s report can now turn to anxiousness that inhibits extending any higher today. A pullback has room down to 2095.00 before suggesting anything more durable underway.
Otherwise, regardless of when the rally extends, its next higher objective above 2103.75 is 2016.00-2018.00. Today’s post-market Wrap will discuss the possible outcomes to trying to trend higher into the weekend.
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))
ECB’s policy statement Thursday triggered volatility that probed back above the 1.1205 bounce limit. Closing above it would launch a sizable rally, even if only a correction. Meanwhile, Sunday night’s low can still be retested down to 1.1055.
Gold Aug Contract (GC, ETF: (GLD))
Despite originating from a slightly higher low that retested Tuesday’s 1210.50 low, the bounce into Thursday’s open failed to violate the ongoing downtrend of lower highs. If Wednesday’s high doesn’t hold as resistance, then the bounce has additional room up to 1220.00 before no longer being likely to retest Sunday night’s low into the 1190‘s.
Silver Jul Contract (SI, ETF: (SLV))
Gravitating back up to the 16.00 attraction Thursday helped to solidify the congestion there and up to 16.15 that should continue to prevent a new durable downleg from beginning.
30-year Treasury Sep Contract (US, ETF: (TLT))
Retracing much of Wednesday’s intraday rally didn’t matter since its 163-05 buy signal remained triggered, which was proved by extending sharply higher Thursday. Greeting Friday’s Employment Situation report from th position of strength of a confirmed breakout doesn’t prevent an initially negative knee-jerk reaction down, but it does make a reaction down likely to be only temporary before extending to fresh highs targeting 166-12.
Crude Oil Jul Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Wednesday’s recovery back up to its 49.00 sell signal after gapping down under it was essentially repeated Thursday amid heavy focus on OPEC meeting. The gap down was relatively higher, as was the reaction back up to 49.00. Still, negating the capitulative topping pattern all but requires almost literally exploding higher without much further delay.
Natural Gas Jul Contract (NG, ETF: (UNG, UNL))
Greeting Thursday’s EIA report from the position of strength of a confirmed breakout could have reacted down momentarily anyway, but didn’t. Extending higher without delay has already produced the eventual third higher close required by the confirmed breakout. This setup has no unfinished business above, so a durable rally is very dependent upon extending higher Friday, too.