Posts by Rod David
The First Trade… Not a beat skipped.
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 bullish WedEX dictated that Monday’s 10-point gap down to 2067.00 would recover. It recovered, and then some, eventually extending 15 points into positive territory at 2088.75 and 7 points above last week’s 2081.75 high. Buyers gained no traction for their efforts.
Overnight action’s new info…
A momentary dip to 2084.75 at the Globex open was recovered to fresh highs testing 2090.00. Its pullback was already resolving up before Europe’s opens, when the rally steepened and eventually extended up to 2098.50. A dip just attacked 2095.00.
If, then…
Having failed to gain traction Monday, gapping up Tuesday is the rally’s only credible path to extending higher without interruption. Not quickly extending the gap up would be vulnerable to reversing back down for the morning, but not necessarily back into negative territory… The rally’s last piece of “unfinished business above” is to retest last year’s last relative highs, now within view at 2110.00. Noise below it begins at 2097.00, which is being attacked overnight. Gapping up to it must extend through it without delay to avoid a corrective dip.
First Trade…
Exiting the open at 9:45 above 2097.00 would be likely also to exceed the 2093.75 bias-up target at 10:15 to renew the bias-up signal. Exiting the open under 2090.50 would be unlikely to exceed the bias-up target through 10:15.
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2094.50 | 2088.25 |
| …would target | 2100.00 | 2093.75 |
| Bias-down: under | 2088.75 | 2082.50 |
| …would target | 2083.25 | 2077.00 |
| Signal status: BIAS-UP, BIAS-UP 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)
The sum of Monday’s rally was more substantial than its parts, and it contained some very substantial parts:
Reacting up from the overnight low’s test of 2059.50, reacting up quickly from the open’s test of 2067.50, entering the morning’s bias environment back in positive territory and soon following that with a probe above last week’s 2081.75 high… And that was just by mid-morning. The afternoon attacked 2089.00.
But upside momentum may not escape near-term jeopardy — although buyers gained no traction for their efforts, that didn’t prevent eking out fresh highs into the close. Extending the rally higher without delay requires gapping up, or else a pullback to “lower prior highs” at 2076.00-2077.00 would be likely.
Any deeper of a pullback would make near-term recovery difficult, especially if not launched by gapping down. The most bearish scenario would try probing higher Tuesday morning, anyway, without gapping up from new sponsorship, and without buyers already gaining traction.
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… The best is yet to come?
Probing fresh highs at an appropriate time.
Overbought RSIs at the noon hour’s 2087.0 high didn’t require a retest, but they made it difficult to reverse down. Now they’ve been neutralized by fresh session highs by more than 1 point higher.
The no-bias environment is lapsing. Exiting it above all prior timing window highs on a trending session can be even more difficult to reverse down. That doesn’t prevent dips, but it makes buying dips attractive.
Meanwhile, this morning’s upleg can be duplicated on the next run, whether or not today. But that’s the second likeliest scenario compared to simply ranging flat-to-higher.
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 Mar Contract (EC, ETF: (FXE, UUP))
Despite last week’s confirmed break of the 1.1345 sell signal requiring an eventual third lower close, Monday firmed back up to the sell signal. Still, nothing prevents probing higher in the interim, or requires immediately fulfilling the objective.
Gold Apr Contract (GC, ETF: (GLD))
Friday’s overly-optimistic gap up from only attacking 1224.00 to 1234.50 had reacted down, and the overly optimistic reaction down had recovered to fresh highs that ended back at 1234.50. Similarly, gapping up Monday to test 1241.00 resistance also reacted down to 1234.50. A test of 1224.00 remains in-play, and likely to be probed by several dollars.
Silver May Contract (SI, ETF: (SLV))
Monday’s firm morning held the 15.25 pullback limit that keeps in-play the higher objective up to 15.85.
30-year Treasury Jun Contract (US, ETF: (TLT))
Pulling back from Friday’s test of 166-16 resistance down to 165-20 could have launched a new upleg Monday, but probing it under 165-12 essentially targets a more thorough test the 164-12/164-20 pullback limit that had been tested to within 1 tick last week.
Crude Oil May Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Gapping down sharply Sunday night and extending down to 37.60 didn’t prevent recovering to 38.50 by Monday’s open, and or entirely back to Friday’s 40.40 close that had triggered the 40.80 sell signal. A second consecutive lower close could still confirm the breakout, but more backing-and -filling wouldn’t negate the new attraction below at Monday’s gap down.
Natural Gas May Contract (NG, ETF: (UNG, UNL))
Monday’s firming didn’t recover 1.95 or recover from probing a fresh low, either of which would signal the pullback had ended.