Posts by Rod David
The First Trade… Turnabout is fair-play.
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…
Thursday’s gap down to Wednesday afternoon’s low was on a mission. There were attraction below to neutralize. From “unfinished business below” at 2044.50 and its lower attraction to 2039.00, to retesting the 2035.00 lows that had defined the week-long range. Probing even lower into the final hour to 2026.00 finally found a relevant price accompanied by improving RSIs at a relevant time. Recovering into the close fulfilled a corrective bounce target at 2036.50. Sellers gained traction.
Overnight action’s new info…
Dipping to 2030.25 retraced 61.8% of Thursday’s late bounce, and bouncing retraced the dip. The bounce extended back into yesterday’s opening range up to 2049.00 before consolidating.
If, then…
Having gained traction for their effort, yesterday’s sellers should be rewarded by trending down through this morning’s bias environment. That can begin from gapping up, as the open is currently indicated. But gapping up above yesterday’s 2043.00 prior high would suggest that buying pressure is inverting the bearish setup to bullish. This possibility was raised by yesterday’s close having eked its way back above the trading range’s 2035.25 lower-end. A “session-long rally” setup is not possible, but marginalizing sellers for the day would make a bullish morning. Of course, turnabout is fair-play. In the same way that negating yesterday’s bearish setup may become bullish, now the overnight bullish setup would become bearish by not opening high enough.
First Trade…
Exiting the open at 9:45 above 2044.50 would be likely to trigger the 2040.75 bias-up signal at 10:15. Exiting the open above 2050.50 would be likely to renew the bias-up signal by recovering the 2046.00 bias-up target through 10:15. Exiting the open under 2039.25 would be unlikely to trigger the 2040.75 bias-up signal at 10:15.
Morning Bias
| FRI morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2048.25 | 2040.75 |
| …would target | 2053.25 | 2046.00 |
| Bias-down: under | 2037.25 | 2030.00 |
| …would target | 2032.25 | 2024.75 |
| 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)
Thursday’s final hour 10-point bounce from 2026.00 fulfilled its corrective bounce objective. Extending higher through the cash session close attacked the afternoon’s 2038.00 bias-down signal, which didn’t require being retraced.
2038.00 held as resistance. No prior high was recovered. Sellers gained traction into the bias environment’s exit and final hour’s entry. The trend remains down.
Thursday’s close was testing last Friday’s 2038.25 interim low as resistance. Overlapping it, not recovering it. But so long as 2040.75 isn’t recovered, the trend remains down.
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… Traction.
Sellers gain traction for tomorrow.
This afternoon’s bias environment was exited under its 2032.50 bias-down target. Usually, probing under its 2038.00 bias-down signal after 1:30 during a no-bias environment would require retracing to 2038.00 at some point. But not if also trending under the 2032.50 target by 2:30.
That doesn’t prevent a bounce back to 2038.00 anyway. And it doesn’t prevent a durable recovery. But neither is required.
Meanwhile, the bias environment was exited under the noon hour’s low, and the final hour hour was entered under the bias environment’s low (testing 2026.00). Sellers have gained traction for their efforts. Regardless of price action for the balance of the session, tomorrow morning is likely to probe fresh lows.
Being entrenched, sellers are exploiting the opportunity to refuel by allowing a bounce up to 2032.50. Back under 2029.50 would signal the decline has resumed already, next targeting 2021.00-2022.00.
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 Mar Contract (EC, ETF: (FXE, UUP))
Probing a fresh high Wednesday night had been retraced before Thursday’s open, which continued to be resisted by 1.1435 to maintain the topping pattern while awaiting a break under the 1.1345 sell signal.
Gold Apr Contract (GC, ETF: (GLD))
Surging overnight from Wednesday’s 1224.50 close retested last week’s overnight attack on “higher prior lows” up to 1245.00. Gapping up is still not a valid start to a durable rally, but this attempt my take multiple days and multiple legs before failing. Meanwhile, a dip to 1234.00 would likely recover to above 1255.00, so long as 1228.50 holds as support.
Silver May Contract (SI, ETF: (SLV))
Testing the 15.25 bounce limit Thursday has threatened the 14.70 minimum pullback objective, which otherwise remains in-play.
30-year Treasury Jun Contract (US, ETF: (TLT))
At least touching 165-00 “lower prior highs” Wednesday did not delay recovering Thursday, already probing Tuesday’s 166-15 prior highs up to at least 167-00. Gapping up from the corrective was an overly-optimistic start to resuming the rally, but a pullback to 165-12 can be avoided by holding 166-10.
Crude Oil May Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Wednesday’s night’s test of 38.25 which had been critical support on the way down should launch the next downleg to the 34.25 and 31.85 targets. Closing above 39.05-39.10 would start to signal that downside momentum had lapsed.
Natural Gas May Contract (NG, ETF: (UNG, UNL))
Gapping up Thursday back above 1.95 helped to confirm that Wednesday’s break under it was not strong-handed, and also confirmed that EIA was not being greeted from a position of weakness. Closing above 1.95 and higher would still signal a new upleg underway to probe above 2.08.