Posts by Rod David
Pre-market Tour (recording & summary)
Overnight action had dropped from 2075.75 before Europe’s opens, down to 2069.50. This morning’s open is being greeted back at that last drop’s origin. Aggressively extending the recovery post-open isn’t always necessary to rally, but would be very appropriate in the context of rallying this morning. So, any delay beyond a blip-down or only firming would make a recovery suspect.
Details and other markets coverage are discussed in the pre-market Tour recording here.
The First Trade… Holding back.
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…
The rally’s next higher objective at 2080.50 was met to within 2-3 ticks. Each of Tuesday’s timing windows probed a fresh session high on the way to a 25-point gain — 31 points when including Tuesday night’s initial drop to 2048.00. The rally gained traction by exiting the bias environment at 2:30 above the noon hour’s high, and then also trending to fresh highs through the 3:10-3:20 window.
Overnight action’s new info…
Dipping immediately at last night’s Globex open has extended down to 2069.50. Its reaction is testing 2075.00 as resistance, which is essentially yesterday’s noon hour high, and still indicating a gap down.
If, then…
Gaining traction yesterday suggests the rally will resume this morning, even if the open were to gap down — so long as the gap isn’t under yesterday afternoon’s 2072.00 bias environment low, which could instead invert the bullish signal to bearish. Having tested last Monday’s highs, trending up this morning above yesterday’s highs would all but confirm the ongoing decline has ended. But the most bearish scenario should be limited to a test of 2059.50. And there is no bearish scenario until this afternoon if the open has resumed rallying.
First Trade…
Exiting the open at 9:45 above 2077.75 would be unlikely to trigger the 2073.00 bias-down signal at 10:15. Exiting the open under 2071.25 would be likely to trigger bias-down.
Morning Bias
| WED morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2086.25 | 2080.50 |
| …would target | 2093.00 | 2087.50 |
| Bias-down: under | 2078.50 | 2073.00 |
| …would target | 2073.25 | 2067.50 |
| Signal status: LATE NO-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.
Post-market Wrap (recording & summary)
This will sound incorrect: Tuesday probably was not a “session-long rally” setup, because each timing window probed a fresh high. A session-long rally setup usually has one timing window not probe higher. Each of Tuesday’s timing windows probed a fresh high.
So, what?
Well, had Tuesday been a session-long rally, then we could rely on the rally extending higher Wednesday morning. That’s not assured. It’s likely anyway — the rally gained traction for its effort (by exiting the bias environment above the noon hour’s high, and then trending to fresh highs through 3:10-3:20) so Wednesday morning is likely to trend up. But that could begin from a gap down.
And a gap down can’t be discounted, for at least three reasons. The 2080.50 objective was met to within 3 ticks, while RSIs diverged negatively. Confirming Tuesday’s rally by extending higher Wednesday would put into play new highs above 2105.00. Early weakness has room down to 2072.00 without yet reversing the trend back down.
Details and other markets coverage are discussed in the post-market Wrap recording here.
Monitor overnight Globex trading in the chaRTroom here.
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 Jun Contract (EC, ETF: (FXE, UUP))
Tuesday’s fourth day of a 4-day setup, didn’t reject the ongoing decline, suggesting that Thursday’s sell signal remains intact and targeting the low’s gap outstanding at 1.1245.
Gold Jun Contract (GC, ETF: (GLD))
Probing fresh lows Tuesday didn’t extended down much, but the narrow ranging shouldn’t be confused with stability or even a rejection of the decline next targeting 1241.00.
Silver Jul Contract (SI, ETF: (SLV))
Fresh lows were avoided Tuesday, but Monday’s decline was not at all rejected, so the decline targeting 16.75 remains in-play.
30-year Treasury Jun Contract (US, ETF: (TLT))
Friday’s 165-27 opening gap up was neutralized at Tuesday’s high. Its test didn’t reverse momentum down, but fresh highs should not be further delayed to maintain this leg’s potential to 166-30 and 167-26.
Crude Oil Jun Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
A fresh low under 43.25 had become likely, if not a requirement, and it was produced Monday night down to 43.03. Tuesday’s intraday rally tested 44.50 resistance, in proximity to trigger the 44.75 buy signal, too.
Natural Gas Jun Contract (NG, ETF: (UNG, UNL))
Gapping up through 2.14 Tuesday only tested the 2.16 prior high, and still must close above it to confirm a new upleg is underway.