Posts by Rod David
Post-open Review… Marginalizing sellers.
No immediate drop means rally likely.
As we discussed during this weekend’s Saturday Review, selling pressure must be compartmentalized to prevent it gaining traction. And not immediately extending down this morning would default to be bullish.
Last night’s spike down to 2035.00 was never repeated post-open (not even overnight). And the flat 2043.50 open rallied immediately.
Fulfilling the setup has led to triggering the 2050.50 bias-up signal. A test of the 2056.00 bias-up target is in-play.
Fresh highs are testing 2054.00, which retraces 61.8% of Friday’s intraday range. There is room for noise above the bias-up target to 2058.50.
Sellers aren’t likely to regain control before this afternoon, if at all. Any downdraft will be considered temporary if the bias-up target hasn’t yet been met. Meanwhile, extending even higher this afternoon would signal the multi-week rally was being retraced.
Pre-market Tour (recording & summary)
Perhaps Sunday night’s spike down was in reaction to pro-Brexit weekend news. A quake in Tokyo hasn’t rattled the narrow range around unchanged. The quakes in AAPL (Buffet taking a $1b stake) and beaten-down Biotechs (PFE buying ANAC) haven’t had an effect, either. Or, their effects are tugging equally at each other to gain control.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Coiling.
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…
Friday morning’s choppiness had ranged between 2051.50-2063.50, literally 6 points either way around its flat 2057.00 open. Two probes into positive territory were each followed by probing negative territory. The second probe never recovered, sliding through the noon hour and bias environment. The 2046.00 overnight low was probed down to 2038.50, back into the prior Friday’s range, before firming to close at 2042.25-2043.50.
Overnight action’s new info…
Sunday night’s open spiked down to 2035.00 and immediately began firming. The steady rise had soon recovered positive territory, eventually probing it up to 2049.25. Gradually lower highs have been hovering for hours at or above Friday’s 2042.25-2043.50 close.
If, then…
Dipping into the prior Friday’s range — the multi-week decline’s lows — essentially requires resolving suddenly. Essentially. Almost any delay to resolving down would get a slight benefit of the doubt for resolving up, if only by default as the decline fails to attract new sponsorship. Actually, ONLY by default. Rallying would still need to trigger a signal, at least a bias-up. Meanwhile, probing lower can still be absorbed if not maintained through a relevant timing window. Last night’s momentary spike down is one example that I described during this weekend’s Saturday Review.
First Trade…
Oddly, there are no preliminary levels in the overnight pattern for anticipating the morning’s Bias signal.
Sunday night’s Globex link
Monitor overnight price action in the chaRTroom when the Globex session opens at 6pm ET. In case you’ve missed it, here’s the link to Saturday Review for details of what hints it might give.
Saturday Review’s recording (for 5/14/16) … Just visiting?
Returning back to last Friday’s lows this Friday may have been one last tag-up at third base before heading to home. i.e. Retracing, rejecting and reversing Friday’s dip without delay would very likely launch the next rally leg to fresh highs. Well, some delay is possible while maintaining a path to recovery, but probably not without compartmentalizing any further dip…
This weekend’s Saturday Review discusses the above situation, and also describes their consequences. We also spent some time interpreting the recent relative performances among S&Ps, the Dow and NDX.
The following stock requests were reviewed in this order:
AAPL, CRUS, NXPI, GDX, ERII, ADI, NKE, LLL, AMD, SIVB, SFLY, FB
05/14/2016 09:30:36 smm: check
05/14/2016 09:31:31 Mark Glezer: gm
05/14/2016 09:55:49 Mk: gotta leave early so CRUS NXPI ADI NKE LLL AMD SIVB SFLY
05/14/2016 09:56:16 Mk: and FB
05/14/2016 09:58:25 Bill G: op ex
05/14/2016 09:59:24 smm: Broader market: What is your interpretation of the Dow being weaker in the context of where the market is currently?
05/14/2016 10:00:02 smm: (still within the orbit of all time highs)
05/14/2016 10:06:02 smm: – Throughout 2015 we were looking for Dow relative strength (vs NQ strength that had been seen for a long time) to portend future market declines.
05/14/2016 10:09:23 smm: We were watching for the sign of Dow relative strength to confirm expected market weakness
05/14/2016 10:09:40 smm: right
05/14/2016 10:09:58 smm: Dow relative strength would be a confirming sign
05/14/2016 10:10:45 smm: – – anyway, your comments so far on this point are helpful enough. Dont want to get stuck here.
05/14/2016 10:11:11 smm: The NQs were strong all throughout 2015
05/14/2016 10:11:17 smm: (and prior)
05/14/2016 10:11:32 Bill G: With some bullish div in nq, would a rally in es be greater in nq’s
05/14/2016 10:11:47 smm: One sign of the top rolling over was Dow relative strength
05/14/2016 10:11:59 smm: and NQ weakness
05/14/2016 10:12:50 smm: Yeah, thats where we started to see the change
05/14/2016 10:14:49 smm: Was just wondering how significant Dow relative weakness is. Using the earlier logic, one might conclude that there is not a search for cover in the Dow stocks
05/14/2016 10:16:11 smm: ok thx
05/14/2016 10:17:14 Bill G: an nq rally may be largly a bounce
05/14/2016 10:17:20 Bill G: in aapl