Posts by Rod David
The First Trade & Pre-open Tour Recording… Detour, or early ending?
Proper context can start the day with a solid win and make all the difference.
DAILY SCHEDULE
First, watch the pre-open Tour recording HERE <<==
Then, meet in the chaRTroom here by 9:15 ET for updates and Q&A
Through the prior close…
Closing above 2548.00-2555.00 Tuesday had put into play the next higher objective at 2606.00. And Tuesday’s session-long rally setup had suggested that Wednesday morning would probe higher. So, Wednesday’s 2583.00 gap up extended higher to test 2590.00. That didn’t prevent reacting down to headlines similar to Tuesday morning’s 34-point drop, but. by a relatively shallower 21 points to test the morning’s 2569.25 bias-down signal’s support. The drop was recovered to fresh highs through the noon hour up to 2595.50. The afternoon’s FOMC Minutes reaction triggered a surge attacking 2597.00, before ranging choppily sideways back down to 2580.00. Unfinished business was left outstanding by oversold RSIs at the morning’s 2569.00 low requiring a retest, also similar to oversold RSIs at Tuesday’s 2547.25 low.
Overnight action’s new info…
The last dip to 2580.00 by Wednesday’s late choppy range was extended through the Globex open. Quickly sliding to 2565.00 neutralized the intraday low’s required retest. Its reaction up to 2574.50 was eventually resolved down through Europe’s opens to 2560.50. Bouncing back up to 2572.00 is now trying to hold above earlier 2565.00 low.
If, then… (notes to accompany the Tour recording)
Is the rally rolling over already? The recent string over several sessions of shallower and briefer pullbacks had suggested that optimism was expanding, and that a capitulative surge was nearing. Two consecutive closes above the 2548.00-2555.00 range had confirmed the rally’s next higher objective at 2606.00 is in-play. A little pullback was possible for having come so close to 2606.00 Wednesday. But last night’s drop is not a little pullback. It is threatening to open under the entirety of yesterday’s range. Retesting the 2548.00-2555.00 range at this stage of the pattern would only start chipping away at its support. Opening back above yesterday’s lows to form an Isolation setup, and preferably all the way back up into positive territory, is the optimal bullish path — if not the only one still available today.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 under 2576.00 would be likely to trigger the 2579.00 bias-down signal at 10:15. Exiting the open under 2566.00 would be likely to exceed the 2571.00 bias-down target at 10:15 to renew the bias-down signal.
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2589.75 | 2590.75 |
| …would target | 2597.00 | 2598.00 |
| Bias-down: under | 2578.00 | 2579.00 |
| …would target | 2570.00 | 2571.00 |
| Signal status: BIAS-DOWN, BIAS-DOWN TARGET MET | . | |
| BIAS VIDEOS… INTRO // EXAMPLE | ||
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.
Market Wrap (recording & summary)
Closing above 2548.00-2555.00 Tuesday had put into play the next higher objective at 2606.00. Tuesday’s session-long rally setup had suggested that Wednesday morning would probe higher. 
Already having probed higher overnight, a couple of setups could have reversed the morning down, but they failed. So, the open’s gap up to 2583.00 extended higher.
Until it didn’t.
The open got up to to test 2590.00 where rumors, tweets and headlines triggered a reaction down similar to Tuesday morning. But Wednesday’s was relatively shallower, 21 points to test the 2569.25 bias-down signal’s support.
Its reaction resumed the rally to fresh highs through the noon hour up to 2595.50. The FOMC Minutes reaction triggered a surge attacking 2597.00. And the balance of the session ranged choppily sideways back down to 2580.00.
More unfinished business was left outstanding by oversold RSIs at the morning’s 2569.00 low. Add that to Tuesday’s tab from its oversold RSIs at 2547.25. Eventual retests of both are required. Which probably have to wait for the 2606.00 objective to be met (with room up to 2626.00) as the current string of shallower and briefer pullbacks suggest that the bounce must end before downside objectives can become attractive.
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 Mar Contract (EC, ETF: (FXE, UUP))
Tuesday’s pullback holding 1.1485 and 1.1500 needed confirmation from immediately resuming the rally, which Wednesday’s rally provided, extending sharply higher to 1.1625, the highest level in months. Pullbacks should now hold 1.1580 to maintain the upside momentum.
Gold Feb Contract (GC, ETF: (GLD))
Dipping deeper overnight was reversed back up Wednesday to attack recent highs up to 1294.50. Extending the rally to fresh highs should not be delayed much longer as the 1319.50 target remains intact.
Silver Mar Contract (SI, ETF: (SLV))
Rallying Wednesday morning attacked prior highs to help confirm that Tuesday’s shallow dip had gained no traction for extending down.
30-year Treasury Mar Contract (US, ETF: (TLT))
Extending the decline into Wednesday’s open needed to hold 145-08 for even suggesting that a pullback may have completed. It was attacked to within 3 ticks, and now back above 146-04 would launch at least a corrective bounce. Closing first under 145-08 would signal a new downleg was already underway.
Crude Oil Feb Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Extending the rally overnight to gap up Wednesday provided the immediate confirmation needed for Tuesday’s rally attacking 50.00. Which shouldn’t have been difficult since EIA was being greeted from a position of strength. Trending sharply higher intraday to attack 52.60 now allows upside momentum to remain intact above 51.00, with room for noise down to 50.15.
Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
Wednesday’s flat ranging doesn’t greet Thursday’s EIA report from either a position of strength or a position of weakness, still needing to recover 3.15 to begin signaling that a bottom is forming.
Mid-day Update… Closing in.
Nearing the next higher target.
This morning yet again dipped aggressively. And yet again, the dip was retraced entirely back up to a new relative high.
The first half-hour’s test of 2590.00 was retraced just in enough and just in time to avoid renewing bias-up by 
exceeding the 2586.50 bias-up target. Its eventual collapse tested this morning’s 2569.25 bias-down signal. Support there rejected the dip, which was retraced entirely to fresh highs at 2595.50.
This afternoon’s 2592.25 bias-up signal was still being overlapped at 1:20 and 1:30 to trigger noN-bias. The bias signal need not hold, and its target isn’t necessarily in-play. But the upside has slowed ahead of this afternoon’s FOMC Minutes.
Meanwhile, after several intraday dips and their recoveries during the past several sessions,
each resolving in higher highs, the market seems to be accepting that the near-term trend remains up. Pullbacks are getting shallower and their retracements are coming earlier.
Buyers no longer wait to get long for the next higher high. Not that another dip can’t develop, but its likelihood gets exponentially less with each dip’s recovery to a fresh high. None of which prevents a negative knee-jerk reaction down on FOMC Minutes due shortly.