Posts by Rod David
The First Trade… Back-and-fill.
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…
Gapping up sharply Wednesday to 2058.00 was extended higher to 2064.50 during the morning’s bias environment. Reversing to fresh session lows attacked 2051.00 during the afternoon’s bias environment. A lot of selling pressure was expended without it triggering bias-down or leaving positive territory. The final hour’s bounce to 2060.50 released a lot of pent-up buying pressure, and the close drifted back down.
Overnight action’s new info…
Wednesday’s closing drift extended through the overnight Globex open, eventually probing under Wednesday’s low down to 2050.25. A temporary bounce to 2054.50 resolved down to fresh lows at 2047.25, and its reaction up has returned to 2054.50.
If, then…
Having probed under yesterday’s lows a couple of times overnight, exiting the open within yesterday’s range could establish a floor for the day. Attacking yesterday’s highs would be likely, if not also probing fresh highs intraday. Resuming the rally through yesterday’s highs would not. Otherwise, backing-and-filling ahead of tomorrow’s Employment Situation report remains likelier, probing deeper under the overnight lows.
First Trade…
Exiting the open at 9:45 above 2054.25 would be unlikely to trigger the 2051.00 bias-down signal at 10:15. Exiting the open under 2049.50 would be likely to trigger bias-down.
Morning Bias
| THU morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2070.75 | 2061.50 |
| …would target | 2076.50 | 2067..25 |
| Bias-down: under | 2060.25 | 2051.00 |
| …would target | 2053.75 | 2044.50 |
| Signal status: NO-BIAS | 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)
But for a few ticks, Wednesday’s 2058.00 open was still being overlapped at Wednesday’s close. Exceeding the morning’s 2056.00 bias-up target had renewed the bias-up signal, but its 2061.25 renewed bias-up target had been met already and held. That setup had warned of that morning trending attempts would fail.
Not that trending wouldn’t be attempted, but that it would fail. And it was attempted and it did fail. A lot of selling pressure was expended intraday without triggering a bias-down and without leaving positive territory. That already produced an afternoon bounce, and didn’t gain traction for the effort, so extending higher Thursday largely relies on already extending higher overnight.
There having been no net post-open improvement Wednesday, and Thursday being the day before March’s Employment Situation report, backing-and-filling wouldn’t be surprising. Already trending higher Thursday would risk discounting bad payrolls Friday, which could only fulfill expectations but not exceed them.
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))
Extending higher Wednesday not only fulfilled the 1.1335 attraction, but also probed fresh highs up to 1.1391. Having begun the high’s retest from only a relatively shallow pullback, a topping pattern may now form and trigger back under 1.1319.
Gold Apr Contract (GC, ETF: (GLD))
Despite probing higher after Tuesday’s close, Wednesday’s open gapped down and eventually fell further to 1223.00 support, whose recovery through the close maintains potential for resuming the recovery. Closing back under 1216.50 would instead launch a new downleg.
Silver May Contract (SI, ETF: (SLV))
Closing above Monday’s 15.38 high Wednesday, would have confirmed Tuesday’s recovery of 15.25, but initially probing above 15.40 was retraced back down to and through 15.25. Closing above 15.38 would still target 15.88.
30-year Treasury Jun Contract (US, ETF: (TLT))
Tuesday’s close above both 163-16 and Friday’s 164-10 prior high failed to confirm with a higher close Wednesday. The intraday reaction down to 162-23 recovered 163-16 whose recovery through the close would avoid greeting Friday’s Employment Situation report from a position of weakness.
Crude Oil May Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Gapping up above 39.05 Wednesday was appropriate for rejecting Tuesday’s non-trending gap down that only hovered at prior lows. Initially extending higher also tested the 39.55 buy signal, but its reaction down filled the gap back down to Tuesday’s 38.35 close.
Natural Gas Apr Contract (NG, ETF: (UNG, UNL))
Still firming Wednesday not only confirmed the recovery above 1.85 targeting 1.99, but also greets Thursday’s EIA report from a position of strength likely either to extend sharply higher, or else first absorb an initially negative knee-jerk reaction down.
Mid-day Update… Still holding out, and a little up.
Well off the high, but still in positive territory.
Each probe above 2061.25 this morning was only brief, once touching 2064.50. That one was too much, and it reacted down to fresh post-open lows attacking 2054.25. Extending down during the noon hour is now attacking 2052.00.
Two hours of relentless selling, and 12 points off the high. Seems bearish.
But that’s still 1 point above the afternoon’s bias-down signal, and 5 points in positive territory.
Bias-down didn’t trigger. Maybe it will be probed anyway, which would be “no-bias trending” that requires being retraced. Waiting an hour before probing lower would target 2039.25. Otherwise, back above 2056.25 would start putting into play fresh session highs.