Posts by Rod David
Post-open Review… Tug o’War.
Two competing influences battle over the open.
Maintaining the open’s gap up above yesterday afternoon’s 2567.50 high formed several bullish setups.
None of which prevented immediately reversing down to touch yesterday’s high. And extending down beyond the first hour to probe the entire 2548.00-2555.00 range down to 2547.50.
So much for the session-long rally setup. It was formed by gapping up above yesterday’s close, after having trended down into yesterday’s close. Rejecting it by 9:45 could have become as bearish as the setup would have been bearish. Instead, the late reversal only invalidates the otherwise bullish setup. It can’t be reinstated, but another bullish setup could take develop separately.
Meanwhile, traction sellers gained by yesterday afternoon’s sellers had created a position of weakness. Its influence only prevents a rally from gaining traction. Closing back above the upper-end of the 2548.00-2555.00 range could still extend the rally. But closing under the 2548.00-2555.00 range’s low would reverse momentum down.
The First Trade & Pre-open Tour Recording… Still probing higher.
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…
Monday’s 2534.00 open was essentially flat with Friday’s 2531.00-2533.00 close, and with Sunday night’s earlier Globex low. In the interim was a probe above Friday’s high up to 2552.00, and the reversal back down from it. Continuing to reverse down through the open would form a bearish Globex-flip setup. But the open held, helped by Friday’s bullish session-long rally setup still in-play. So, the Globex-flip became as bullish as it would have been bearish. Friday morning’s rally resumed, trending up through the noon hour’s exit. That was still 2 points short of the afternoon’s 2569.25 bias-up target, which became “unfinished business” when the afternoon’s dip held a test its 2550.50 bias-down signal. Meanwhile, the afternoon dip did gain traction for its efforts, and the rally’s next higher target at 2548.00-2555.00 held as resistance through the close.
Overnight action’s new info…
Gradually recovering into midnight tested 2563.00 before defensively posturing ahead of Europe’s opens. The pullback to 2554.00 held and a relief rally surged to eventually probe yesterday’s high up to 2569.00, neutralizing Monday’s unfinished business. Its reaction down to 2560.00 has recovered to higher highs at 2572.00.
If, then… (notes to accompany the Tour recording)
Neutralizing yesterday’s unfinished business above now relies on post-open patterns to extend the rally. That will be challenging, since yesterday afternoon’s dip created a position of weakness, which suggests the attempt to resume the rally will fail. Closing back within the 2548.00-2555.00 range had avoided putting into play the next higher target at 2606.00. Closing above the 2548.00-2555.00 range today would still put the higher target into play anyway. And maintaining a gap up above yesterday’s 2567.50 high — which is also yesterday’s bias environment high, after having trended down into the close — could form a session-long rally. Otherwise, closing back under 2548.00-2555.00 would help to confirm upside momentum is done.
First Trade…
[Click here to view the Bias parameters] Exiting the open at 9:45 above 2571.00 would be likely to exceed the 2568.50 bias-up target through 10:15 to renew the bias-up signal. Exiting the open above 2566.00 would be likely to trigger the 2560.25 bias-up signal at 10:15.
Morning Bias
| TUE morning signal (triggered at 10:15 ET) | SPX | ES |
| Bias-up: above | 2559.75 | 2560.25 |
| …would target | 2568.00 | 2568.50 |
| Bias-down: under | 2544.75 | 2545.25 |
| …would target | 2537.75 | 2538.25 |
| Signal status: LATE BIAS-UP, BIAS-UP 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)
Monday’s 2534.00 open was testing Friday’s 2531.00-2533.00 close. So, essentially flat. More important was the open’s test of the 2532.00 earlier Globex low. Not holding above it, after having probed above Friday’s high, would form a Globex-flip setup and reverse down.
The open’s Globex-flip setup was challenged by Friday’s session-long rally setup, which already made Monday morning likely to probe higher. The reversal attempt did fail, becoming as bullish as it would have been bearish. The rally resumed and trended up through the noon hour’s exit.
It wouldn’t be especially interesting that the overnight sellers formed a reversal setup, except that the afternoon’s sellers did, too. Attacking the afternoon’s 2569.25 bias-up target to within 2 points was reversed down into the final hour. Still overlapping the afternoon’s 2550.50 bias-down signal — instead of already breaking under it — keeps alive the 2569.25 target. But exiting the bias environment under the noon hour’s low, and entering the final hour lower, means sellers gained traction and created a position of weakness.
Closing back within the 2548.00-2555.00 range avoided putting into play the next higher target at 2606.00. That’s another effort by sellers, although they failed to close under 2548.00. The afternoon’s position of weakness can still launch a test of the 2569.25 target, but the target’s test is now likelier to hold, assuming it is tested.
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))
Gapping up Sunday above 1.1485 resistance and the 1.1500 buy signal extended higher Monday to its highest levels in 2 weeks at 1.1550. A second consecutive higher close Tuesday would confirm.
Gold Feb Contract (GC, ETF: (GLD))
Friday’s dip back under 1284.00 had recovered through the close, which Sunday night exploited by trending back up. But Friday’s pre-open probe above 1300.00 was never retested, despite gapping up Monday to pierce Thursday’s 1295.50 high. Back under 1283.00 would signal a deeper pullback underway, but the 1319.50 target otherwise remains intact.
Silver Mar Contract (SI, ETF: (SLV))
Friday’s pre-open test of 15.95 had been retraced before Friday’s open, which held support intraday. An attempt to resume the rally Monday stopped short of Friday’s pre-open high before settling back into Friday’s range, still not reversing momentum down.
30-year Treasury Mar Contract (US, ETF: (TLT))
Closing under the 147-16 pullback limit needed to recover it Monday to resume the rally’s momentum. Its resistance held Sunday night’s bounce, which reacted back down Monday to test Friday’s 146-18 lows. Tuesday may be the last opportunity to resume the rally.
Crude Oil Feb Contract (CL, ETF: (USO, USL) (UWTI-long, DWTI-short))
Monday’s open was greeted probing further above the 47.00 buy signal, still needing a second consecutive higher close to confirm a rally can get underway despite having stopped 20 cents short of even touching the 43.35-44.15 pullback limit. Ending the day back under Friday’s highs did not confirm, but any initial strength Tuesday would still be credible for extending higher intraday.
Natural Gas Feb Contract (NG, ETF: (UNG, UNL))
Gapping down Sunday night didn’t extend down to fresh lows, which could be a last round of selling before at least trying to recover 4.15 where a bottom could begin forming.