Posts by Rod David
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2101.75 | 2099.75 |
| …would target | 2109.00 | 2107.00 |
| Bias-down: under | 2092.75 | 2090.75 |
| …would target | 2086.25 | 2084.25 |
| Signal status: noN-BIAS, TESTED BIAS-DOWN 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.
The First Trade… Still biting at the apple.
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…
Not gapping up Wednesday had precluded the rally from trending up above the prior day’s range. Greeting the open at the prior day’s lows created a lot of room for rallying within its range. First, probing under the prior day’s lows had to be recovered. But positive territory had been recovered well before the afternoon’s Beige Book news, whose knee-jerk reaction down also resolved up. The prior day’s range was maintained, and the intraday rally didn’t gain traction for its efforts.
Overnight action’s new info…
Blipping up from the 2097.00 was reversed down 7 points through midnight to attack 2091.00. Already firming into Europe’s opens, now 2097.00 has been recovered.
If, then…
Wednesday’s intraday rally was limited because Tuesday’s late rally had not gained traction. Wednesday’s rally was able to develop because of the room created by gapping down. Thursday would be able to rally above Wednesday’s range by gapping up above it. Today’s ECB event (with Mario Draghi press conference) and OPEC meeting offer plenty of catalyst for gapping either up, or down. The upside potential remains unchanged at 2016.00-2018.00, while downside potential would face tough support at Tuesday and Wednesday’s lows.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2089.50 would be likely to trigger the 2090.75 bias-down signal at 10:15. Exiting the open above 2095.00 would be unlikely to trigger bias-down. Exiting the open at 10:15 above 2102.00 would be likely to trigger the 2099.75 bias-up signal at 10:15.
Post-market Wrap (summary, no recording)
Extending the rally Wednesday without delay had required gapping up, since Tuesday afternoon’s rally didn’t gain traction for its effort. The overnight drop foreclosed on that possibility, at best delaying it until late-afternoon.
A bigger rally could have followed a test of the morning’s bias-down target instead of just attacking it to within 3 ticks, and by triggering the morning’s no-bias signal instead of noN-bias. So, from the perspective of reverse-engineering, perhaps the traction handicap correctly prevented that.
So, rallying soon after the opening dip extended higher into the close, but remained under Tuesday’s highs. There is no bullish reason for any further backing-and-filling, let alone for any further delay to rallying aggressively. And since Wednesday’s rally didn’t gain traction, either, extending higher should begin by gapping up. Not gapping up would not be bullish.
[There was no post-market Wrap Wednesday.]
Monitor overnight Globex trading in the chaRTroom here.
Pre-close View… Air pocket above?
REMINDER: I’m away from screens for the final hour. There will be NO post-close market Wrap, and the blog will be updated this evening. Thank you.
This afternoon’s 2097.00 bias-up signal was attacked to within 2 ticks before failing to trigger. Its reaction down attacked 2091.00 and consolidated ahead of the Beige Book release. It strengthened the case for hiking, triggering a dip back under 2092.00.
But not back to 2091.00, let alone lower.
So, the bias environment had expended a lot of selling pressure when its no-bias signal wasn’t going to gain any traction for its effort. The knee-jerk reaction down on news was only noise. The downside was done.
At least, it stepped aside for a 6-point surge to fresh post-open highs attacking 2098.00. And now the afternoon’s bias environment is lapsing, so yesterday’s lack of traction has become irrelevant. Trending above yesterday’s range is allowed.
An OPEC headline just triggered another knee-jerk reaction down which just touched 2094.25. Entering the final hour above 2098.00 could rally relentlessly through the close. Meanwhile, the intraday trend doesn’t signal it’s reversing down until breaking under 2093.00.
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 a little doesn’t yet prevent retesting Sunday night’s low down to 1.1055. But closing above 1.1205 would signal at least a substantial multi-session bounce underway.
Gold Aug Contract (GC, ETF: (GLD))
The ongoing series of lower lows and lower highs remained intact following Tuesday’s bounce. Dipping under Tuesday’s 1210.50 low makes likely at least a retest of Sunday night’s ~1202.00 lows.
Silver Jul Contract (SI, ETF: (SLV))
Ranging narrowly at Tuesday’s test of 16.00 appears to be forming an Island, although that pattern isn’t likely at this stage.
30-year Treasury Sep Contract (US, ETF: (TLT))
The stunning rejection of Tuesday’s probe under the 162-04 sell signal to rally back up to the original 163-05 buy signal needed a correction before extending higher. Dipping to Tuesday night’s dip to 162-25 support reacted up back into positive territory at Wednesday’s open and extended sharply higher intraday. It was retraced to its signal, but closing higher and confirming would target 166-14.
Crude Oil Jul Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
The capitulative reversal of the Complex Triangle’s false break became obvious by Wednesday’s gap down under the 49.00 sell signal. Extending down to 47.75 didn’t prevent bouncing back up to the sell signal. A second consecutive lower close Thursday would confirm the minimum objective in-play to probe under the Triangle’s 47.25 low.
Natural Gas Jul Contract (NG, ETF: (UNG, UNL))
Gapping up Wednesday and extending higher intraday need only close higher to confirm Tuesday’s break above 2.18 and 2.24 has finally sealed a bottom.